Talisman Energy Inc.
Talisman Energy Inc. reported its operating and financial results for 2007.
-- Cash flow(1) for the year was $4.3 billion, down 9% from a year ago,
with the drop largely due to asset sales. Cash flow from continuing
operations was unchanged at $4.2 billion.
-- Net income was a record $2.1 billion, up 4% from a year earlier, with a
significant contribution from gains on asset sales.
-- Production averaged 452,000 boe/d, down 7% from 2006. Talisman sold
non-core assets producing approximately 28,000 boe/d in 2007, with a
total of 57,000 boe/d sold over two years.
-- The Company repurchased 46 million shares at a cost of $951 million.
-- Net debt(1) at year end was $4.3 billion, down from $4.5 billion a year
earlier.
-- Talisman replaced 102% of production with proved reserves (excluding net
acquisitions and dispositions).
-- At year end, the Company completed the sale of its Brae assets in the
North Sea and acquired a small interest in the Tangguh LNG project in
Indonesia.
"2007 was a year of contrasts for Talisman," said John Manzoni, President & CEO.
"We are very encouraged by two exploration discoveries late in the year, higher
oil prices contributed to very high North Sea netbacks and we again replaced
more than 100% of proved reserves. On the other hand, we suffered a number of
project delays, mainly in the North Sea, natural gas prices were lower and the
Canadian dollar strength offset most of the oil price increase for us. As a
result of the project delays, production was lower than our expectations at the
start of the year. However, we are taking steps to strengthen our project
management, which I am confident will improve delivery going forward.
"Our headline numbers were affected by asset sales last year. However, net of
sales, cash flow from continuing operations was unchanged and production was
down by less than 2% despite project delays. I am encouraged by our exploration
success in 2007, which resulted in discoveries in the North Sea and Vietnam. We
will follow up these discoveries with appraisal and development activity this
year. In addition, our new Outer Foothills play in North America is working well
and we had a number of notable drilling successes. We also continued our long
track record of replacing over 100% of production with proved reserves,
excluding net acquisitions and dispositions.
"We expect to deliver 3-8% organic production growth from our streamlined asset
base this year and are confident we can deliver 5-10% annual growth through the
medium term. Looking to the longer term, we have initiated a review of our
entire portfolio to determine investment opportunities for growth in 2011 and
beyond. I continue to be encouraged by the early results of this work, which is
showing that our diverse portfolio offers many options to secure the long-term
future of the Company."
Financial Results
On March 7, 2008, Talisman plans to file with Canadian and US securities
authorities, its audited Financial Statements for the year ended December 31,
2007 and related Management's Discussion and Analysis, as well as its Annual
Information Form and Annual Report on Form 40-F.
Three Months Ended 12 Months Ended
December 31 December 31
====================-==================
2007 2006 2007 2006
---------------------------------------
Cash flow ($ million) 1,013 1,130 4,327 4,748
---------------------------------------
Cash flow per share(2) 0.99 1.05 4.19 4.35
---------------------------------------
Net income ($ million) 656 598 2,078 2,005
---------------------------------------
Net income per share 0.64 0.55 2.01 1.84
---------------------------------------
Earnings from Continuing Operations(2 )($ million) 137 322 978 1,501
---------------------------------------
Earnings from Continuing Operations (per share)( 2) 0.13 0.30 0.95 1.37
---------------------------------------
Average shares outstanding (million) 1,019 1,078 1,032 1,092
---------------------------------------
Cash flow for 2007 was $4.3 billion, down 9% from a year earlier. This was
predominantly due to lower volumes (down 7%) and netbacks (down 1%). However,
cash flow from continuing operations was unchanged at $4.2 billion. Cash flow
for the fourth quarter was $1,013 million, compared to $1,130 million a year
earlier, as lower volumes and higher cash taxes offset higher netbacks.
Net income was a record $2.1 billion, reflecting an $884 million after-tax gain
on asset sales and lower deferred taxes. Fourth quarter earnings were also up
significantly, reflecting Canadian tax rate reductions. Earnings from continuing
operations were down due to higher DD&A and dry hole costs. DD&A charges
increased $390 million, with $174 million of this in the UK, reflecting recent
acquisitions and new field developments.
Dry hole costs were up in 2007, totalling $684 million. Talisman has taken a
cautious view of previous exploration costs in Alaska. However, we are
continuing the exploration program and currently shooting the planned seismic
program. These increased dry hole costs also reflect higher spending levels in
the Alberta Foothills where individual wells are expensive to drill, although in
general, the 2007 exploration program was very successful in the Foothills, with
a number of very good wells and reserve replacement well over 100%.
