QUOTE AND NEWS
OilVoice  Aug 17  Comment 
Wood Group has been awarded the front end engineering and design FEED contract for the subsea development of the Talisman Energy Ca Rong Do field offshore Vietnam estimated to contain around 67 mil
OilVoice  May 8  Comment 
As Repsol completes the acquisition of Talisman Energy a new organizational structure has been implemented to include the integrated assets and manage the resulting transformation of Repsol into one
newratings.com  May 7  Comment 
MADRID (dpa-AFX) - Talisman Energy Inc. (TLM, TLM.TO) reported that its net loss for the first quarter of 2015 was $439 million, compared to net income of $491 million in the first quarter of 2014. The prior year result included gain on sale of...
OilVoice  May 7  Comment 
Talisman Energy Inc. TSXTLM NYSETLM reported its operating and unaudited financial results for the first quarter of 2015. All values are in US unless otherwise stated. Talisman delivered soli
OilVoice  Apr 10  Comment 
The Norwegian Petroleum Directorate granted Talisman Energy Norge AS a drilling permit for well 151224 S cf. Section 8 of the Resource Management Regulations. Well 151224 S will be drilled from
Forbes  Apr 9  Comment 
Enterprise Products Partners L.P. (EPD) declared an increase in the quarterly cash distribution paid to partners to $0.375 per common unit, or $1.50 per unit on an annualized basis. The quarterly distribution will be paid on Thursday, May 7, 2015,...
Wall Street Journal  Mar 18  Comment 
Talisman Energy has joined an expanding list of oil-and-gas producers who are cutting jobs and shaving capital budgets as oil prices continue to slump.
OilVoice  Feb 19  Comment 
Talisman Energy Inc. TSXTLM NYSETLM announced today that the holders of its Common Shares and Preferred Shares have approved the proposed arrangement under which Repsol S.A. through a whollyow
Reuters  Feb 18  Comment 
Talisman Energy Inc common shareholders on Wednesday voted to approve an $8.3 billion offer for the Canadian oil and gas producer from Repsol SA, clearing the way...
Benzinga  Feb 10  Comment 
Canada's Talisman Energy Inc (NYSE: TLM) reported a wider loss for the fourth quarter. The Calgary, Canada-based company posted a quarterly net loss of $1.59 billion, or $1.54 per share, versus year-ago loss of $1.01 billion, or $0.98 per share....




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Talisman Energy (NYSE:TLM) is primarily an Oil and gas exploration and production company with some natural gas midstream operations in Canada. Their operations can be segmented into 3 sections: North America (primarily Canadian natural gas), North Sea (mostly oil) and Southeast Asia (mostly oil with some nat. gas). They also have non-operating interests in African energy plays.

This is a relatively more exciting company in the oil space. Almost all of the growth visibility is mired in nasty oil sands, politically hostile territories, deep beneath the ocean or in the hands of national oil companies who put politics ahead of profits. Throw in an escalating cost environment and the outlook for oil companies is highly uncertain, even as the outlook for the commodity couldn't be stronger.

Company Overview

Like many growing resource companies, TLM's capital expenditure is uneven, swinging from heavy outlays one year to big free cash flow (FCF) another year. At some point, the company has to be able to convert its assets into cash for the owners.

Business Segments

In 2009, TLM earned a total of $6.2 billion in total revenues. This was a decline from its 2008 total revenues of $8.1 billion. As a result, this had an adverse effect on TLM's net income. Between 2008 and 2009, TLM's net income declined from a net profit of $2.75 billion in 2008 to a net loss of $675 million in 2009.

Trends and Forces

Divesting Non core assets

Looking at their capital structure, the company is in the process of divesting non-core assets. They're in the midst of a share buyback program and plan on using sales proceeds to pay down some of the debt and for buybacks. The company pays a small dividend (1% yield on 8% payout ratio) but has increased it near 20% annually over the last few years. The trend of divesting non core assets should help the company improve their overall profitability as it allows TLM to focus on areas where they have the most expertise.

Diverse Portfolio

TLM has a widely diverse portfolio. For instance, they have a big natural gas component in Canada, which is expected perform well as oil sands production ramps up. They also have light oil crude assets in the North Sea and Southeast Asia are in high-demand with good price realizations. Furthermore, Talisman has divested their oil sands assets and now has no bitumen reserves in its portfolio. The diversity of TLM's products as well as its geographic diversity makes TLM's risk lower than it otherwise would be.

Competitors

EnCana – refocused on Canadian oil sands projects and North American natural gas

  • Huge gas wells drilled in the Deep Bossier region of TX
  • Partnering with ConocoPhillips in the oil sands play
  • Oil sands subject to significant cost overruns
  • Rockies exposure not ideal

Devon Energy - attractively valued but paying more for revenues; more balanced gas/oil portfolio Barnett Shale- holdings should provide stable reserves replacement for years

  • good net margins
  • More exposure to oil in Gulf of Mexico
  • Growth primarily through acquisitions ($5.5 billion in goodwill)
  • Riskier exploration plays (10,000 feet deepwater Jack project, Brazilian offshore, etc).
  • Jackfish oil sands project in Alberta subject to oil sands difficulties (higher costs, nat. gas and water shortages, etc)

References

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