Talisman Energy Inc. (TLM), the Canadian oil and natural-gas producer that has underperformed its peers for the past five years, said Chief Executive Officer John Manzoni agreed to leave. Board member Hal Kvisle has replaced him.
Manzoni, who took the helm of the Calgary-based company in 2007, will step down immediately, according to a Talisman statement today. The company didn’t provide a reason for the change. Through the end of last week, Talisman had declined 23 percent since Manzoni, 52, took over in September 2007, compared with a 15 percent drop for the Standard & Poor’s Toronto Stock Exchange energy index.
Kvisle, 59, the former CEO of pipeline company TransCanada Corp. (TRP), has been on Talisman’s board since May 2010. He takes over after Asian investment in Canadian oil and gas producers more than doubled this year, including the $15.1 billion takeover of Nexen Inc. (NXY) by China’s Cnooc Ltd. (883), announced on July 23. TransCanada’s shares gained 63 percent over Kvisle’s tenure as CEO.
Manzoni’s departure follows eight months of discussion by the board and management on ways to “rationalize the asset base,” Kvisle said in a phone interview today. The board decided the company needed a different focus for “our activities and our assets,” Kvisle said.
Talisman rose 1.6 percent to C$14.09 at the close in Toronto.
The Nexen deal probably resulted in frustrated Talisman board members and shareholders who wanted the company to either fix itself or get sold, Philip Skolnick, a New York-based analyst at Canaccord Genuity, wrote in a note to clients today.
Talisman has “too many assets” and could put some on the block or pursue partnerships following a review, Kvisle said. The board isn’t considering selling the company and hasn’t been approached by buyers, nor have shareholders pushed for a sale, Kvisle said. The company will continue to focus on operations in the North Sea, North America and Southeast Asia, he said.
Kvisle is viewed as “a very competent CEO” and since he was already a director of Talisman “there should be no learning curve for him,” Skolnick wrote.
Talisman spent $3.98 billion since 2007 buying assets from Colombia to Papua New Guinea. Manzoni led the company into so- called unconventional formations including North American shale plays. In the past two years, the company bought more than 100,000 acres in Texas’ Eagle Ford shale for $1.55 billion.
“There’s been an impression that Talisman has lost focus,” John Malone, a New York-based analyst at Global Hunter Securities Inc., said in a telephone interview today. “They made two big bets: North American unconventional plays and using North Sea oil to pay for that. In the end they had problems in the North Sea and gas prices didn’t cooperate.”
U.S. gas prices hit a 10-year low in April as new technologies unlocked vast reserves and companies ramped up production.
Talisman took a $248 million after-tax writedown on May 1 because of uncertainty regarding the start of production from the Yme field off Norway. The company evacuated all 140 workers from the Yme platform on July 10 after cracks were found in the steel structure.
Talisman has “great international assets, especially in Southeast Asia” that Asian producers may be interested in buying, Malone said.
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