Canada Talisman sees big jump in results next year
By Jeffrey Jones
CALGARY, Nov 5 (Reuters) - Talisman Energy Inc., beset with controversy over its role in war-torn Sudan, should post a 50-percent jump in cash flow next year, proving the stock is undervalued, its chief executive said on Friday.
Calgary-based Talisman, Canada's biggest international oil producer, is expected to generate cash flow in 2000 of C$1.5 billion or more than C$10.50 a share -- up from an expected C$1 billion this year -- due to strong oil and gas prices and rising global production, Talisman President and Chief Executive Jim Buckee said.
``Consequently, we're probably trading at about 3.7 times next year's cash flow, which I think you'll agree is rather modest,' Buckee said in a conference call.
After falling C$1.20 on Thursday despite record third-quarter results, Talisman was up 30 Canadian cents to C$38.45 in late Friday Toronto Stock Exchange trade.
The shares have fallen from C$43.50 where they were trading just before Canadian Foreign Minister Lloyd Axworthy said Canada might slap sanctions on the company if it is found to have a role in exacerbating a 16-year civil war in Sudan.
The comment was part of a wide range of initiatives the government said it would undertake to learn more about the murky situation in Sudan and work toward peace.
``Many analysts have a true value closer to C$60 and C$65 and some at C$70, and I would support that view,' Buckee said.
He said the company was expected to produce more than 200,000 barrels of oil a day next year, up from a projected average of 160,000 barrels a day in 1999. He forecast natural gas output would rise 20 percent to more than a billion cubic feet a day.
Buckee said he believed his meeting this week with Axworthy was positive and productive, and said he continued to support Canadian efforts to contribute to the peace process in Sudan, where Talisman holds 25 percent of a major oil development.
Company executives downplayed the possibility of sanctions, saying they did not believe the Canadian government's intention was to hamper Canadian companies, but to promote peace between the Islamist government and the southern-based rebel factions.
($1=$1.47 Canadian)
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