Canada Stockwatch – Shrinking Oil Prices Force Energy Firms To Cut Jobs

Canada Stockwatch – Canadian oil and gas exploration and production company Talisman Energy Inc. (TSE:TLM, Mkt cap 10.22B, P/E  – , Div/yield 0.08/3.16, EPS -1.15, Shares 1.03B) has admitted vulnerability to the low commodity prices in the industry, announcing that hundreds of its employees would be laid off this week.

Canada Stockwatch talisman energy TLM

Canada Stockwatch – Talisman is vulnerable to the low commodity prices.

As the Financial Post reports, Talisman was not the only Calgary-based energy firm to announce a jobs cut, with Nexen Energy ULC also reporting it has been forced to axe a significant proportion of its Canadian headcount.

Talisman, whose shareholders approved an $8.3 billion acquisition offer from Repsol SA this year, said 10% to 15% of its employees and contractors would be axed this week, or about 150 to 200 of 1,300 Calgary head-office jobs that support its global operations.

Nexen, a subsidiary of China’s CNOOC Ltd., said it will be cutting 400 jobs – 300 which of will be in Calgary, with the losses representing 14.5% of the company’s total Canadian employees.

Fang Zhi, CEO at Nexen, offered some insight into why a number of energy firms have deemed job cuts necessary, stressing that “long-term viability and sustainability” is what led its decision.

“While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program,” he said.

“We take these decisions seriously, and all impacted employees have been treated fairly and with respect.”

Oil prices have tumbled by more than 50% since June and have recently resumed their descent, with layoffs at some of the major energy sector players becoming something of a common occurrence.

Shannon Bowen-Smed, CEO of Bowen Workforce Solutions, a Calgary-based recruitment and placement firm, told the FP “with absolute certainty” that there will be more “fairly sizable” job cuts in the next couple of days as the sector tries to regain a more stable footing amid the falling oil prices.

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Talisman Energy Looks Set To Bow Out With A Loss

Shareholders of Talisman Energy Inc. (TSE:TLM, Mkt cap 9.82B, P/E – , Div/yield 0.08/3.26, EPS -0.41, Shares 1.04B) will gather tomorrow to vote on whether the company should be sold to Repsol S.A., and its year-end report has only strengthened the confidence of observers that a deal will be done.

Talisman Energy Bow Out LossAs the Calgary Herald reports, the oil and gas exploration and production firm posted a fourth-quarter net loss of $1.59 billion, prompting the board to stress how the last three months is not entirely representative of 2014 as a whole.

Hal Kvisle, president and chief executive, said in a news release: "Our 2014 results reflect the significant progress we made throughout the year to improve the reliability and predictability of our company."

However, this positive spin is not expected to deter shareholders from agreeing a deal to part with their shares – at US$8 per share – to Madrid-based Repsol.

Talisman reported after-tax impairments of $1.37 billion from the fourth quarter, which includes the $287 million in remaining goodwill related to its North Sea assets and all of the $234 million it carries related to Block K44 in Kurdistan (an asset it shares with Calgary junior WesternZagros Resources Ltd).

It also absorbed partial writedowns of its investment in the Texas Eagle Ford of $614 million and Equion Energia Ltd., a Colombian joint venture with Ecopetrol S.A., of $133 million, as it aligned the value of its reserves alongside lower oil price expectations.

The company reported a fourth-quarter loss from operations of $143 million, which represents a considerable comedown from $48 million profit in the third quarter. For the 12 months, Talisman recorded a loss from operations of $25 million compared to a loss from operations of $248 million in 2013.

Kvisle said the sale to Repsol, which is forecast to be finalized sometime before June, is good news for both companies.

"Talisman's assets and people will have an important place in the combined enterprise, as we will roughly double Repsol's upstream business," he added.

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Stockwatch – Talisman Energy Reports Better-Than-Expected Quarterly Results

Stockwatch – Canadian oil producer Talisman Energy Inc. (TSE:TLM, Mkt cap 6.72B, P/E – , Div/yield 0.08/4.71, EPS -0.37, Shares 1.04B) has announced quarterly profits that have exceeded predictions, which will come as some relief after a turbulent 12 months.

Stockwatch Talisman Energy Better-Than-Expected Quarterly Results

Stockwatch – Talisman Energy Reports Better-Than-Expected Quarterly Results

Talisman shares have nearly halved in the past year, with weak oil and gas prices weighing the company down, but its figures for the third quarter ended September 30 suggest it is beginning to get back on track.

Talisman, which is reorganizing operations and selling assets to boost its share price, has managed to cut its capital budget for the year to about US$3 billion from US$3.2 billion.

