(Reuters) - Talisman Energy Inc TLM.TO reported a first-quarter profit on higher production of oil and natural gas liquids from North American shales and Southeast Asia, but cut its full-year budget by 10 percent as gas prices remain weak.
The Canadian oil and gas producer, which reported a loss in the year-earlier quarter, has been adding wells in shale fields in Canada and the United States, particularly in Eagle Ford of Texas, where it has a tie-up with Norway’s Statoil STL.OL.
Talisman, like Chesapeake Energy Corp (CHK.N), Encana Corp (ECA.TO) and Progress Energy Resources Corp (PRQ.TO), has been cutting back on dry gas drilling as prices for the fuel fell 40 percent in January-March from a year ago.
Talisman lowered its 2012 budget to about $3.6 billion, and said production would be little changed from the prior year. It had earlier forecast a flat to 5 percent growth.
The company will strip out the Yme oilfield in the Norwegian North Sea from its forward production projections and will write down $248 million of the carrying value of the project, which has been facing construction delays.
CEO John Manzoni told Reuters earlier this year that the company-operated Yme field, in which Polish refiner Lotos LTOS.WA holds 20 percent stake, could remain offline throughout 2012.
In the first quarter, Talisman earned $291 million, or 28 cents per share, compared with a net loss of $326 million, or 32 cents per share, a year earlier.
Earnings from operations rose more than 6 percent to $167 million, or 16 cents per share.
Cash flow — a glimpse into the company’s ability to fund development — rose 5 percent to $851 million, or 83 cents per share.
The company, which is selling about $1 billion in non-core assets in North America, said production rose 4 percent to average 462,000 barrels of oil equivalent per day.
Shares of Talisman were down 2 percent at C$12.69 on Tuesday morning on the Toronto Stock Exchange.
Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Don Sebastian