Talisman Energy Generates $2.7 Billion In Cash Flow; Earnings Exceed $1.0 Billion; Fourth Quarter Production Per Share Up 15%
16:51 EST Wednesday, March 03, 2004
CALGARY, Alberta (Business Wire) -- Talisman Energy Inc. (NYSE:TLM) (TSX:TLM) released its 2003 consolidated financial and operating results today. Highlights include a significant increase in fourth quarter production, development of new core areas and continued financial strength.
The Company posted its fifth consecutive annual increase in cash flow and cash flow per share in 2003. Cash flow increased 3% to $2.7 billion, while cash flow per share was up 7% to $21.21. Excluding Sudan, cash flow per share increased 21% over 2002. Fourth quarter cash flow and cash flow per share were $644 million and $5.03, respectively.
Earnings per share more than doubled to $7.65 in 2003, while total net income surpassed one billion dollars for the first time. Higher net income reflected both increased cash flow and a $296 million gain on the sale of Talisman's indirect interest in the Sudan project. Fourth quarter earnings were $0.80/share or $107 million. Excluding Sudan, net income per share was 145% higher than 2002.
Production averaged 398,000 boe/d, down from 445,000 boe/d in 2002, which included 60,000 bbls/d from Sudan. Production in the fourth quarter averaged 419,000 boe/d, representing a 15% increase in production per share over the same period a year earlier, excluding Sudan.
"This has been a pivotal year for Talisman," said Dr. Jim Buckee, President and Chief Executive Officer. "We have repositioned the Company, exiting Sudan and establishing or expanding positions in the United States, the North Sea and Southeast Asia. We also bolstered our midstream assets in west central Alberta, adding infrastructure in support of our North American natural gas growth targets of 3-5% per annum.
"Results from Appalachia are very encouraging. Over the past four months we have tested five wells at combined rates of 69 mmcf/d. Several wells have tested around 20 mmcf/d and were restricted by surface equipment.
"A major accomplishment in 2003 was the commissioning of the $1 billion PM-3 CAA project in Malaysia/Vietnam on time and on budget. These properties are currently producing over 40,000 boe/d. In addition, we commenced production in Algeria and the Greater Angostura oil and gas development project is underway in Trinidad.
"The Company is poised to deliver 5-10% production per share growth in 2004, 2005 and 2006. We've also added a number of higher impact exploration plays to our portfolio in areas like Alaska, Colombia and Qatar, which are riskier but could deliver large upside.
"Additions to proved reserves from all sources in 2003 replaced 127% of production, excluding Sudan. At year end, we had 1.36 billion BOEs of proved reserves comprised of natural gas and relatively light, high quality crude oil and liquids. Finding and development costs averaged $14.28/boe (US$11.71/boe net). However, this doesn't reflect over 100 mmboes of international probable reserves at Corridor in Indonesia and J1/J5 in the North Sea, which we expect will be transferred to proved in 2004. Because of this imprecise match between spending and reserves bookings, we believe that Talisman's three-year average reserve replacement cost of $8.76/boe (US$7.72/boe net) better reflects our underlying performance.
"The Company is in excellent financial health, with year-end long-term debt less than annual cash flow. The Talisman Board has approved a three for one share split subject to shareholder and regulatory approval. In light of this, the Board will review increasing the annual dividend to $0.30 per share on a post-split basis.
"In 2004, production is expected to be between 415,000-445,000 boe/d and, year-to-date, has averaged over 430,000 boe/d. Commodity prices have remained strong early in 2004, reflecting continuing economic growth, political uncertainty and chronic supply shortages. Based on US$30/bbl WTI prices, US$5.00/mcf NYMEX gas prices and a Canadian/US dollar exchange rate of $0.76, Talisman could generate $19-20 in cash flow per share this year."
Continued Financial Strength
The Company generated record cash flow and earnings in 2003. Other financial highlights for the year included:
- Repurchase of 3.3 million shares,
- An $800 million reduction in long-term debt,
- An increase in the annual dividend payment from $0.60/share to
$0.80/share. |