The Company repurchased 46 million shares in 2007 at a cost of $951 million. At
year end, Talisman had 1,019 million shares outstanding, down 4% from a year
earlier.
Year-end long-term debt increased to $4,862 million. However, the Company had
$521 million in net cash on hand, including proceeds from the Brae sale, which
were received close to year end. On a net basis, debt was $4,341 million,
compared to $4,496 million a year earlier.
Talisman spent $4.4 billion on exploration and development in 2007, down
slightly from the previous year. However, spending in North America was reduced
23%, largely reflecting low natural gas prices. Spending in Norway increased 85%
to $613 million with ongoing project developments and increased drilling
expenditures. The Company increased capital spending in the UK by 5%, to $1.3
billion, completing the Tweedsmuir Phase 1, Enoch, Blane, Wood and Duart Phase 1
developments. Spending in Southeast Asia increased 55% with Northern Fields
development and exploration drilling in Vietnam.
Production
Three Months Ended 12 Months Ended
December 31 December 31
=====================-==================
2007 2006 2007 2006
----------------------------------------
Oil and liquids (bbls/d) 235,290 258,508 240,714 261,634
----------------------------------------
Natural gas (mmcf/d) 1,262 1,364 1,265 1,342
----------------------------------------
Total mboe/d 446 486 452 485
----------------------------------------
Continuing operations (mboe/d) 429 441 424 431
----------------------------------------
Production per share (boe) 0.160 0.165 0.160 0.162
----------------------------------------
Production for the year averaged 452,000 boe/d, 7% below 2006, largely due to
non-core asset sales. Production from continuing operations (excluding the
effect of asset sales) averaged 424,000 boe/d, down 2% from 2006. Relative to
the third quarter, production from continuing operations increased 3% to 429,000
boe/d as new projects came onstream in the North Sea and turnarounds for
maintenance were completed.
Netbacks
$/boe
Three Months Ended 12 Months Ended
December 31 December 31
=====================-===================
2007 2006 2007 2006
-----------------------------------------
Sales 64.60 53.07 59.57 57.45
-----------------------------------------
Hedging gain 0.08 0.52 0.63 0.37
-----------------------------------------
Royalty 11.41 7.99 10.19 9.58
-----------------------------------------
Transportation 1.26 1.27 1.37 1.28
-----------------------------------------
Opex 12.36 10.39 12.14 9.98
-----------------------------------------
Netback 39.65 33.94 36.50 36.98
-----------------------------------------
Oil & liquids netback ($/bbl) 51.57 39.20 44.68 43.46
-----------------------------------------
Natural gas netback ($/mcf) 4.38 4.67 4.52 4.92
-----------------------------------------
Netbacks were down 1% in 2007. The impact of higher WTI oil prices (up 9% to
US$72.31/bbl) were offset by the 6% rise in the Canadian dollar versus the US
dollar, a 6% drop in AECO natural gas prices and increasing unit operating
costs.
Fourth quarter netbacks were up 17% from a year earlier as WTI oil prices
increased 51%, averaging US$90.68/bbl, partially offset by a 16% increase in the
value of the Canadian dollar. AECO natural gas prices decreased by 3%.
Unit operating and transportation costs increased by 20%, averaging $13.51/boe
in 2007. A significant portion of this occurred in the UK (unit operating
expense up 30%) with a large component related to the Auk/Fulmar acquisition
late in 2006. The high unit operating costs associated with these fields are
expected to fall significantly with Auk redevelopment.
Average royalty rates for the Company were unchanged at 17% for the year.
Proved Reserves
Million BOE
------------
December 31, 2006 1,667
Discoveries, extensions and
additions 109
Net acquisitions and dispositions (10)
Net revisions and transfers 58
Production (164)
December 31, 2007 1,660
-----------------------------------------------
Probable Reserves
December 31, 2007 972
-----------------------------------------------
The Company replaced 102% of its production with proved reserves (excluding net
acquisitions and dispositions) in 2007, with a three year average of 113%.
Regionally, the Company replaced 148% of production in Scandinavia, 116% in the
UK and 112% of North American natural gas production. The replacement ratio in
Southeast Asia was only 76%, however, this does not take into account recent
drilling successes offshore Vietnam.
