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(Reuters) - Talisman Energy TLM.TO posted a narrower fourth-quarter loss, helped by higher oil prices, and the company said it expects underlying production growth to be flat to 5 percent higher this year.
Like many of its peers, the company has been looking to develop higher-value liquids-rich gas holdings away from dry gas regions such as Marcellus in the U.S. Northeast and Montney in British Columbia as prices for the fuel plummet to multiyear lows.
U.S. crude oil prices rose 17 percent to average about $92.39 per barrel in the October-December period, while gas prices fell as much 17 percent to average $3.54 per million British thermal unit.
The company said it will cut 2012 exploration and development spending to about $4 billion from $4.5 billion, with most of it directed towards liquids-rich areas such as Eagle Ford and Duvernay shales as well as in Colombia.
Talisman, Canada's No. 6 independent oil explorer by market value, owns acreage in the Eagle Ford prospect in Texas along with Norway's Statoil (STL.OL).
Talisman, which has been talking about cutting its exposure to North Sea that has led to a string of production setbacks, said it remained confident of a 5-10 percent average annual production growth through the medium term.
In the October-December quarter, Talisman posted a loss of $117 million, or 11 cents a share, compared with a year-ago loss of $350 million, or 34 cents a share.
Cash flow, a glimpse into the company's ability to fund operations, rose 25 percent to $824 million, or 81 cents a share.
Total revenue and other income was up 12 percent at $2.06 billion.
Production from ongoing operations during the quarter rose 8 percent to 442 million barrels of oil equivalent per day, but oil production from North Sea fell by a fourth.
Talisman shares, which have lost more than a fourth of their value in the last six months, closed at C$12.52 on Tuesday on the Toronto Stock Exchange.
Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila