EARNINGS - PART 2 / Talisman Energy Lays Foundations for Growth in 1999
and Beyond
Talisman Energy Inc.
Highlights
Three months ended Nine months ended
September 30 September 30
1998 1997 1998 1997
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Financial
(millions of Canadian
dollars unless otherwise stated)
Cash flow 126.1 169.9 430.9 550.7
Net income (loss) (32.8) 15.6 (25.0) 66.1
Exploration and development
expenditures 247.3 277.6 758.2 662.7
Per common share (dollars)
Cash flow 1.15 1.55 3.92 5.04
Net income (loss) (0.30) 0.14 (0.23) 0.60
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Production
(daily average production)
Oil and liquids (bbls/d)
Canada 54,160 46,716 54,975 45,443
North Sea 57,683 45,832 59,426 47,791
Indonesia 32,468 29,531 31,540 27,737
Synthetic oil 2,518 2,849 2,573 2,437
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Total oil and liquids 146,829 124,928 148,514 123,408
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Natural gas (mmcf/d)
Canada 604 520 615 530
North Sea 83 80 103 95
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Total natural gas 687 600 718 625
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Prices
Oil and liquids ($/bbl)
Canada 15.64 21.24 15.58 22.08
North Sea 18.26 24.80 18.56 25.80
Indonesia 17.60 24.13 17.88 25.49
Synthetic oil 20.77 26.71 21.00 27.90
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Total oil and liquids 17.19 23.35 17.36 24.40
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Natural gas ($/mcf)
Canada 1.88 1.65 1.90 1.88
North Sea 4.06 3.92 3.95 3.93
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Total natural gas 2.14 1.96 2.19 2.19
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Talisman Energy Inc.
Consolidated Balance Sheets
September 30 December 31
(millions of Canadian dollars) 1998 1997
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Assets
Current
Cash $ 1.9 $ 7.1
Accounts receivable 363.1 403.9
Inventories 50.6 43.9
Prepaid expenses 13.3 15.8
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428.9 470.7
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Deferred pension costs 55.9 47.7
Other assets 196.1 71.5
Property, plant and equipment 4,691.7 4,441.0
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4,943.7 4,560.2
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Total assets $ 5,372.6 $ 5,030.9
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Liabilities
Current
Accounts payable and accrued
liabilities $ 421.4 $ 449.7
Income and other taxes payable 59.4 47.6
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480.8 497.3
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Deferred credits 25.4 23.2
Provision for future site restoration 179.1 144.2
Long-term debt 2,082.8 1,738.8
Deferred taxes 434.4 440.8
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2,721.7 2,347.0
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Shareholders' equity
Share capital and contributed surplus 1,887.6 1,879.1
Retained earnings 282.5 307.5
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2,170.1 2,186.6
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Total liabilities and shareholders' equity $ 5,372.6 $ 5,030.9
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Interim statements are not independently audited.
Talisman Energy Inc.
Consolidated Statements of Income
Three months ended Nine months ended
(millions of Canadian dollars September 30 September 30
except per share amounts) 1998 1997 1998 1997
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Revenue
Gross sales $ 367.1 $ 375.9 $ 1,133.1 $ 1,196.6
Less royalties 52.9 66.9 160.9 227.5
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Net sales 314.2 309.0 972.2 969.1
Other 12.6 10.4 34.0 28.1
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Total revenue 326.8 319.4 1,006.2 997.2
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Expenses
Operating 139.1 113.0 410.1 324.8
General and administrative 12.1 13.2 48.3 42.0
Depreciation, depletion and
amortization 140.5 129.3 441.4 376.5
Dry hole 22.8 10.6 52.3 22.8
Exploration 23.1 13.9 63.3 52.9
Interest on long-term debt 22.5 10.6 62.7 31.6
Other 9.9 (8.3) (82.2) (22.6)
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Total expenses 370.0 282.3 995.9 828.0
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Income (loss) before taxes (43.2) 37.1 10.3 169.2
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Taxes
Current income tax 12.1 13.2 30.5 38.5
Deferred income tax
(recovery) (27.7) 4.0 (15.0) 42.5
Petroleum revenue tax 5.2 4.3 19.8 22.1
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(10.4) 21.5 35.3 103.1
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Net income (loss) $ (32.8) $ 15.6 $ (25.0) $ 66.1
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Net income (loss) per share $ (0.30) $ 0.14 $ (0.23) $ 0.60
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Average number of common shares
outstanding (millions) 110.0 109.5 109.8 109.4
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Talisman Energy Inc.