Approximately 36% of Talisman's proved reserves are in North America, 29% in the
North Sea and 29% in Southeast Asia. Total proved reserves were down slightly
from year-end 2006, reflecting non-core asset sales. At year end, the Company
had 2.6 billion boe of proved and probable reserves with a reserve life index of
16 years.
North America
Despite significant reductions in spending in North America over the course of
2007, the Company had a successful year, replacing 112% of its natural gas
production (excluding net acquisitions and dispositions) and growing production
in a number of key areas. Talisman drilled 99 gross gas wells during the
quarter, approximately 15% less than the number drilled in the same period last
year, reflecting a 14% reduction in capital spending compared to a year earlier.
Natural gas production averaged 855 mmcf/d, down 9% (87 mmcf/d), compared to the
fourth quarter of last year as sales of non-core assets reduced volumes in the
quarter by 68 mmcf/d and third party shutdowns reduced volumes by another 11
mmcf/d. However, new production records were set in the Alberta Foothills
(reaching 229 mmcf/d in December), with production from the area 18% above the
fourth quarter of 2006.
The Company also saw production increases over the same period in 2006 at
Monkman (12%) and Bigstone/Wild River (8%). Bigstone set a production record of
69 mmcf/d in December.
In the Outer Foothills, a number of promising discoveries were made in the
southern part of the play area.
Talisman's Midstream operations transported and processed 605 mmcf/d in the
quarter. The expansion of the Cutbank Complex was completed and onstream by the
end of the fourth quarter, resulting in a new record of 650 mmcf/d in the last
week of December.
North Sea
Production from continuing operations in the North Sea increased by 2% in 2007,
the result of new projects coming onstream at Tweedsmuir, Enoch, Blane, Duart
and Wood. In addition, the region continued to generate very high returns with
netbacks averaging approximately $47/boe for the year.
Talisman's UK production averaged 118,000 boe/d in the quarter, down 3% from the
same period in 2006. However, excluding asset sales, production from continuing
operations increased 3%, to 101,000 boe/d.
Late in 2007, the Company announced a significant gas condensate discovery at
Cayley in the Montrose Arbroath area. Appraisal drilling has been completed and
the Company booked 21 mmboe of probable reserves associated with the discovery
at year end. Talisman has a 58.97% working interest in the field.
During the quarter, Talisman drilled a successful appraisal well at Auk North.
The Auk field was acquired in the fourth quarter of 2006 and Talisman intends to
redevelop the field, which should significantly increase production.
At Tweedsmuir the gas plant was commissioned recently and production has
increased to 20,000 boe/d at present. Further plant modifications are being
implemented to enable greater flow rates as commissioning activities continue.
The Wood field started production on December 19.
Talisman entered into an agreement to sell the Beatrice oil field with the
transaction expected to close mid-2008. Near the Beatrice platform, the second
wind farm demonstrator turbine was fully commissioned.
Production in Scandinavia averaged 34,000 boe/d during the quarter, down 3% over
the fourth quarter of 2006. Talisman drilled two successful Gyda development
wells during the quarter. Development work is continuing on the Rev field with
first production expected in mid-2008 and at Yme with first production expected
in 2009.
Southeast Asia
In the Commercial Arrangement Area between Malaysia and Vietnam (PM-3 CAA), the
Company has a major development project underway in the Northern Fields, with
first gas sales expected by mid-2008 and oil production early in 2009.
Development drilling commenced on schedule in late 2007 and a number of
platforms and other major pieces of equipment were installed during the fourth
quarter.
In Vietnam, the Hai Su Den exploration well in Block 15-02/01 was successful and
tested at combined rates of over 21,000 boe/d, limited by test equipment. Two
new exploration wells at Hai Su Bac and Hai Su Nau will start drilling shortly.
Production during the quarter averaged 89,000 boe/d, 11% lower than the fourth
quarter of 2006, as lower liquids volumes (due to a planned shut-down at PM-3
CAA, as well as natural declines) more than offset an increase in natural gas
sales.
The five-well development drilling program in the Song Doc Field in Block 46/02
is complete and first oil is expected in the third quarter of 2008.
In Indonesia, natural gas production averaged a record 228 mmcf/d, up 11% over
2006. Gas sales to West Java began in October at 50 mmcf/d and are expected to
ramp up over the course of the year. Talisman also acquired a 3.06% interest in
the Tangguh LNG Project, located in West Papua, Indonesia. The project will have
a nameplate capacity of 7.6 million tons per year with first LNG production
expected at the end of 2008.
