Talisman Reports Quarterly Loss on Reduced Production

(Corrects month in fourth paragraph.)

Talisman Energy Inc. (TLM), the Canadian oil and natural gas producer seeking to sell as much as $3 billion in assets, reported a first-quarter loss for the first time in two years on lower production.

The net loss of $213 million compared with profit of $291 million a year earlier, the Calgary-based company said in a statement on Marketwired today. Excluding one-time items, the loss of 6 cents a share compared with the 1.5-cent average profit of 18 analysts’ estimates compiled by Bloomberg.

Production averaged 372,000 barrels of oil equivalent a day, down 5 percent from the previous quarter and 19 percent from the year-earlier period.

Hal Kvisle, the company’s chief executive officer since September, said in March he’s seeking to raise as much as $3 billion from asset sales or joint ventures over the next 12 to 18 months as Talisman reduces debt and cuts spending on gas production.

“They need to rationalize and focus on higher-return projects,” Chris Feltin, a Calgary-based analyst at Macquarie Group Ltd., said in an April 29 phone interview. Talisman’s sale of 49 percent of its U.K. North Sea business to China Petrochemical Corp. in December and the February shutdown of an offshore platform in the region was expected to reduce output last quarter, Feltin said.

About 62 percent of the company’s 2012 output was gas and the rest was oil or natural gas liquids. U.S. gas futures traded in New York have recovered after reaching a 10-year low last year, rising 39 percent from a year earlier to average $3.48 per million British thermal units during the quarter as cold weather boosted demand.

Talisman’s results were released before the start of regular trading on North American markets. The shares rose 1.2 percent to C$12.08 in Toronto yesterday and have eight buy and 18 hold recommendations from analysts, according to data compiled by Bloomberg.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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