Morningstar Rating

Stock Research and Analysis

by David Meats

Bulls Say

Ongoing asset sales will streamline the company, with the “shrink to grow” model eventually boosting profitability and cash-flow generation.
Talisman’s international assets leverage the company to the Brent crude benchmark, shielding it from potential weakness in North American pricing.
Potential JVs in the Duvernay/Kurdistan will provide a near-term catalyst, while the longer-term development of these assets will boost reserves and add new sources of growth. Read more 

Bears Say

The UK North Sea is a drag on profitability, with a lofty $500 million spending commitment and declining field productivity. Yet divestiture remains problematic due to the current partner’s right of refusal.
The company cannot fund spending with cash flows and is relying on asset sales to fund its capital program, which is not sustainable.
The company remains heavily levered to natural gas; a prolonged fall in prices would strongly weigh on earnings and cash flows. Read more 

Management

Talisman’s new CEO Hal Kvisle came out of retirement to take on the challenge of righting the ship after a turbulent period, unlocking value in the portfolio through divestments and focusing on liquids growth while living within cash flows. We applaud   Read more 

Profile

Talisman Energy, based in Calgary, Alberta, explores and develops oil and gas resources around the globe, including unconventional gas in North America and offshore oil   Read more 

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