North Africa & South America
In other areas, production averaged 22,091 bbls/d during the quarter, an
increase of 7% from the same period a year ago. Production in Algeria increased
over 2006, reflecting the tie-in of the expanded gas injection facilities at
Greater MLN.
In Trinidad and Tobago, successful offshore exploration and development wells
were completed during the quarter and pre-development activities continue for
the Angostura Phase 2 gas development project.
In South America, the Company continues to evaluate exploration opportunities,
with 3-D seismic programs completed on Blocks 64 and 101 in Peru and acquisition
of 2-D seismic in the Niscota and Tangara blocks in Colombia.
Talisman Energy Inc.
Highlights
(unaudited)
Three months ended Years ended
December 31 December 31
2007 2006 2007 2006
----------------------------------------------------------------------
Financial
(millions of C$ unless otherwise
stated)
Cash flow (1) 1,013 1,130 4,327 4,748
Net income 656 598 2,078 2,005
Exploration and development
expenditures 1,125 1,315 4,445 4,578
Per common share (C$)
Cash flow (1) 0.99 1.05 4.19 4.35
Net income 0.64 0.55 2.01 1.84
----------------------------------------------------------------------
Production
(daily average)
Oil and liquids (bbls/d)
North America 39,884 47,054 43,299 49,846
UK 104,351 102,064 101,993 102,742
Scandinavia 31,424 32,677 30,602 32,474
Southeast Asia 37,540 51,953 44,167 51,582
Other 22,091 20,733 20,653 21,559
Synthetic oil - 4,027 - 3,431
----------------------------------------------------------------------
Total oil and liquids 235,290 258,508 240,714 261,634
----------------------------------------------------------------------
Natural gas (mmcf/d)
North America 855 942 876 910
UK 82 118 88 126
Scandinavia 17 16 14 14
Southeast Asia 308 288 287 292
----------------------------------------------------------------------
Total natural gas 1,262 1,364 1,265 1,342
----------------------------------------------------------------------
Total mboe/d (2) 446 486 452 485
----------------------------------------------------------------------
Prices (3)
Oil and liquids (C$/bbl)
North America 66.38 50.90 59.53 56.73
UK 87.95 67.40 76.47 72.11
Scandinavia 90.31 69.14 78.16 73.79
Southeast Asia 93.17 67.21 82.03 74.62
Other 91.98 66.78 80.37 71.65
----------------------------------------------------------------------
Crude oil and natural gas liquids 85.82 64.48 75.00 69.82
Synthetic oil - 66.93 - 68.52
----------------------------------------------------------------------
Total oil and liquids 85.82 64.52 75.00 69.80
----------------------------------------------------------------------
Natural gas (C$/mcf)
North America 6.48 6.94 6.90 7.12
UK 8.25 7.52 7.19 8.50
Scandinavia 5.11 4.60 4.78 4.92
Southeast Asia 7.47 5.75 7.33 6.95
----------------------------------------------------------------------
Total natural gas 6.81 6.72 6.99 7.20
----------------------------------------------------------------------
Total (C$/boe) (includes synthetic)
(2) 64.60 53.18 59.57 57.53
----------------------------------------------------------------------
(1) Cash flow and cash flow per share are non-GAAP measures.
(2) Barrels of oil equivalent (boe) is calculated at a conversion rate
of six thousand cubic feet (mcf) of natural gas for one barrel of
oil.
(3) Prices are before hedging.
Includes the results from continuing and discontinued operations.
Talisman Energy Inc.
Consolidated Balance Sheets
(unaudited)
December 31 (millions of C$) 2007 2006
----------------------------------------------------------------------
(restated)
Assets
Current
Cash and cash equivalents 536 103
Accounts receivable 1,159 1,068
Inventories 109 186
Prepaid expenses 12 25
Assets of discontinued operations 59 918
----------------------------------------------------------------------
1,875 2,300
----------------------------------------------------------------------
Other assets 387 354
Goodwill 1,418 1,522
Property, plant and equipment 17,763 17,278
Assets of discontinued operations - 27
----------------------------------------------------------------------
19,568 19,181
----------------------------------------------------------------------
Total assets 21,443 21,481
----------------------------------------------------------------------
Liabilities
Current
Bank indebtedness 15 39
Accounts payable and accrued
liabilities 1,907 2,449
Income and other taxes payable 388 412
Liabilities of discontinued
operations 19 282
----------------------------------------------------------------------
2,329 3,182
----------------------------------------------------------------------
Deferred credits 21 59
Asset retirement obligations 1,981 1,848
Other long-term obligations 140 155
Long-term debt 4,862 4,560
Future income taxes 4,147 4,361
Liabilities of discontinued
operations - 9
----------------------------------------------------------------------
11,151 10,992
----------------------------------------------------------------------
Contingencies and commitments
Shareholders' equity
Common shares 2,437 2,533
Contributed surplus 64 67
Retained earnings 5,651 4,585
Accumulated other comprehensive income
(loss) (189) 122
----------------------------------------------------------------------
7,963 7,307
----------------------------------------------------------------------
Total liabilities and shareholders'
equity 21,443 21,481
----------------------------------------------------------------------
Prior year balances have been restated to reflect the financial
position of discontinued operations, the adoption of new accounting
standards and the reclassification of certain amounts to conform to
current year presentation.
