Talisman Reports Lower Quarterly Profit on Brent Oil Prices

Talisman Energy Inc. (TLM), the Canadian oil and natural gas producer with operations on six continents, reported a drop in second-quarter profit as crude prices fell.

Net income fell to $97 million, or 6 cents a share, from $196 million, or 14 cents, a year earlier, the Calgary-based company said in a statement on Marketwired today.

Hal Kvisle, Talisman’s chief executive officer, said in March he wants to raise as much as $3 billion from asset sales or joint ventures over 12 to 18 months to reduce debt and streamline the company. Talisman’s production has dropped 4.1 percent in the past three years as the company reduced North American gas output amid falling prices and sold 49 percent of its U.K. business to China Petrochemical Corp. in 2012.

“There really isn’t any production growth coming out of North America,” so Talisman isn’t benefiting much from the rise in gas prices since last year, Todd Kepler, an analyst at Cormark Securities Inc. in Calgary, said in a July 23 phone interview. “The bulk of operations are still North Sea and Southeast Asia, so they have a lot of Brent pricing.”

Talisman said it started a sales process for its Norway, Montney and North Duvernay assets, as well as its equity stake in the Ocensa pipeline in Colombia. It revised its 2013 production outlook to the lower end of the 375,000-395,000 barrels of oil equivalent a day range.

Average prices for Brent oil, an international benchmark, fell 5 percent from a year earlier to $103.35 a barrel in the second quarter. North American gas prices gained 71 percent on the New York Mercantile Exchange during the quarter, after reaching a decade low last year.

The quarterly results were released before the start of regular trading on North American markets. Talisman rose 0.7 percent to C$11.94 in Toronto yesterday. The shares, which have risen 6.1 percent this year, have eight buy, 15 hold and one sell recommendation from analysts.

To contact the reporters on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net; 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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