Talisman Energy aims for international success with post-Sudan projects
Canadian Press, Saturday, May 31
By JAMES STEVENSON
CALGARY (CP) - With his company setting its sights on new exploration property from New York State to the North Sea and a host of nearly completed oil projects around the world, Talisman Energy chief executive Jim Buckee feels like his old self.
Shrouded by four years of controversy over its property in war-torn Sudan and the dragged-out sale process for the operation that ended this spring, Buckee and his Calgary-based company are now spreading out new tentacles around the world. There's a major oil and gas development offshore Malaysia and Vietnam that is already 60 per cent complete. And a stake in another offshore project in Trinidad will begin production in two years.
But it's the thrill of the chase, the exploration game, that has Buckee's blood flowing.
"I like the developments, Malaysia and so on, but the thing that gets me out of bed in the morning is the wells that we're drilling," Buckee said this week in an interview with The Canadian Press.
"And we've got a number (of projects) coming up in the short term that should be very exciting."
One of the areas he's really keen on is in upstate New York, where Talisman acquired a host of natural gas properties late last year and early in 2003.
"This is gas in New York State - right in the backyard of the biggest market. And so if this works well, it's an extremely significant activity."
Just two weeks ago, the company announced another asset grab, paying $123 million for some assets in the Norwegian-controlled North Sea. This tack-on acquisition is designed to complement Talisman's successful oil operations in the U.K. North Sea.
"As far as geology is concerned, the North Sea doesn't recognize the median line - it's the same geology moving right across," said Buckee.
"There's the same attractive features as the (U.K.-controlled) North Sea, but it's much less explored."
Talisman bought the Norwegian properties from London-based super-major BP PLC, Buckee's former employer.
Eleven years ago, BP sold its Canadian assets to local investors, who changed the name to Talisman. Buckee built the company up to be one of Canada's largest independent oil and gas firms, as well as its most internationally active energy firm.
Currently, about half of the company's production is in Canadian natural gas, but that's likely to diminish as new international projects come on stream.
But the four years in Sudan and ethical dilemmas over drilling for oil in a war zone dogged Talisman, driving some investors away and keeping share prices lower than those of its peers.
Buckee acknowledges that drilling in the oil-rich African country "did get a bit trying" when the Sudan controversy began consuming the company.
With Sudan in the rear-view mirror, the market is now waiting to see what Talisman has left in the tank.
Brian Prokop, an energy analyst with Calgary-based Peters & Co., said Buckee has returned to his pre-Sudan excitement amid hopes for double-digit annual growth.
"Sudan, no matter how you slice it, took a lot of management time away from him, so I have noted a significant difference in his tone and demeanour," said Prokop.
"Having said that, I think the market is still waiting for more clear signs."
Talisman's stock price (TSX:TLM) has indeed languished of late, closing Friday at $59.52 on the Toronto stock market.
However, most energy companies have faced the same predicament of waning shareholder interest in the sector, despite huge profits amid high oil and natural gas prices.
Buckee hopes there will be "a catalyst" that leads to a rally in the share price. And he suggests good drilling numbers in New York or Trinidad might just provide that market spark.
There's also expectations the company will use some of the money made from its $1-billion Sudan sale to buy new properties.
A move into oil-rich Alaska has been expected for the past month, but Buckee isn't giving away any secrets.
Still, Talisman will likely have to prove itself again before investor confidence is renewed.
"Jim, for some folks, is still in the penalty box," said Prokop.
"I still think the Street's going to wait for one, two, maybe three quarters performance to see."
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