Talisman Energy reported its operating and financial results for the third quarter of 2008. Talisman Energy reports record net income of $1.4 billion, cash flow increases 48% to $1.7 billion, production from continuing operations up 10%.
- Cash flow during the quarter was $1.7 billion, an increase of 48% from a year ago and relatively unchanged from the second quarter. Cash flow from continuing operations was also $1.7 billion.
- Net income was a record $1.4 billion, an increase of 305% from a year earlier, driven by increased netbacks, mark-to-market gains on derivative contracts and stock-based compensation recovery.
- Earnings from continuing operations were $731 million, up 189% compared to the third quarter in 2007, driven by increased volumes and higher netbacks.
- Production averaged 443,000 boe/d, 1% above the third quarter of 2007, despite the sale of approximately 40,000 boe/d of non-core assets over the past year. Production was also 3% above the previous quarter.
- Production from continuing operations averaged 435,000 boe/d, 10% above the same quarter last year and 4% higher than the second quarter of 2008.
- Netbacks for the quarter were $56.19/boe, up 60% from a year ago, but below $61.33/boe in the second quarter.
- Net debt at quarter end was $3.7 billion, down from $4.3 billion at December 31, 2007.
- Talisman's unconventional gas strategy is on track, with 210 gross (129 net) wells drilled year-to-date in unconventional plays, including success in Quebec and Pennsylvania.
- The Company continued to focus operations with the agreed sale of non-core interests in the Netherlands.
- Talisman declared a C$0.10 per share dividend, payable on December 31, 2008.
"Talisman delivered another solid quarter," said John A. Manzoni, President & Chief Executive Officer. "Cash flow, at $1.7 billion, was close to the record set in the previous quarter and up 48% compared to a year ago. Production from continuing operations was up 10% year on year. We set a new record for net income in the quarter at $1.4 billion, although roughly one-third of this came from non-cash gains on our derivatives position.
We are making significant progress in the delineation and development of our unconventional resource base in North America and have spent over $1 billion to date, reflecting the impact of accelerated drilling and land purchases.
The Company continues to build a substantial position in several parts of the Montney shale play, among which is one of the best land positions in the Groundbirch area in BC. With approximately 40,000 net acres in this area, we are accelerating our development plans.
Overall, Talisman has drilled more than 200 gross wells in unconventional play areas so far this year. We've also had encouraging early results from our first shale tests in Quebec and Pennsylvania.
The UK North Sea continued to generate substantial amounts of free cash flow during the quarter, with netbacks averaging over $80/boe.
In Malaysia/Vietnam, growth projects are being progressed, with Northern Fields first gas delivered on time during the quarter, and although start up of Song Doc has been slightly delayed, we expect first oil in the next few weeks. Northern Fields first oil remains on track for the first quarter of 2009. Early development plans for the Hai Su Trang and Hai Su Den fields are also moving toward approval. First production from Rev and Yme in Norway remains on track for the announced dates.
We have important exploration wells currently drilling in Kurdistan and Colombia, where we have recently added new acreage. In the fourth quarter, we will spud wells in the UK (Godwin), Norway (TR3) and Qatar (TQ-3).