Talisman Energy says has no immediate plans to split in two

Wed Nov 6, 2013 2:19pm EST
 
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By Scott Haggett and Swetha Gopinath

CALGARY, Alberta (Reuters) - Talisman Energy Inc TLM.TO said it had no immediate plans to split itself in two despite pressure from activist shareholders looking to boost returns from the restructuring Canadian oil company.

Talisman, which reported a narrower third-quarter loss on Wednesday, said it had examined the idea of separating its operations in the Americas and Asia, an idea touted by some investors for years, but concluded the time is not right for the move.

"While we do see the benefit of two highly focused companies, splitting the company is only valid if the two companies that arise from the split are strong and viable stand-alone entities" Hal Kvisle, the company's chief executive, said on a conference call. "A split, or a variation like a spinout of one part of our business, would be challenging to execute today, given a number of constraints associated with our credit ratings, North Sea obligations, and other tax, legal, and cost considerations."

Talisman, a chronic underperformer now restructuring its operations in order to lower costs and boost its share price, has been in the spotlight since early October, when activist investor Carl Icahn revealed he'd taken a 6 percent stake in the company.

Kvisle said the company has met with Icahn and other activist shareholders over the past year and is sticking with its plan to restructure operations by focusing on the Americas and Asia, selling its Norwegian North Sea assets and limiting the amount it spends on its UK North Sea properties.

"We're intrigued that people see Talisman as an interesting situation in that way, but we do caution people that this is not an instantaneous 90-day turnaround," he said. "This is a pretty capital-intensive industry and it takes some time to move the corporation and move the needle, and we're just discussing those things with them."

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Talisman also said it has revisited plans to sell its properties in the northern portion of the Duvernay shale field in central Alberta after a search for a buyer came up short.   Continued...

 
President and Chief Executive of Talisman Energy Hal Kvisle addresses shareholders during the company's annual general meeting in Calgary, Alberta, May 1, 2013. REUTERS/Todd Korol