Talisman Energy Posts Loss, Despite Higher Production; On Track To Meet FY View

(RTTNews) - Talisman Energy Inc. (TLM, TLM.TO) reported Tuesday a net loss in its second quarter on one-time charges that offset revenue growth. In the prior year, Talisman recorded a profit. The Canadian oil and gas company's production was higher from last year and said it remains on track to meet operating and financial targets for 2014.

The company recorded a net loss of $237 million or $0.24 a share in the second quarter of 2014, as against a profit of $97 million or $0.06 a share, in the prior-year period.

The latest results mainly included a $171 million movement relating to cash settlements and non-cash mark-to-market loss on commodity derivatives. Further, the company recorded an after-tax impairment of $50 million in the UK and $12 million in Norway.

On average, 8 analysts polled by Thomson Reuters expected the company to report earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly loss from operations narrowed to $9 million from a $27 million loss a year ago.

Cash flow increased 8% to $567 million, and cash flow per share grew to $0.55 from $0.51 last year.

Cash flow fell 8 percent sequentially, largely due to the impact of the sale of 123 mmcf/d of dry gas production associated with the Montney and Monkman assets, and lower North American gas prices, partially offset by higher liquids volumes.

Total revenue and other income grew to $1.24 billion, from $1.19 billion a year ago. Analysts expected the company to report revenues of $1.33 billion for the quarter.

Total production averaged 375,000 boe/d in the quarter, 4 percent higher than last year.

On a year-over-year basis, the company has grown total production from ongoing operations in its core regions by 12 percent and liquids production by 20 percent. North American liquids production climbed 36 percent.

In North America, Talisman's realized oil and liquids prices were flat, offset by higher realized liquids prices in Western Canada. In Southeast Asia, realized oil and liquids prices were consistent with movements in regional benchmark prices and increased 10 percent year-over-year.

Realized natural gas prices in North America were up 11 percent. In Southeast Asia, realized natural gas prices decreased 2 percent sequentially.

President and CEO Hal Kvisle said, "Our year-over-year performance demonstrates solid progress and underlines the strength of our core regions...Through disciplined capital investment and a focus on operational excellence, we have grown corporate cash flow by 8 percent year-over-year, driven by strong performance in our core regions."

The company has declared a quarterly dividend on common stock of $0.0675 per share, and a quarterly dividend of C$0.2625 per share on preferred shares.

Further, Talisman said it aims to divest $2 billion of long dated, non-core, capital intensive assets over the next 12-18 months. Proceeds from dispositions will be primarily used to maintain a strong balance sheet.

In pre-market activity on the NYSE, Talisman shares were gaining $0.12 or 1.11 percent, and trading at $10.96.