Talisman Energy Third Quarter Results

Talisman Energy Third Quarter Results

Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) reported its operating and unaudited financial results for the third quarter of 2014. All values are in US$ unless otherwise stated.
“Our third quarter results highlight our continued focus on improving the financial and operating reliability and performance of our business,” said Hal Kvisle, President and CEO. “Positive drilling results in the Duvernay, Edson, the Friendsville area of the Marcellus and at Akacias in Colombia reflect the strong performance of our core areas. We’ve delivered an impressive ramp-up in production at Kinabalu in Malaysia as a result of facility improvements and successful infill drilling, and recently, we’ve seen indications of positive exploration results at Nueva Esperanza in Block CPO-9 in Colombia and at Red Emperor in Block 136 in Vietnam.
“With three quarters behind us, our performance against our 2014 guidance remains strong. Expected full-year production from ongoing operations is in line with the 350-365 mboe/d range we guided to, despite the sale of 6.5 mboe/d of dry gas production over and above our original guidance target. Our year-to-date capital spending(1) is $2.2 billion reflecting our commitment to focus our capital program, and as a result we are lowering our capital spending guidance from $3.2 billion to approximately $3 billion. Cash flow1 of $1.7 billion for the first nine months of the year is also in line with guidance, but due to lower commodity prices in the fourth quarter, we anticipate lower cash flow in the fourth quarter.”
Third Quarter Highlights:
Total production averaged 353,000 boe/d, with production from Talisman’s core Americas and Asia-Pacific businesses at 323,000 boe/d. Production is down quarter-over-quarter due to planned turnaround activity across the portfolio and the early payout of the carry recovery volumes at HST/HSD in Vietnam.
Total liquids production averaged 135,000 boe/d, down 7% from the previous quarter due to planned turnarounds. In North America, liquids production was 41,000 boe/d, up 11% year-over-year.
Cash flow for the quarter was $507 million, down 11% over the previous quarter primarily as a result of lower commodity prices and lower liquids volumes. This was partially offset by lower royalties and cash taxes. The reduction compared to the second quarter was largely expected due to the turnaround season across our business.
Net income for the quarter was $425 million compared to a net loss of $237 million the previous quarter, mainly driven by mark-to-market gains on commodity derivatives, partially offset by lower commodity prices and lower liquids volumes.
1 The terms “capital spending” and “cash flow” are non-GAAP measures.
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