Talisman Energy Inc.
Consolidated Statements of Income
(unaudited)
Three months ended Years ended
(millions of C$ December 31 December 31
except per share amounts) 2007 2006 2007 2006
----------------------------------------------------- ----------------
(restated) (restated)
Revenue
Gross sales 2,495 2,120 9,265 8,991
Hedging gains 3 23 104 66
----------------------------------------------------- ----------------
Gross sales, net of hedging 2,498 2,143 9,369 9,057
Less royalties 450 337 1,598 1,522
----------------------------------------------------- ----------------
Net sales 2,048 1,806 7,771 7,535
Other 37 34 148 111
----------------------------------------------------- ----------------
Total revenue 2,085 1,840 7,919 7,646
----------------------------------------------------- ----------------
Expenses
Operating 509 395 1,895 1,550
Transportation 49 53 210 207
General and administrative 57 70 223 233
Depreciation, depletion and
amortization 574 499 2,316 1,926
Dry hole 322 176 684 296
Exploration 92 111 318 318
Interest on long-term debt 54 44 205 166
Stock-based compensation (53) 98 (15) 51
Loss on held-for-trading
financial instruments 41 - 25 -
Other 56 (96) 41 (29)
----------------------------------------------------- ----------------
Total expenses 1,701 1,350 5,902 4,718
----------------------------------------------------- ----------------
Income from continuing operations
before taxes 384 490 2,017 2,928
----------------------------------------------------- ----------------
Taxes
Current income tax 258 110 782 770
Future income tax (244) (18) (67) 498
Petroleum revenue tax 59 59 256 290
----------------------------------------------------- ----------------
73 151 971 1,558
----------------------------------------------------- ----------------
Net income from continuing
operations 311 339 1,046 1,370
----------------------------------------------------- ----------------
Net income from discontinued
operations 345 259 1,032 635
----------------------------------------------------- ----------------
Net income 656 598 2,078 2,005
----------------------------------------------------- ----------------
Per common share (C$)
Net income from continuing
operations 0.31 0.31 1.01 1.25
Diluted net income from
continuing operations 0.30 0.31 0.99 1.22
Net income from discontinued
operations 0.33 0.25 1.00 0.59
Diluted net income from
discontinued operations 0.33 0.23 0.98 0.57
Net income 0.64 0.56 2.01 1.84
Diluted net income 0.63 0.54 1.97 1.79
----------------------------------------------------- ----------------
Average number of common shares
outstanding (millions) 1,019 1,078 1,032 1,092
Diluted number of common shares
outstanding (millions) 1,039 1,106 1,056 1,122
----------------------------------------------------- ----------------
Prior year balances have been restated to reflect the results of
discontinued operations.
Talisman Energy Inc.
