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.
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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