It boasted earnings of US$425 million, or 38 cents per share, in the quarter, which is a recovery from a loss of US$5 million, or 8 cents per share, a year earlier.

However, cash flow dropped 11.5% to US$507 million, or 49 cents per share, in the three-month period, and it is feared that cash flow could take a further hit in the fourth quarter.

The Calgary-based firm has found itself on the wrong end of a global slide in crude prices, which have slipped by roughly 25% since touching a high of US$115 in June, said to be a result of excess supply and weak demand.

Excluding the gain on commodity derivatives and other items, profit was 5 cents per share, above analysts’ average estimate of 2 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue and other income came down by nearly 8.7% to US$1.14 billion, missing the average analyst estimate of US$1.4 billion.

In an attempt to further offset tumbling oil prices, Talisman is aiming to sell US$2 billion in assets by mid-2015 – a target which chief executive Hal Kvisle said is looking increasingly achievable.

Stockwatch – Talisman’s net income grew year over year last quarter from a loss of $0.98 per share to a gain of $0.41.

 

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Stockwatch – Talisman Reports $237M Second Quarter Net Loss

Calgary-based oil and gas company Talisman Energy Inc. (TSE:TLM, Mkt cap 11.73B, P/E – , Div/yield 0.07/2.59, EPS -0.86, Shares 1.04B) has disclosed its financial results for the second quarter of this year, reporting a net loss of $237 million ($0.23 per share), compared to a net profit of $97 million the same period last year. According to the announcement, the loss was mainly due to a $171 million movement concerning cash settlements as well as non-cash mark-to-market loss on commodity derivatives.

Stockwatch Talisman Energy North Sea Transocean Winner

Stockwatch – Talisman reports Q2 loss of $237 million

What also contributed to the net income loss is Talisman’s lowered credit adjusted discount rate being applied to its asset retirement obligation liabilities across its portfolio by 100 basis points. The move resulted in an after-tax impairment of $50 million in the UK and a further $12 million in Norway.

Quarterly loss from operations amounts to $9 million on a non-GAAP basis, against earnings from operations in the amount of $79 million int the first first quarter. Lower gas prices in North America were the main reason behind the loss.

The company’s net debt for in the second quarter stood at about $ 4.2 billion, rising from around $3.8 billion in the preceding quarter.

Talisman recorded cash flow of $567 million for the second quarter, marking an 8% increase year-over-year and an 8% decrease compared to the previous quarter.

The second quarter saw total production averaging 375,000 barrels of oil equivalent per day (boe/d). This marked an increase of 4% year-over-year. Production from ongoing operations averaged 364,000 boe/d, registering a 12% increase year-over-year and a 3% increase from the first quarter of 2014.

The company’s total revenue reached $1.24 billion in the second quarter, up from $1.2 billion a year ago. But Talisman’s total expenses rose too, hitting 1.4 billion, while for the first quarter they stood at 953 million.

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Stockwatch – Talisman Confirms Interest From Repsol, Posts Q2 Loss

Stockwatch – Last week, Calgary-based global upstream oil and gas company Talisman Energy Inc. confirmed that it had been approached by Madrid-based global energy company Repsol S.A. No deal has been agreed as of yet.

Stockwatch – Breaking news: Talisman Energy Inc posts surprise second-quarter net loss of $237-million

The news came soon after Repsol announced that it was looking into ways to beef up its business through possible acquisitions. And in recent months, Talisman has come up in connection with these plans.

Talisman Energy North Sea Transocean Winner

Talisman Energy Confirms Interest From Repsol

Talisman has already established a presence in North America, southeast Asia, the North Sea and Colombia. The company has been viewed as a takeover target for some time now.

However, separate parts of Talisman are considered more lucrative than the whole company, Reuters commented. On the one hand, it operates some incredibly desirable petroleum areas – such as the Eagleford shales in Texas, the Marcellus shale region in the US Northeast, and Western Canada’s Duvernay and Montney shales. While on the other hand, its North Sea assets aren’t that attractive – they’ve been missing production targets on a regular basis, becoming a burden on the company’s stock.

Talisman’s stock reached C$11.97 on the Toronto Stock Exchange after the announcement, marking a rise of 13%.

Stockwatch – Talisman Energy Inc. (TSE:TLM, Mkt cap 12.24B, P/E – , Div/yield 0.07/2.48, EPS -0.54, Shares 1.04B)

Banking and industry sources told Reuters back in January that France-based natural gas and electricity supplier GDF Suez PA also had aspirations to acquire Talisman and filed an offer for the company late last year. However, the two companies failed to reach an agreement, the insiders said at that time. Later GDF Suez denied having any such plans.

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