FROM SI CANADIAN OIL:
To:Bobby Yellin who started this subject
From: Kerm Yerman Thursday, May 2, 2002 10:45 AM
Respond to of 9064
Commenting / Talisman Energy
I skipped over quite a few postings that really interested me over the past few days. One of them was the First Quarter Report of Talisman Energy - my personal long term favorite investment. I had signaled out TLM as a great investment when shares were between $26.00 and $39.00 back in time. The basis was their international activities which I had declared as the growth area for the larger Canadian companies. To say the least, that is exactly where the larger operators headed to fuel their growth. At the time, most companies had none - or a minimum, of exposure to the international arena.
When TLM acquired the Sudan property interest, I declared that this acquisition would be looked at - in time, as the "steal of the decade." As controversal as the acquisition was, I said it was a win-win situation for Talisman - meaning it could be sold off if required or held on to, either way it would be beneficial for shareholders.
That was over a couple years ago. Now, lets move on to today. In review of the latest financial report, I found it very positive. To begin, the earnings exceeded most analyst projections. Production numbers were impressive.
What caught my eye was the contribution of the Sudan properties. In a relatively short period of time, oil production in Sudan is almost equal to that of Canada’s contribution. (63,600 vs 58,600 bbls/d) It won’t be long before the number grows to exceed Canadian production.
There has been discussions regarding the sale of the Sudan assets and the sale price of $650 million has been tossed around. I don’t see TLM selling these assets for this price - it’s low by any given analysis. I would like to see Talisman maintain this asset.
Talisman Energy can still be considered a good investment, even at the level of share prices at this time. The financial ratios are low in comparison to their peers. The major reason the stock appears cheap - is due to the risk factor built into the ratios due to the Sudan holdings. I believe that situation will improve in time.
So, where does Talisman go from here. It’s hard to say, but one can depend on considerable growth over the coming 2-3 years with their existing exploration exposure.
I am more interested in further exploration - beyond the 2005 timeline. I like CEO Jim Buckee for I believe he has the right perspective on where to lead his company and an uncanny vision of just how to reach corp. objectives once established.
I would assume the company would desire to diversify their international exposure. I am on record for already stating that it would be benificial for the company to have a stake in Gulf of Mexico waters and such could of been obtained through acquisition of a Canadian company. I think that window of opportunity has come and gone for reasons I won’t expand upon.
So, back to the question - where does Talisman go to expand their exploration base. There is one area I believe they could penetrate and become a major factor. I certainly wouldn’t be disappointed in this move. Where - Mainland China. They have a partner in the Sudan play who could help them out in getting into China. As of now, there is very little international exposure in China. In just the past few days, one of my U.S. favorites, Burlington Rersources, announced a major breakthrough for exploration in China. I believe this to be a fine example of the exposure Talisman can gain if they pursued the same route. It would appear a move like this would also be economically feasable. Timing for such a move is now - for activity beyond 2005.
The following are references for my commenting.
Talisman Three Month Cash Flow $577 Million Net Income $101 Million Production up 11% Over Last Year
newswire.ca
Talisman in talks with India over selling Sudan
nationalpost.com.
Talisman Story Posting - Larry Larson
Message 17411578
Burlington Resources Signs Historic Onshore Gas Sales Agreement in China
biz.yahoo.com
Added Note:
Talisman Energy Inc. Conference Call
CALGARY, April 26 /CNW/ - Talisman Energy Inc. has scheduled a telephone conference call for investors and analysts on Thursday May 2, 2002 at 9:30 a.m. MDT (11:30 a.m. EDT) to discuss Talisman's first quarter results.
Participants will include Dr. Jim Buckee, President and Chief Executive Officer and members of senior management. Talisman's quarterly results should be released on Wednesday, May 1, 2002.
To participate in the conference, please contact the Talisman Energy Conference Operator at 9:20 a.m. (MDT), 10 minutes prior to the conference call.
Conference Operator Dial in Numbers: 1-800-240-6709 (North America) or 1-303-262-2075 (International)
A replay of the conference will be available at approximately 3:00 p.m. (MDT) on Thursday May 2, 2002 to 11:59 p.m. Thursday, May 30, 2002. If you wish to access this replay, please call:
1-877-289-8525 (North America) passcode 186949 followed by the pound key or 1-416-640-1917 (Local Toronto & International) passcode 186949 followed by the pound key |
