Talisman sees higher production in 2011

Wed May 12, 2010 8:04am EDT
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(Reuters) - Talisman Energy Inc, Canada's No.4 independent oil and gas explorer, said it expects production growth of 5 percent to 10 percent in 2011.

The company, with operations in North Sea, Southeast Asia and North America, said it sees 8 percent to 10 percent annual growth for four to five years from projects in its Southeast Asia portfolio.

"Both Southeast Asia and our North American shale business are now set up to deliver low-cost, long-term growth," Chief Executive John Manzoni said in a statement.

The company, which expects underlying growth from the third quarter of this year going forward, said it is on track to meet its planned exit rate of 250 million cubic feet per day (mmcf/d) to 300 mmcf/d from its Pennsylvania Marcellus shale.

The company, which wants to position itself as a shale-gas producer in North America, expects to spend about C$1.0 billion for the purpose in 2011, down from C$1.6 billion in 2010.

It has also set a production target of 110,000 barrels of oil equivalent per day (boe/d) to 140,000 boe/d in the North Sea for the next 10 years.

The company, which reduced its reserve replacement costs by 40 percent in 2009, said it sees a further 20 percent to 25 percent reduction this year.

Talisman said it has ample flexibility in its shale-gas investments due to relatively low lease retention requirements.

"If the low natural gas price environment persists, Talisman anticipates adjusting its gas directed shale spending in North America down by one-third next year," the company said in a statement.   Continued...