Consolidated Statements of Cash Flows
(unaudited)
Three months ended Years ended
December 31 December 31
(millions of C$) 2007 2006 2007 2006
----------------------------------------------------------------------
(restated) (restated)
Operating
Net income from continuing
operations 311 339 1,046 1,370
Items not involving cash 652 644 2,861 2,557
Exploration 92 111 318 318
----------------------------------------------------------------------
1,055 1,094 4,225 4,245
Changes in non-cash working
capital (149) (158) (257) (374)
----------------------------------------------------------------------
Cash provided by continuing
operations 906 936 3,968 3,871
Cash provided by discontinued
operations (42) 36 102 503
----------------------------------------------------------------------
Cash provided by operating
activities 864 972 4,070 4,374
----------------------------------------------------------------------
Investing
Corporate acquisitions, net of
cash acquired (209) - (209) (66)
Capital expenditures
Exploration, development and
other (1,140) (1,303) (4,430) (4,482)
Property acquisitions (12) (195) (54) (201)
Proceeds of resource property
dispositions 4 110 41 112
Investments - - 243 -
Changes in non-cash working
capital 66 206 (206) 246
Discontinued operations, net of
capital expenditures 470 365 1,376 621
----------------------------------------------------------------------
Cash used in investing activities (821) (817) (3,239) (3,770)
----------------------------------------------------------------------
Financing
Long-term debt repaid (335) (1,020) (2,051) (4,570)
Long-term debt issued 765 1,399 2,837 4,786
Common shares purchased - (500) (946) (656)
Common share dividends (89) (81) (180) (163)
Deferred credits and other (23) (23) (42) (77)
Changes in non-cash working
capital 13 - 13 -
----------------------------------------------------------------------
Cash used in financing activities 331 (225) (369) (680)
----------------------------------------------------------------------
Effect of translation on foreign
currency cash and cash
equivalents - - (5) 10
----------------------------------------------------------------------
Net increase in cash and cash
equivalents 374 (70) 457 (66)
Cash and cash equivalents, net,
beginning of period 147 134 64 130
----------------------------------------------------------------------
Cash and cash equivalents, net,
end of period 521 64 521 64
----------------------------------------------------------------------
Prior year balances have been restated to reflect the results of
discontinued operations.
Earnings from operations
(millions of C$, except per share
amounts)
Three months ended Year ended
------------------------------
December 31, 2007 2006 2007 2006
----------------------------------------------------------------------
Net Income 656 598 2,078 2,005
----------------------------------------------------------------------
Operating income from
discontinued operations 33 50 148 279
Gain on disposition of
discontinued operations 312 209 884 356
----------------------------------------------------------------------
Net income from discontinued operations 345 259 1,032 635
----------------------------------------------------------------------
Net income from continuing operations 311 339 1,046 1,370
Unrealized loss on held-for-trading
instruments 36 - 49 -
Realized gain on Canadian Oil Sands
Trust units - - (19) -
Stock-based compensation (tax adjusted) (37) 65 (10) 32
Future tax charge/(recovery) of
unrealized foreign exchange
gains/(losses) on foreign denominated
debt (11) (51) 100 (27)
Future tax rate reductions and other (162) (31) (188) 126
----------------------------------------------------------------------
Earnings from continuing operations(1) 137 322 978 1,501
----------------------------------------------------------------------
Per share 0.13 0.30 0.95 1.37
----------------------------------------------------------------------
Cash flow
(millions of C$)
Three months ended Year ended
------------------------------
December 31, 2007 2006 2007 2006
----------------------------------------------------------------------
Cash flow provided by operating
activities 864 972 4,070 4,374
Changes in non-cash working capital 149 158 257 374
----------------------------------------------------------------------
Cash flow(1) 1,013 1,130 4,327 4,748
----------------------------------------------------------------------
Net debt
(millions of C$)
Year ended
-----------
December 31, 2007 2006
----------------------------------------------------------------------
Long-term debt 4,862 4,560
Bank indebtedness 15 39
Cash and cash equivalents (536) (103)
----------------------------------------------------------------------
Net debt(1) 4,341 4,496
----------------------------------------------------------------------
(1) "Cash flow", "earnings from continuing operations","earnings from
continuing operations per share" and "net debt" are non-GAAP
measures.
Talisman Energy Inc. is an independent upstream oil and gas company
headquartered in Calgary, Alberta, Canada. The Company and its subsidiaries have
operations in North America, the North Sea, Southeast Asia, and North Africa.
Talisman's subsidiaries are also active in a number of other international
areas. Talisman is committed to conducting its business in an ethically,
socially and environmentally responsible manner. The Company is a participant in
the United Nations Global Compact and included in the Dow Jones Sustainability
(North America) Index. Talisman's shares are listed on the Toronto Stock
Exchange in Canada and the New York Stock Exchange in the United States under
the symbol TLM.
For further information, please contact:
Media and General Inquiries: Shareholder and Investor Inquiries:
David Mann, Senior Manager, Corporate Christopher J. LeGallais
& Investor Communications Senior Manager, Investor Relations
Phone: 403-237-1196 Fax: 403-237-1210 Phone: 403-237-1957 Fax: 403-237-1210
E-mail: tlm@talisman-energy.com Email: tlm@talisman-energy.com 06-08
06-08
Forward-Looking Information
This press release contains information that constitutes "forward-looking
information" or "forward-looking statements" (collectively "forward-looking
information") within the meaning of applicable securities legislation. This
forward-looking information includes, among others, statements regarding:
-- estimates of future sales, production, production growth and operations
performance;
-- business plans for drilling, exploration, development, redevelopment and
estimated timing;
-- business strategy, business strategy review and plans;
-- estimated timing and results of new projects, including the timing of
new production and LNG;
-- expected asset sales and timing; and
-- other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events, conditions,
results of operations or performance.
