Talisman boosts drilling budget TheStar.com -
Business - Talisman boosts drilling budget
`Very promising start' to its North American unconventional natural gas exploration program
July 30, 2008
CALGARY–Talisman Energy Inc.'s second-quarter profit fell 23 per cent from a year earlier due to higher charges on stock-based compensation and losses on derivative contracts, Canada's third-largest independent oil explorer said yesterday.
Talisman, which is restructuring its assets and selling up to $3 billion of oil and gas properties, earned $426 million, or 42 cents a share, in the quarter ended June 30.
That compares with $550 million, or 53 cents a share, a year earlier when results were boosted by gains.
Stripped of hedging and stock compensation costs, Talisman's earnings from continuing operations increased 167 per cent to $846 million, or 83 cents per share, from $317 million, or 30 cents per share, in 2007.
The operating result surpassed the average forecast of analysts for a profit of 73 cents a share, as the company's oil and gas production grew more than expected.
Talisman has embarked on a strategy to jettison assets in regions where long-term production increases are in question to concentrate on such prospects as unconventional natural gas in North America, where spending is being boosted by half to $1.5 billion this year – and exploration in southeast Asia.
The additional cash for its unconventional program, to boost Talisman's capital spending budget this year to $5.5 billion from its previous $5 billion target, follows what the firm called a "very promising start" to its North American unconventional natural gas program.
Talisman said $2.5 billion of the total has been earmarked for North America, with the bulk of the cash to be spent on unconventional plays.
"We're accelerating our activities in the unconventional business partly in response to actions others are taking and partly on our own accord," CEO John Manzoni said during a conference call yesterday. "The final outcome will depend on how much we accelerate our drilling."
Cash flow, a measure of an oil company's ability to finance its projects, was $1.69 billion, or $1.66 a share, up 43 per cent from $1.18 billion, or $1.13 a share. Revenue grew to $3.16 billion from $1.92 billion.
In the second quarter, the company produced 432,000 barrels of oil equivalent a day, down 4 per cent from the same period in 2007 due to the sale of non-core assets.
From the Star's wire services
Wednesday, July 30, 2008
Talisman boosts drilling budget
Tuesday, July 29, 2008
Wednesday, July 23, 2008
Today's Markets
Gasoline cost pushes up prices
HEATHER SCOFFIELD
Wednesday, July 23, 2008
OTTAWA — Canada's consumer prices were up a huge 3.1 per cent in June compared to a year ago, pushed higher by expensive gasoline, Statistics Canada says.
June's increase was the largest since September, 2005. Excluding gasoline, total inflation was up 1.8 per cent in the past 12 months, Statscan said.
Core inflation, which excludes the most volatile prices, was far more subdued, rising just 1.5 per cent.
Economists had been expecting a big leap in total inflation in June, projection 2.9 per cent year over year, compared to a May rise of 2.2 per cent. For core inflation, economists had forecast 1.6 per cent in June, compared to 1.5 per cent in May.
From a month earlier, total inflation rose 0.7 per cent in May, and the core index rose just 0.1 per cent, mainly in line with economists' expectations.
Although the June numbers were slightly higher than projected, and the total inflation number may come across as quite high, economists played down the inflation report, and warned not to get too excited about the spike.
“While headline inflation pushed above 3 per cent for the first time since September, 2005, core inflation remained at 1.5 per cent for the third consecutive month, signalling once again that current inflation fears are overblown and that there is room for the Bank of Canada to reduce rates once again if needed,” economists at Bank of Nova Scotia said in a note to clients.
“While higher headline inflation will feed into core inflation with a lag, a weakening Canadian economy will continue to offset these pressures.”
For the year, the main reason total inflation soared is because gasoline prices were up 26.9 per cent between June, 2007, and June, 2008, Statscan said. That's the biggest surge since the 34.7 per cent leap recorded in September, 2005, after hurricanes Katrina and Rita.
Gasoline prices have risen substantially, but the inflation number seems particularly large because gas prices were falling in June, 2007.
Mortgage interest costs, bakery products and air transportation were also major drivers of the 3.1 per cent annual inflation rate, Statscan said.
Mortgage interest costs were up 9 per cent.
And food costs soared 3 per cent in June compared with a year earlier, led by a 12.3 per cent increase in bakery products. Food prices have been rising sharply around the world, except in Canada, where a strong Canadian dollar, intense competition, and local production kept prices low until now.
“While still relatively mild versus most of the rest of the world, that's a big acceleration from earlier this year when grocery prices were actually down on a year-over-year basis,” commented Douglas Porter, deputy chief economist at BMO Nesbitt Burns.
Air transportation prices rose 14.3 per cent, the largest increase since May, 2002, as carriers pass along higher fuel costs to their customers. Overseas flights saw the largest increases.
A few falling prices helped mitigate the overall rise in inflation. Vehicles fell 8.4 per cent year-over-year, and computer equipment dropped 13.2 per cent. Clothing and footwear prices fell 0.6 per cent – but that's not as big a drop as usual for June, Mr. Porter said.
But over all, goods prices rose 2.5 per cent – a much larger leap than usual for this category, which has seen little change whatsoever in prices lately. Services prices rose 3.7 per cent.
By province, Prince Edward Island and Alberta saw the biggest increases, with inflation well over 4 per cent in both provinces, driven by rising energy prices. Excluding energy, Saskatchewan saw the highest inflation rate among the provinces, at 2.6 per cent, mainly because of housing.
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