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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