Often, but not always, forward-looking information uses words or phrases such
as: "expects", "does not expect" or "is expected", "anticipates" or "does not
anticipate", "plans" or "planned", "estimates" or "estimated", "projects" or
"projected", "forecasts" or "forecasted", "believes", "intends", "likely",
"possible\", "probable", "scheduled", "positioned", "goal", "objective" or states
that certain actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved.
Various assumptions were used in drawing the conclusions or making the forecasts
and projections contained in the forward-looking information contained in this
press release. Information regarding oil and gas reserves, business plans for
drilling, exploration, development, and appraisal assumes that the extraction of
crude oil, natural gas and natural gas liquids remains economic.
Undue reliance should not be placed on forward-looking information.
Forward-looking information is based on current expectations, estimates and
projections that involve a number of risks which could cause actual results to
vary and in some instances to differ materially from those anticipated by
Talisman and described in the forward-looking information contained in this
press release. The material risk factors include, but are not limited to:
-- the risks of the oil and gas industry, such as operational risks in
exploring for, developing and producing crude oil and natural gas,
market demand and unpredictable facilities outages;
-- risks and uncertainties involving geology of oil and gas deposits;
-- the uncertainty of reserves and resources estimates, reserves life and
underlying reservoir risk;
-- the uncertainty of estimates and projections relating to production,
costs and expenses;
-- potential delays or changes in plans with respect to exploration or
development projects or capital expenditures;
-- the risk that adequate pipeline capacity to transport gas to market may
not be available;
-- fluctuations in oil and gas prices, foreign currency exchange rates and
interest rates;
-- the outcome and effects of any future acquisitions and dispositions;
-- health, safety and environmental risks;
-- uncertainties as to the availability and cost of financing and changes
in capital markets;
-- risks in conducting foreign operations (for example, political and
fiscal instability or the possibility of civil unrest or military
action);
-- competitive actions of other companies, including increased competition
from other oil and gas companies;
-- changes in general economic and business conditions;
-- the effect of acts of, or actions against, international terrorism;
-- the possibility that government policies or laws may change or
governmental approvals may be delayed or withheld;
-- results of the Company's risk mitigation strategies, including insurance
and any hedging activities; and
-- the Company's ability to implement its business strategy.
The foregoing list of risk factors is not exhaustive. Additional information on
these and other factors which could affect the Company's operations or financial
results are included in the Company's most recent Annual Information Form. In
addition, information is available in the Company's other reports on file with
Canadian securities regulatory authorities and the United States Securities and
Exchange Commission (SEC).
Forward-looking information is based on the estimates and opinions of the
Company's management at the time the information is presented. The Company
assumes no obligation to update forward-looking information should circumstances
or management's estimates or opinions change, except as required by law.
Reserves Data and Other Oil and Gas Information
Talisman's disclosure of reserves data and other oil and gas information is made
in reliance on an exemption granted to Talisman by Canadian securities
regulatory authorities, which permits Talisman to provide disclosure in
accordance with US disclosure requirements. The information provided by Talisman
may differ from the corresponding information prepared in accordance with
Canadian disclosure standards under National Instrument 51-101 (NI 51-101).
Talisman's proved reserves have been calculated using the standards contained in
Regulation S-X of the SEC. US practice is to disclose net proved reserves after
deduction of estimated royalty burdens, including net profits interests.
Talisman makes additional voluntary disclosure of gross proved reserves.
Probable reserves, which Talisman also discloses voluntarily, have been
calculated using the definition of probable reserves set out by the Society of
Petroleum Engineers/World Petroleum Congress ('SPE/WPC'). Talisman's estimates
of proved reserves and probable reserves are based on the same price
assumptions. Further information on the differences between the US requirements
and the NI 51-101 requirements is set forth under the heading 'Note Regarding
Reserves Data and Other Oil and Gas Information' in Talisman's Annual
Information Form.
