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November 2014 Investor Presentation – Talisman Energy Inc.

Talisman Energy Inc. · Nov 4, 2014 · 64 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. November 2014 Investor Presentation – Talisman Energy Inc. – slide 1
    CORPORATE PRESENTATION November 2014
  2. November 2014 Investor Presentation – Talisman Energy Inc. – slide 2
    TALISMAN OVERVIEW TALISMAN ? TWO CORE REGIONS OVERVIEW Core: Americas ? ?Right sized? well positioned in 5 basins ? 25% liquids production, grows to 40% by 2018 ? Significant running room ? Generates ~$1 billion cash flow, free cash flow…
  3. November 2014 Investor Presentation – Talisman Energy Inc. – slide 3
    Norway Kurdistan TALISMAN OVERVIEW TWO CORE REGIONS IN PERSPECTIVE ~70% of capital ~90% of cash flow ~90% of 2P value ~90% of production Non core Asia-Pacific Americas Asia-Pacific Americas Non core Non core…
  4. November 2014 Investor Presentation – Talisman Energy Inc. – slide 4
    CORE REGIONS ? GROWING AND LIVING WITHIN MEANS Production mboe/d Capital $ million 0 100 200 300 400 500 2013 5% CAGR 2014 2015 2016 2017 2018 Americas Asia-Pacific 0 1,000 2,000 3,000 4,000 10-12% CAGR 2013 2014…
  5. November 2014 Investor Presentation – Talisman Energy Inc. – slide 5
    BUILDING A SUSTAINABLE BUSINESS IN TWO CORE AREAS ? Marcellus ? Greater Edson ? Chauvin ? Equion ? Eagle Ford ? CPO-9 ? Duvernay ? CPE-6 ? Red Emperor ? Kinabalu ? Jambi Merang ? Sabah ? Sakakemang ? Business Development…
  6. November 2014 Investor Presentation – Talisman Energy Inc. – slide 6
    CORE ASSETS Materiality Cost Structure Competitive Advantage Marcellus Edson Chauvin Eagle Ford Evolving Duvernay Evolving Colombia Evolving Malaysia Indonesia Vietnam
  7. November 2014 Investor Presentation – Talisman Energy Inc. – slide 7
    CATALYSTS FOR NEAR-TERM SUCCESS Colombia 2014/15 Akacias development & Block 9 exploration upside Marcellus 2014 Marcellus midstream divestment Greater Edson 2014/15 Wilrich/Dunvegan appraisal and development Duvernay 2014/15 Duvernay…
  8. November 2014 Investor Presentation – Talisman Energy Inc. – slide 8
    NORTH AMERICA ? HEALTHY BUSINESS UNDERPINNED BY BALANCED PORTFOLIO Dry Gas Marcellus ? Free cash flow positive ? Operational excellence ? Egress secured ? Running room Heavy Oil Chauvin ? Free cash flow positive ? High value…
  9. November 2014 Investor Presentation – Talisman Energy Inc. – slide 9
    0 10 20 30 40 50 60 70 80 Chauvin Eagle Ford 6 4 2 0 Marcellus Greater Edson FOCUSING ON HIGH MARGIN CORE AREAS North America liquids ? Field cash flow margins** $/boe 95% liquids >60% liquids North America gas ? Field…
  10. November 2014 Investor Presentation – Talisman Energy Inc. – slide 10
    NORTH AMERICA ? SELF-FUNDING CAPITAL PROGRAM * Includes results from ongoing operations and assumes 50% joint venture in Duvernay ** Assumes COGEH price deck 0 500 1,000 1,500 2,000 Capital Cash flow** 2013 2014 2015 2016 2017…
  11. November 2014 Investor Presentation – Talisman Energy Inc. – slide 11
    MARCELLUS ? OVERVIEW TLM operated Cabot Chief/Keeton/Radler SWEPI/Ultra Chesapeake/Statoil/ Anadarko Tennessee gas pipeline North Penn gas pipeline Proposed TLM pipeline TLM pipeline TLM compressor station 2014 asset summary…
  12. November 2014 Investor Presentation – Talisman Energy Inc. – slide 12
    MARCELLUS ? LOW RISK, PROFITABLE LONG-TERM UPSIDE ? Sustainable at ~500 mmcf/d for >15 years ? ~6 tcf of 2C contingent resource ? $0.30/mcf field opex, $0.35/mcf transportation ? Half-cycle break-even of $3.25/mcf ? High value…
  13. November 2014 Investor Presentation – Talisman Energy Inc. – slide 13
    OPERATIONAL EXCELLENCE ? PRODUCTION OPTIMIZATION Improvement in volumes 10%
  14. November 2014 Investor Presentation – Talisman Energy Inc. – slide 14
    0 200 400 600 800 1,000 1,200 1,400 0 200 400 600 800 1,000 1,200 1,400 0 200 400 600 800 1,000 1,200 1,400 SIGNIFICANT OPTION VALUE FROM HIGHER PRICES ~450 mmcf/d ($4.00/mcf) ~600 mmcf/d ($5.00/mcf) ~700…
  15. November 2014 Investor Presentation – Talisman Energy Inc. – slide 15
    EAGLE FORD ? OVERVIEW La Salle County Live Oak McMullen County County Talisman operated TLM/STO land Oil Liquids Gas Statoil operated DeWitt County Karnes County 2014 asset summary Production YTD (mboe/d) 34 Gas…
  16. November 2014 Investor Presentation – Talisman Energy Inc. – slide 16
    ? ~60,000 net acres, majority held by production ? Doubled production over last 2 years ? Field opex of $4.70/boe ? Continuous D&C cost improvement Materiality Cost Structure Cost Structure EAGLE FORD ? OPTIMIZING VALUE FROM…
