CALGARY, ALBERTA -- (Marketwired) -- 05/01/13 -- Talisman Energy Inc. (TSX: TLM) (NYSE: TLM) has reported its operating and financial results for the first quarter of 2013. All values in this release are in US$ unless otherwise stated.
Effective January 1, 2013, Talisman adopted new rules under IFRS for investments in its UK and Equion joint ventures. The after tax operating results of these joint ventures are now disclosed as a single line "income (loss) from joint ventures and associates." For more information, please see notes 4 and 8 to the company's Financial Statements and the Adoption of New Accounting Standards section in the interim MD&A. For comparative purposes, Talisman has included non-GAAP figures in this press release, which include results from the UK and Equion joint ventures.
2013 First Quarter Overview
-- Production was 372,000 boe/d, relatively flat versus the fourth quarter, after adjusting for the sale of a 49% equity interest in Talisman's UK North Sea business in December 2012. The 2013 production guidance range is unchanged, with liquids volumes expected to rise in the second half of 2013 in North America (Eagle Ford), Colombia, Malaysia (Kinabalu) and Vietnam (HST/HSD).-- Cash flow(1) was $517 million, down from the fourth quarter largely as a result of the UK transaction, lower production and netbacks in North America and higher royalties in Asia. The company expects to meet its 2013 cash flow guidance, based on growth in higher margin liquids production in the second half of the year.-- The company recorded a net loss of $213 million in the quarter, compared to net income of $376 million in the fourth quarter. This was due to significant gains recorded in the previous quarter on the sale of a 49% equity interest in its UK North Sea business, and the revaluation of Talisman's interest in the Ocensa pipeline.-- Capital spending(1) during the quarter averaged $775 million, down approximately 25% compared to both the prior year and the fourth quarter. Talisman has set its 2013 capital budget at approximately $3 billion, with 90% of spending directed at high netback liquids and international gas opportunities.-- In Colombia, the company successfully completed the Akacias-18 well, the first of a seven-well, two-rig appraisal program in the heavy oil Block CPO-9. The company plans to bring in a third rig later this year to drill an exploration well.-- The Kurdamir-3 appraisal well is currently drilling in Kurdistan. The 3D seismic acquisition program over the Topkhana and Kurdamir blocks is proceeding.
(1) The terms "cash flow" and "capital spending" are non-GAAP measures. Please see the advisories and reconciliations elsewhere in this news release.
"Talisman set out four strategic priorities last October, which we have translated into goals for 2013. As I discussed at our investor open house in March, we are transforming Talisman, with a strong focus on two core regions: the Americas and Asia-Pacific," said Hal Kvisle, President and CEO.
"We have stabilized our financial position and constrained capital spending to live within our means. We are more focused, having completed the sale of a 49% equity interest in our UK business. Nearly 90% of our assets are now in the Americas and Asia-Pacific core regions. We are taking steps to exit a number of non-core countries, and actively working to unlock $2-3 billion in net asset value through sales or joint ventures. We expect to see significant growth in higher margin liquids production in the second half of this year and into 2014. And finally, we are taking steps to improve operating efficiency and lower costs.