Consolidated Statements of Cash Flows
Three months ended Nine months ended
September 30 September 30
(millions of Canadian dollars) 1998 1997 1998 1997
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Operating
Net income (loss) $ (32.8) $ 15.6 $ (25.0) $ 66.1
Items not involving a
current cash flow 135.8 140.4 392.6 431.7
Exploration 23.1 13.9 63.3 52.9
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Cash flow 126.1 169.9 430.9 550.7
Changes in non-cash working
capital 20.9 14.9 41.9 26.3
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Cash provided by operating
activities 147.0 184.8 472.8 577.0
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Investing
Capital expenditures
Exploration, development
and corporate (251.4) (283.0) (767.8) (671.3)
Acquisitions (52.1) (34.1) (90.0) (64.0)
Proceeds of disposition
Resource properties 44.6 6.4 186.2 19.8
Investments - (0.1) - 164.6
Investments - - - (146.6)
Increase in other assets (71.1) - (71.1) (25.3)
Changes in non-cash working
capital 14.0 40.9 (29.3) 29.2
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Cash used in investing
activities (316.0) (269.9) (772.0) (693.6)
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Financing
Long-term debt repaid (64.5) (229.2) (268.2) (390.7)
Long-term debt issued 229.4 308.7 553.0 501.7
Common shares issued 1.3 2.2 8.5 12.1
Deferred credits and other (1.1) 3.6 (0.1) (3.4)
Increase in site restoration
provision on acquisition - 1.4 - 13.7
Changes in non-cash working
capital (1.3) - 0.8 -
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Cash provided by financing
activities 163.8 86.7 294.0 133.4
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Net increase (decrease) in cash (5.2) 1.6 (5.2) 16.8
Cash, beginning of period 7.1 56.3 7.1 41.1
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Cash, end of period $ 1.9 $ 57.9 $ 1.9 $ 57.9
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Talisman Energy Inc.
Product Netbacks
Three months ended Nine months ended
September 30 September 30
1998 1997 1998 1997
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Canada
Oil and liquids ($/bbl)
Sales price 15.64 21.24 15.58 22.08
Royalties (3.13) (4.96) (3.17) (5.42)
Operating costs (3.61) (3.90) (3.50) (3.57)
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8.90 12.38 8.91 13.09
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Natural gas ($/mcf)
Sales price 1.88 1.65 1.90 1.88
Royalties (0.29) (0.26) (0.28) (0.33)
Operating costs (0.51) (0.49) (0.49) (0.46)
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1.08 0.90 1.13 1.09
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North Sea
Oil and liquids ($/bbl)
Sales price 18.26 24.80 18.56 25.80
Royalties (0.26) (1.35) (0.48) (1.41)
Operating costs (11.96) (10.66) (11.61) (9.96)
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6.04 12.79 6.47 14.43
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Natural gas ($/mcf)
Sales price 4.06 3.92 3.95 3.93
Royalties (0.03) (0.18) (0.05) (0.16)
Operating costs (1.33) (0.96) (0.95) (0.89)
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2.70 2.78 2.95 2.88
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Indonesia
Oil and liquids ($/bbl)
Sales price 17.60 24.13 17.88 25.49
Royalties (6.51) (9.26) (6.50) (11.41)
Operating costs (4.22) (5.66) (4.54) (5.76)
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6.87 9.21 6.84 8.32
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Total Company
Oil and liquids ($/bbl)
Sales price 17.12 23.28 17.29 24.33
Royalties (2.74) (4.64) (2.79) (5.21)
Operating costs (7.10) (6.79) (7.01) (6.54)
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7.28 11.85 7.49 12.58
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Natural gas ($/mcf)
Sales price 2.14 1.96 2.19 2.19
Royalties (0.26) (0.25) (0.25) (0.31)
Operating costs (0.60) (0.55) (0.56) (0.52)
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1.28 1.16 1.38 1.36
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Netbacks do not include synthetic oil or pipeline operations.
Talisman Energy Inc.
Consolidated Financial Ratios
The following financial ratios are provided in connection with the
Company's continuous offering of medium term notes pursuant to the short form
prospectus dated May 1, 1998 and a prospectus supplement dated May 8, 1998.
The asset coverage ratios are calculated as at September 30, 1998.
The interest coverage ratios are for the 12 month period then ended.
September 30
1998
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Interest coverage (times)
Income 0.80 (1)
Cash flow 6.23 (2)
Asset coverage (times)
Before deduction of deferred income taxes and
deferred credits 2.35 (3)
After deduction of deferred income taxes and
deferred credits 2.04 (4)
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>>
(1) Net income plus income taxes and interest expense;
divided by interest expense and capitalized interest.
(2) Cash flow plus current income taxes and interest expense;
divided by interest expense and capitalized interest.
(3) Total assets minus current liabilities; divided by long-term debt.
(4) Total assets minus current liabilities and long-term liabilities
excluding long-term debt; divided by long-term debt.
This release is available on Talisman's Internet Web Site:
WWW.TALISMAN-ENERGY.COM
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