Talisman Reveals 2001 Cap Spending Program
With the cry for increased natural gas production being heard
across the North America, it's no wonder that exploration and
production companies such as Calgary-based Talisman Energy are
upping their capital expenditure programs to try and meet demand.
The company announced last week it will boost its exploration and
development budget by 44% over year 2000 levels to C$1.7 billion.
The company expects to produce on average between 430,000 and
450,000 boe/d, up from 2000's output of approximately 410,000
boe/d. Talisman forecasts that domestic gas production will be
almost 800 MMcf/d due to production increases from the Alberta
Foothills, Central Alberta and West Whitecourt. The producer warns
there will be a decrease from in output from the North Sea due to
asset sales completed in late 2000.
"Over the past five years, we have grown production per share by
about 10% annually and expect a comparable number in 2001," said
Dr. Jim Buckee, CEO of Talisman. "Cash flow in 2000 was over
C$17/share and we could see in excess of C$18/share this year
assuming US$4.50 NYMEX gas, $24 WTI oil prices and a continuation
of our share buyback program throughout the year. I see no shortage
of opportunities for Talisman, but we will not let the glitter of
high prices distract our emphasis on value at mid-cycle."
Talisman said it expects production to rise by 5-10% in 2001,
based only on existing projects. Of the company's 2000 production,
about 47% was in Canada, 32% in the North Sea and 21% split between
Indonesia and Sudan.
With 32% of the 2001 budget focused on development, and 16%
dedicated to exploration, almost half of the spending will go
towards drilling endeavors. Talisman said it expects to participate
in 850 wells worldwide this year, 650 of those in Canada. The north
country producer says three quarters of the allotted budget for
Canadian projects will be used for natural gas interests, with the
remaining quarter going to oil.
Tailsman said it uses both physical contracts and financial
instruments to mitigate oil and gas commodity risk. Almost 19% of
2001 Canadian gas volumes are fixed at an average price of about
C$2.76 per Mcf, falling to approximately 12% in 2002 at an average
price of C$3.10 per Mcf.
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