The exemption granted to Talisman also permits it to disclose internally
evaluated reserves data. Any reserves data in this press release reflects
Talisman's estimates of its reserves. While Talisman annually obtains an
independent audit of a portion of its reserves, no independent qualified
reserves evaluator or auditor was involved in the preparation of the reserves
data disclosed in this press release. Throughout this press release, the
calculation of barrels of oil equivalent (boe) is at a conversion rate of six
thousand cubic feet (mcf) of natural gas for one barrel of oil and is based on
an energy equivalence conversion method. Boe may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy
equivalence conversion method primarily applicable at the burner tip and does
not represent a value equivalence at the wellhead.
Talisman makes reference to production volumes throughout this press release.
Where not otherwise indicated, such production volumes are stated on a gross
basis, which means they are stated prior to the deduction of royalties and
similar payments. In the US, net production volumes are reported after the
deduction of these amounts.
In this press release, Talisman makes reference to probable reserves in the
Montrose Arbroath area. At year end 2007, Talisman had 404 mmboe of total proved
reserves and 670 mmboe of proved and probable reserves in the UK. The estimates
of reserves and future net revenue for individual properties may not reflect the
same confidence level as estimates of reserves and future net revenue for all
properties, due to the effects of aggregation.
The reserves replacement ratio of 102% (excluding net acquisitions and
dispositions) was calculated by dividing the sum of changes (revisions of
estimates and discoveries) to estimated proved oil and gas reserves during 2007
by the Company's 2007 conventional production.
The Company's management uses reserve replacement ratios, as described above, as
an indicator of the Company's ability to replenish annual production volumes and
grow its reserves. It should be noted that a reserve replacement ratio is a
statistical indicator that has limitations. As an annual measure, the ratio is
limited because it typically varies widely based on the extent and timing of new
discoveries, project sanctioning and property acquisitions. Its predictive and
comparative value is also limited for the same reasons. In addition, since the
ratio does not include the cost, value or timing of future production of new
reserves, it cannot be used as a measure of value creation.
The reserves life index of 16 years for proved and probable reserves was
calculated by dividing year-end proved and probable reserves by the Company's
2007 conventional production.
The SEC normally permits oil and gas companies to disclose in their filings with
the SEC only proved reserves that have been demonstrated by actual production or
conclusive formation tests to be economically and legally producible under
existing economic and operating conditions. Any probable reserves and the
calculations with respect thereto included in this press release do not meet the
SEC's standards for inclusion in documents filed with the SEC.
Canadian Dollars and GAAP
Dollar amounts are presented in Canadian dollars unless otherwise indicated.
Unless otherwise indicated, financial information is presented in accordance
with Canadian generally accepted accounting principles that may differ from
generally accepted accounting principles in the US. Talisman's Consolidated
Financial Statements, which will be filed with Canadian and US securities
authorities on March 7, 2008, contain information concerning differences between
Canadian and US generally accepted accounting principles.
Non-GAAP Financial Measures
Included in this press release are references to financial measures commonly
used in the oil and gas industry, such as cash flow, cash flow per share,
earnings from continuing operations, earnings from continuing operations per
share and net debt. These terms are not defined by GAAP in either Canada or the
US. Consequently, these are referred to as non-GAAP measures. Talisman's
reported results of cash flow, earnings from continuing operations and net debt
may not be comparable to similarly titled measures by other companies.
Cash flow, as commonly used in the oil and gas industry, represents net income
before exploration costs, DD&A, future taxes and other non-cash expenses. Cash
flow is used by the Company to assess operating results between years and
between peer companies that use different accounting policies. Cash flow should
not be considered an alternative to, or more meaningful than, cash provided by
operating, investing and financing activities or net income as determined in
accordance with Canadian GAAP as an indicator of the Company's performance or
liquidity.
Earnings from continuing operations is calculated by adjusting the Company's net
income per the financial statements, for certain items of a non-operational
nature, on an after-tax basis. The Company uses this information to evaluate
performance of core operational activities on a comparable basis between
periods.
Net debt is calculated by adjusting the Company's long-term debt per the
financial statements for bank indebtedness, cash and cash equivalents. The
Company uses this information to assess its true debt position and eliminate the
impact of timing differences.
(1) The terms "cash flow" and "net debt" are non-GAAP measures. Please see the
advisories and reconciliations elsewhere in this press release.
(2) The terms "cash flow per share", "earnings from continuing operations" and
"earnings from continuing operations per share" are non-GAAP measures. Please
see the advisories and reconciliations elsewhere in this press release.
Citi Fun 25 (LSE:AN26)
Historical Stock Chart
From Jun 2024 to Jul 2024
Citi Fun 25 (LSE:AN26)
Historical Stock Chart
From Jul 2023 to Jul 2024
