Former TransCanada Corp. CEO Hal Kvisle was tapped last week to take over at Talisman Energy Inc. after CEO John A. Manzoni agreed to step down. The former BP plc executive, had led the company for the past five years (see NGI, June 4, 2007).

Under Manzoni’s direction, Calgary-based Talisman in recent years had become more focused on North American unconventional natural gas, including entry and expansion into the Montney and Duvernay shales in Canada and the U.S. Marcellus, Utica and Eagle Ford shales (see NGI, Feb. 21, 2011; Aug. 4, 2008). The U.S. unit is one of the top producers in Pennsylvania’s Marcellus Shale (see NGI, Aug. 27).

The move toward more unconventional development has come in fits and starts, however. Early this year Talisman cut its capital spending in North American dry gas plays to direct more money to oil and liquids development (see NGI, Jan. 16). In early summer the company abandoned a project being considered with Sasol Canada to develop Canada’s first gas-to-liquids (GTL) facility to create transportation fuels from natural gas (see NGI, July 2).

“John has made a significant contribution to Talisman since he joined the company in 2007,” said Talisman Chairman Chuck Williamson of Manzoni. “Since that time, Talisman successfully entered the unconventional business, establishing a substantial presence in some of the best shale plays in North America. In addition, his focus on investing in and developing core capabilities will serve Talisman well in the future.”

Kvisle was president and CEO of TransCanada until he retired in 2010, and he is a long-time director at Talisman.

“Hal has distinguished himself as a visionary chief executive and thought leader in Canada throughout his career,” said Williamson. “We are very fortunate to have him now lead Talisman. Combined with Talisman’s strong management team, Hal will provide a strong focus on operational excellence and project delivery.”

Manzoni’s departure was unexpected, wrote energy analysts at Tudor, Pickering, Holt & Co. “Color us surprised,” they wrote Monday. However, “frustration with leadership has been a key shareholder issue over the last year and recent rumors of shareholder activism [are] likely to remain front and center with this change.”

For 2Q2012 Talisman reported that cash flow fell 10% year/year to US$803 million. Net income in the period totaled $196 million, versus $698 million in the year-ago quarter. Total production in 2Q2012 was 435,000 boe/d, an increase of 4% over 2Q2011, which Talisman attributed to higher oil and natural gas volumes in North American shale and in Southeast Asia. Eagle Ford Shale output averaged 13,800 boe/d, up from 2,700 boe/d a year earlier.

Rumors have been circulating for months that Talisman was a takeover target. Manzoni’s departure last week fueled that speculation.

“It clears the way, because what I think it really signals is a focus on operations,” said John Stephenson, portfolio manager of First Asset Investment Management Inc., whose firm manages Talisman shares. Talisman is the “next likely big candidate” for an Asian energy company because its shares are “cheap” and assets are “not core” to Canada’s capital markets, which might mean an easier path to regulatory approval by Canadian officials.

Talisman plans to evaluate some asset sales and joint ventures, but selling the company is not an option now being considered, said Kvisle. “I am not looking at external opportunities, the board is not looking at them, all of our focus right now is on making Talisman a better performer by rationalizing assets and playing more to the strengths of the organization,” the new CEO told reporters.

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