QUOTE AND NEWS
Reuters  Jul 29  Comment 
(Adds detail and comment in initial four paragraphs and updates share price; in U.S. dollars unless noted)
Wall Street Journal  11 hrs ago  Comment 
Reuters  Jul 29  Comment 
Canada's Talisman Energy Inc, which has been approached by Spain's Repsol SA for talks over a potential deal, reported a 4 percent rise in second-quarter revenue, helped by an increase in North American drilling.
OilVoice  Jul 29  Comment 
alisman Energy Inc. TSXTLM NYSETLM reported its operating and unaudited financial results for the second quarter of 2014. All values are in US unless otherwise stated. quotDuring the past tw
Motley Fool  Jul 24  Comment 
Repsol is rumored to be weighing up an acquisition of Talisman Energy, but will it make the deal?
SeekingAlpha  Jul 24  Comment 
By Jack Banser: Talisman energy (NYSE:TLM) has fallen on tough times in the past few years. In 2013, the company posted a massive loss and production was cut significantly mostly because of the sale of some of its North Sea assets. Simply put,...
Motley Fool  Jul 23  Comment 
Talisman Energy announces yet more asset disposals, but what will be left of the company in the long term?
StreetInsider.com  Jul 23  Comment 
The following is a list of notable articles to help get you through the lunch hour: Microsoft (MSFT) Launches GoPro (GPRO) Channel on Xbox One -> Read this! Goldman Sachs Options Research Recommends Six Trades (LAZ) (CBOE) (PXD) (ODP) (OLED)...
TheStreet.com  Jul 23  Comment 
NEW YORK (TheStreet) -- Talisman Energy was gaining 10.6% to $10.89 Wednesday after confirming that it was approached by Repsol regarding various transactions. The company said there is no assurance that a deal will be reached. Talisman won't...
Benzinga  Jul 23  Comment 
Talisman Energy (NYSE: TLM) jumped nearly 12 percent in after-hours action on a report that Spain's Repsol SA is mulling a bid for the Canada-based energy company. Citing "people familiar with the matter," Bloomberg news service said Repsol is...
StreetInsider.com  Jul 22  Comment 
Shares of Puma Biotechnology, Inc. (NYSE: PBYI) 179.5% HIGHER; positive top line results from the Phase III clinical trial of Puma's investigational drug PB272 (neratinib) for the extended adjuvant treatment of breast cancer (ExteNET Trial). The...




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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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