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Talisman Cuts Workforce in Move to Unconventional Gas

December 7, 2009
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Calgary's Talisman Energy Inc. last week laid off 220 people, or 15% of its workforce in North America, as it restructures its natural gas business from conventional to unconventional.

Most of the job losses were in Calgary, said spokesperson Phoebe Buckland. She said it was "tough" for Talisman, but noted that the company is changing. Most of the layoffs were in the Calgary headquarters office, where 128 people were laid off.

Talisman last month substantially increased its holdings in the Marcellus Shale in Pennsylvania and in the Montney Shale of British Columbia to ready an increase in its unconventional gas development programs in 2010 (see NGI, Nov. 9).

The producer has opened an office in Pittsburgh to manage the growth of its U.S. shale development programs and to be closer to most of its activity. Talisman also is keeping a field office in Horseheads, NY.

Talisman restructured its operations into two businesses, "Shale" and "Conventional." Jim Fraser, who has headed Talisman's Marcellus program, was put in charge of the Shale unit while Jonathan Wright, who was leading Talisman's business in Malaysia, now runs the company's Conventional operations.

Through a combination of land acquisitions (at an average cost of US$3,250/acre) and land swaps, Talisman this year has added more than 90,000 acres in the Pennsylvania portion of the shale and currently holds 214,000 net acres in the Pennsylvania portion of the play. Most of the leasehold is concentrated around Bradford and Tioga counties in northeastern Pennsylvania.

Talisman's focus in the Montney Shale this year has been in the Greater Groundbirch, Greater Farrell and Greater Cyprus areas. The company plans to complete 20 pilot wells this year, including 11 horizontal wells, moving to commercial development at the beginning of next year.

The producer began this year with 178,000 acres in the Montney Shale and has added more than 80,000 acres at an average cost C$3,500/acre, doubling its acreage to what it considers to be the sweet spot of 166,000 acres. Talisman said it believes it has about 3,000 net well locations on its acreage. The company now has 270,000 net acres in the play.

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