OTTAWA (dpa-AFX) - Talisman Energy Inc. (TLM, TLM.TO) reported Tuesday a turnaround to profit in its first quarter benefited by disposal gains, lower charges as well as higher volumes, oil prices and Southeast Asian natural gas prices. Adjusted earnings per share missed Street estimates, while top line matched its view.
The Canadian oil and gas producer now expects flat production for fiscal 2012 due to the further reduction of capital in dry gas assets as the North American gas prices continues to be weaker than anticipated.
For its first quarter, net income was $291 million or $0.25 per share, compared to a loss of $326 million or $0.32 per share a year ago.
The latest quarter results were benefited mainly by gain on disposal of $377 million, share-based payments and deferred tax adjustments. Meanwhile, the prior year's results were hurt by unrealized loss on financial instruments of $263 million, charges related to share-based payments and deferred tax adjustments, partly offset by gain on disposal.
Earnings from operations, which excluded items, grew 6% to $167 million or $0.16 per share.
On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.21 per share. Analysts' estimates typically exclude special items.
Cash flow increased 5 percent to $851 million or $0.83 per share.
Total revenue and other income grew to $2.12 billion from $2 billion in the prior year, and sales rose 6 percent to $2.09 billion, in line with Wall Street analysts' consensus estimate.
Production increased 4 percent to 462 thousand barrels oil equivalent per day or boe/d, mainly driven by increased oil and gas volumes in Colombia and Southeast Asia and shale volumes in North America. These were partly offset by lower North Sea production.
In North America, production climbed 17 percent and liquids volumes grew 33 percent. In Southeast Asia, one of the fastest growing natural gas markets in the world, liquids production climbed 36 percent.
Talisman's realized sales price of $65.14/boe was relatively unchanged as higher global oil and liquids and Southeast Asian natural gas prices were offset by lower gas prices in North America.
Looking ahead, the company said it expects lower volumes in the second and third quarters due to the planned maintenance turnarounds. Lower capital spending will impact North American natural gas volumes over the rest of this year.
For fiscal 2012, Talisman Energy now projects underlying production growth at the bottom of production growth guidance range of 0 percent to 5 percent. The actual outcome will depend on the asset disposals it make through the year, it said.
The company earlier had said that it is setting itself up for an increase in liquids production in 2013 and beyond.
In North America, the company said it is shifting focus and expect to grow liquids production to over 60,000 bbls/d by 2015 from approximately 25,000 bbls/d in 2012.
The company, which agreed to sell about $1 billion in non-core assets in North America, said today that it is continuing to look at other options to focus portfolio, including potential dilution of redevelopment projects in the North Sea, and high grading exploration portfolio.
In the U.S., Talisman shares closed Monday's trading at $13.06, down $0.29 or 2.17 percent.
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© 2012 AFX News
