Talisman Energy Generates $2 Billion in Cash Flow Year to Date Sets New Record for a Quarter
biz.yahoo.com
Thursday July 28, 7:00 am ET
CALGARY, Alberta--(BUSINESS WIRE)--July 28, 2005--Talisman Energy Inc. (TLM) today reported its second quarter operating and financial results.
Cash flow for the quarter was $993 million ($2.70/share), an increase of 30% compared to $761 million ($1.98/share) a year earlier and $960 million ($2.59/share) in the first quarter of 2005. Cash flow to June 30 was $1,953 million ($5.29/share) compared to $1,531 million ($3.99/share) a year ago, an increase of 28%.
Net income for the quarter was $340 million ($0.93/share) compared to $193 million ($0.50/share) a year ago and $258 million ($0.70/share) in the previous quarter. Net income to June 30 was $598 million ($1.62/share) compared to $411 million ($1.07/share) a year ago.
Earnings from operations for the quarter increased 93%, totaling $428 million ($1.16/share) during the quarter versus $222 million ($0.58/share) a year earlier and $377 million ($1.02/share) in the first quarter of 2005. Earnings from operations adjusts for non-operational impacts on earnings such as the mark-to-market effect of changes in share prices on stock based compensation expense and changes to tax rates and is calculated to better illustrate Talisman's performance on an internally consistent basis.
Production averaged 444,000 boe/d, an increase of 2% over the same quarter of 2004, but slightly lower than the first quarter due to maintenance and plant turnarounds. Natural gas production averaged 1,292 mmcf/d in the quarter, an increase of 4% over the second quarter of 2004. Talisman's North American natural gas production averaged 911 mmcf/d, an increase of 3% over the comparable quarter a year ago. Oil and liquids production averaged 228,977 bbls/d, similar to production in the second quarter of 2004.
"Talisman continues to deliver extremely good financial results on the back of steady year over year volume growth, with production per share up 7% year to date," said Dr. Jim Buckee, President and Chief Executive Officer. "Drilling results in North America continue to be very good, with a number of promising wells about to test. Tweedsmuir, our major field development in the North Sea, is on schedule for first production early in 2007. The South Angsi field in Malaysia will commence production within the next few weeks. We also expect to spud our first onshore well in Trinidad during the third quarter.
"With fewer plant turnarounds, South Angsi startup and increasing natural gas volumes, we expect production volumes in the 450,000-470,000 boe/d range for the third quarter and an additional increase of approximately 30,000 boe/d in the fourth quarter. Our production estimate for the year is 455,000-475,000 boe/d.
"Earnings from operations were $1.16 per share in the quarter, compared to a consensus number or 'street estimate' of $1.07 per share. WTI oil prices averaged approximately US$53/bbl during the quarter as world oil demand continues to grow against limited spare capacity. With virtually no oil hedges, these high prices are translating into record cash flow for our shareholders.
"I now expect Talisman to generate about $4.4 billion in cash flow for 2005, or approximately $12 per share based on an average US$55/bbl WTI oil price, US$7.50/mmbtu NYMEX gas price and an 80 cent Canadian dollar in the second half of the year."
Talisman Second Quarter Summary
- In North America, the Company drilled 56 successful gas wells and 31 oil wells (99% success rate).
- In Appalachia, the Drumm #1 well came on production in July at an initial rate of 10 mmcf/d.
- Two deep wells are currently being drilled at Monkman.
- In Norway, a successful development well was completed in the Varg field, commencing oil production at 5,000 bbls/d in addition to a successful water injector.
- At Gyda in Norway, the A31 well was completed and commenced oil production at a constrained rate of 6,000 bbls/d.
- The Tweedsmuir project in the North Sea is on schedule with the first development well completed during the quarter. A second well is nearing total depth. First production for the project is expected in early 2007.
- Offshore Malaysia and Vietnam, the Company was granted additional acreage adjacent to Block PM3-CAA.
- Development drilling was completed at South Angsi in Malaysia. The topsides were installed on the platform and first production is expected in early August.
- In Vietnam, a wholly owned Talisman subsidiary signed a Petroleum Contract for a 60% interest in Block 15-2/01.
- In Indonesia, gas production increased by 30% (from a year earlier) to 177 mmcf/d.
- Expansion of the Corridor facilities and the pipeline to West Java are on schedule for production in the first quarter of 2007.
- In Trinidad, site preparation is underway for Talisman's first onshore well (expected to spud in the third quarter).
- In Qatar, the Company expects to spud its first exploration well in the fourth quarter.
- Exploration wells drilling in Colombia and Peru are close to total depth and results should be known this quarter.
- Talisman increased its semi-annual dividend by 13.33% to seventeen cents (C$0.17) per share. |
