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Gold/Mining/Energy : TLM.TSE Talisman Energy -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (873)	5/4/2000 8:16:00 AM
From: Tomas	Read Replies (1) \| Respond to of 1713

Talisman turns in red-hot first quarter. But stock is still dogged by Sudan concerns Mathew Ingram The Globe & Mail, Thursday, May 4 Calgary -- While a dozen or so protesters and human rights activists milled around outside the Talisman Energy annual meeting in Calgary yesterday, protesting the company's involvement in war-torn Sudan, most of Talisman's supporters appeared to be at home buying stock -- cheered by the 5,000-per-cent increase in earnings the company racked up in the first quarter. If chief executive officer Jim Buckee was looking for some strong numbers going into yesterday's meeting -- to give him something to talk about other than the conflict in Sudan -- he couldn't have wished for anything better than the results Talisman came out with after the market closed on Tuesday. The increase in cash flow and net income looked more like the balance sheet of a jet-fuelled Internet company than that of an oil and gas producer. Talisman made a profit of $206-million in the first quarter, an increase of more than 5,000 per cent from the $4-million it made in the same period last year, and the company's cash flow rose by more than 200 per cent to $571-million. Even in a period where resource companies like PanCanadian and Alberta Energy have already reported huge increases in first-quarter net earnings and cash flow, Talisman's results stand out. Like most of these other oil and gas producers who have been reporting 500-per-cent growth in profits and cash flow, Talisman's numbers look more impressive because they get compared with the first quarter of last year -- like a weightlifter standing next to a 90-pound weakling. Although the natural gas price was fairly robust in the first quarter of last year, things were pretty emaciated on the oil side because the price of crude was in the basement, and it hit the entire industry's results hard. That said, however, Talisman's performance is still fairly impressive. For example, the company's production volumes rose in the first quarter by more than 40 per cent to 400,000 barrels of oil equivalent a day -- making Talisman the country's largest petroleum producer by volume, ahead of even integrated oil and gas giant Imperial Oil. Some of that gain came as a result of last year's acquisition of Rigel Energy, while another big chunk came from Talisman's growth in the North Sea, where the company has been adding new assets and taking more control over some of the existing plays that it has been a partner in for some time. Earlier this week, for example, Talisman acquired some assets from Texaco as well as a controlling interest in several other North Sea plays. Some of the company's healthy production gains, of course, also came from the controversial oil project in Sudan, in which Talisman is a 25-per-cent partner with the Chinese national oil company, the state oil company of Malaysia and the government of Sudan. According to the Calgary-based company, production is now running at about 42,000 barrels a day. The protesters outside the Palliser Hotel in Calgary yesterday, and the human rights groups that have targeted Talisman for the past year, accuse the company of fuelling the decades-old civil war between the North and South in Sudan. They say the oil revenues allow the ruling National Islamic Front to buy more weapons, which it then uses to further brutalize the largely Christian and animist tribes in Southern Sudan. Mr. Buckee, however, appears to be holding fast to the belief that the presence of a Western-based company is on balance a good thing for the troubled country. In an interview on Tuesday, he said that Talisman doesn't want to sell its stake in part because "it is a great project, and there is more potential yet," but also because "I believe the cumulative impact of the international attention that is happening there is a good thing, and probably the only way to achieve peace in Sudan." Although Mr. Buckee said he would consider an offer to buy Talisman's stake in the Sudan project if someone were to make a serious bid, he said at the moment Talisman is "committed to staying [in Sudan]. We think we can convince our critics . . . we are making strides to fulfill the requirements of the international code [on human rights], and trying to put those ideals into a practical framework." The company recently hired two new human rights and development workers in Khartoum, he said. Talisman's stock has climbed back from its recent lows of about $35 to close yesterday up $2.80 at $48, but there is still probably a substantial discount being applied to the company because of the Sudan project. Given the kind of cash flow that Mr. Buckee said he expects this year -- about $14 a share -- an argument could be made that Talisman's stock should be trading in the $60 range, given its size and diversified asset base. Whether it will ever end up getting there, however, is anybody's guess.