Talisman shares slip after corporate revamp

By Scott Haggett

CALGARY, Alberta (Reuters) - Talisman Energy Inc (TLM.TO: Quote) shares slipped on Wednesday, a day after the company announced a major revamp of its global oil and gas exploration business and a C$2 billion ($2.04 billion) asset sale.

The company's shares shed 48 Canadian cents to C$24.42 on the Toronto Stock Exchange after Chief Executive John Manzoni unveiled a long-awaited strategic review that will see Canada's No. 3 oil explorer hone its assets and boost spending in promising regions to raise production.

While the changes, which will see the company shed up to 45,000 barrels of daily production while wresting growth from properties in Canada, Norway and Southeast Asia, were welcomed by analysts, it will be 18 months before Manzoni's program will bear fruit.

"The real growth isn't going to happen until 2010," said Alan Knowles, an analyst at Haywood Securities. "There's a lot of good things happening but the timing is not immediate, unfortunately."

Manzoni is moving to restore Talisman's credibility with investors after the company missed a number of financial and operating targets. Its shares have lagged those of its peers as its efforts to boost output through acquisitions have fallen short.

Now the company will walk away from its more unprofitable holdings as it looks to raise natural gas output from unconventional fields in North America and hunts for big fields in areas such as Norway, Indonesia and Vietnam.

"Most of our business is based in our three main operating areas, Asia, the North Sea and here in North America," Manzoni said at an investor briefing in New York on Wednesday. "But we also (operate) in several other places, some of which do not have visible growth in the future and which we can therefore exit."

Talisman will sell off holdings in Trinidad and Tobago as well as the Netherlands and Denmark. It will keep production from the British North Sea flat at about 100,000 barrels a day, using the cash from its profitable operations there to fund drilling elsewhere.