Canadian energy explorer Talisman Energy Inc. (TLM) reported better-than-expected first quarter 2010 results, helped by higher oil prices. Earnings per share from continuing operations, excluding non-operating items, came in at 12 Canadian cents (12 cents), above the Zacks Consensus Estimate of 10 cents.
 
Compared with the corresponding quarter of last year, Talisman’s earnings per share were down 62.5% (from 32 Canadian cents to 12 Canadian cents). The negative comparison reflects higher taxes and an unfavorable exchange rate.
 
Revenue of C$1.8 billion was up 22.0% from the first quarter 2009 level.
 
Volume Analysis
 
Total production during the quarter was down approximately 3.3% from the year-ago level to 435 thousand barrels of oil equivalent per day (MBOE/d), reflecting lower oil volumes on the back of well intervention in the U.K. and natural declines in North America .This was partly offset by increased natural gas volumes. However, production from continuing operations rose 1.0% year over year to 405 MBOE/d.
 
Oil & liquids production during the quarter was down 11.9% to 206,902 barrels per day (Bbl/d), or 48% of total volumes. Volumes in North America, the U.K. and other international regions were down 36.7%, 19.1% and 26.2% to 25,799 Bbl/d, 83,065 Bbl/d and 14,176 Bbl/d, respectively. Oil & liquids production from Scandinavia and Southeast Asia increased 27.0% and 5.9% to 44,302 Bbl/d and 39,560 Bbl/d, respectively.
 
Talisman’s first quarter natural gas volumes were up approximately 6.0% to 1.4 billion cubic feet per day (Bcf/d). Production was down approximately 5.1% to 787 million cubic feet per day (MMcf/d) in North America and 43.3% in the U.K. to 17 MMcf/d. But volumes were up significantly in Scandinavia (from 50 MMcf/d to 91 MMcf/d), while it increased 23.8% in Southeast Asia to 473 MMcf/d.
 
Realized Prices
 
During the quarter, the company’s realized commodity prices were up 29.1% from the year-ago quarter to C$57.02 per barrel of oil equivalent (BOE), reflecting rebounding oil prices across the board.
 
Overall, natural gas prices increased approximately 10.5% year over year to C$6.23 per Mcf. In North America, unit realization rose 5.8% to C$5.83 per Mcf, while Southeast Asia experienced a 30.5% increase in realized prices to C$6.98 per Mcf. Natural gas prices were down 13.0% in the U.K and 39.9% in Scandinavia to C$5.16 per Mcf and C$5.94 per Mcf, respectively.
 
Oil & liquids realizations averaged C$78.70 per barrel, up 46.7% from the year-ago level. Prices realized in North America, U.K., Scandinavia and Southeast Asian regions were C$69.68 per barrel (up 63.4% year over year), C$79.50 per barrel (up 41.1%), C$82.05 per barrel (up 45.2%) and C$79.30 per barrel (up approximately 50.5%), respectively.
 
Acreage Addition
 
Talisman added 37,000 net acres in the Eagle Ford shale play in south Texas and also bought interests in three large shale gas blocks in Poland.
 
Cash Flows & Capital Expenditure
 
Cash flows from continuing operations during the quarter totaled C$766 million, while the company spent C$750 million on exploration and development activities.
 
Balance Sheet
 
As of March 31, 2010, Talisman had cash and cash equivalents of approximately C$1.9 billion and long-term debt of C$3.7 billion (including current portion).
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