  17. November 2014 Investor Presentation – Talisman Energy Inc. – slide 17
    EAGLE FORD ? FREE CASH FLOW FROM 2016 Production mboe/d 0 10 20 30 40 50 2013 2014 2015 2016 2017 2018 Gas Liquids Sources and uses of cash* $ million 0 200 400 600 800 Capital Cash flow* 2013 2014 2015 2016 2017 2018…
  18. November 2014 Investor Presentation – Talisman Energy Inc. – slide 18
    CHAUVIN ? OVERVIEW 2014 asset summary Production YTD (mboe/d) 11 Production mix (oil %) 95 Land (net acres) >200,000 2P reserves* (mmboe) 36 2P reserve life index (years) 10 2014 guidance FY production (mboe/d) ~10 Capex ($…
  19. November 2014 Investor Presentation – Talisman Energy Inc. – slide 19
    CHAUVIN ? STABLE FREE CASH FLOW GENERATION ? ~900 million boe original oil in place (net) ? ~350 undrilled locations ? High margin per barrel ? ~$150 million of annual free cash flow in 2014 ? Highly focused field operations, control…
  20. November 2014 Investor Presentation – Talisman Energy Inc. – slide 20
    0 50 100 150 200 Capital Cash flow* 9 6 3 0 12 2013 2014 2015 2016 2017 2018 Development/optimization Base CHAUVIN ? LONG-TERM, LOW-RISK ATTRACTIVE CASH FLOW Sources and uses of cash* $ million 2013 2014 2015 2016 2017 2018…
  21. November 2014 Investor Presentation – Talisman Energy Inc. – slide 21
    GREATER EDSON 50 10 15 2012 2014 (e) 2013 Horizontal wells drilled (net) 2014 asset summary Production YTD (mboe/d) 38 Gas (mmcf/d) 171 Liquids (mbbls/d) 11 Land (net acres) ~525,000 2P reserves* (mmboe) 172 2C Contingent…
  22. November 2014 Investor Presentation – Talisman Energy Inc. – slide 22
    LIQUIDS-RICH PRODUCTION AND STRATEGIC INFRASTRUCTURE Materiality Cost Structure Cost Structure Competitive Advantage Competitive Advantage ? ~525,000 net prospective acres ? Multiple prospective horizons: Dunvegan,…
  23. November 2014 Investor Presentation – Talisman Energy Inc. – slide 23
    8 6 4 2 0 0 5 10 15 20 25 30 35 40 45 Months -5% GREATER EDSON WELL ECONOMICS *Assumes deep cut processing at Pembina Saturn Plant Dunvegan Wilrich Falher / Notikewin Wild River type curves mmcf/d Wild River well economics…
  24. November 2014 Investor Presentation – Talisman Energy Inc. – slide 24
    GREATER EDSON ? FREE CASH FLOW GROWTH Sources and uses of cash* $ million Production mboe/d 0 10 20 30 40 50 60 2013 2018 2014 2015 2016 2017 Gas Liquids 0 100 200 300 400 Capital Cash flow* 2013 2014 2015 2016 2017…
  25. November 2014 Investor Presentation – Talisman Energy Inc. – slide 25
    DUVERNAY 2014 asset summary Land (net acres) ~300,000 BE** Prospective resources* (billion boe) 1.8 Drilling locations (net) 2,100 2014 guidance Wells (rig released in 2014) 7 Capex ($ million) ~135 Rigs (average) 1 9 6 3 0 2012…
  26. November 2014 Investor Presentation – Talisman Energy Inc. – slide 26
    A PREMIER SHALE PLAY Materiality Cost Structure Cost Structure Competitive Advantage Competitive Advantage ? ~300,000 net acres (prospective land) ? 1.8 billion boe prospective resource (unrisked) ? Near-term transition to pad…
  27. November 2014 Investor Presentation – Talisman Energy Inc. – slide 27
    >700 Net prospective locations NORTH DUVERNAY ? APPRAISED BY INDUSTRY ACTIVITY IP represents 30 day initial production rate Yield represents separator yields Encana 06-06 Yield ~487 bbls/mmcf Encana 06-06 Yield ~487 bbls/mmcf…
  28. November 2014 Investor Presentation – Talisman Energy Inc. – slide 28
    0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 A B Talisman C D E F G H I MAJOR PLAYER Duvernay top high graded* land holders Gross acres * >20 metres of net pay Source: BMO Capital Markets, April…
  29. November 2014 Investor Presentation – Talisman Energy Inc. – slide 29
    D&C COST CHALLENGE 11.0 19.0 4.5 3.5 5 0 10 15 20 2014 average cost Drilling Completions Target D&C costs $ million ? No vertical strat. test ? Drilling time learning curve ? Pad drilling efficiencies ? Multi-well…
  30. November 2014 Investor Presentation – Talisman Energy Inc. – slide 30
    DUVERNAY ? GROW SUBSTANTIAL PRODUCTION Sources and uses of cash** $ million * Assumes COGEH price deck 0 20 40 60 80 100 2013 2019 2020 2014 2015 2016 2017 2018 Liquids Gas Value growth Future 100 mboe/d ** Assumes 100%…
  31. November 2014 Investor Presentation – Talisman Energy Inc. – slide 31
    COLOMBIA Equion CPE-6 Akacias TLM block Equion block
  32. November 2014 Investor Presentation – Talisman Energy Inc. – slide 32
    COLOMBIA ? PRODUCING AND POSITIONED FOR GROWTH Materiality Cost Structure Cost Structure Competitive Advantage Competitive Advantage ? Self-funding growth with Equion providing cash flow to develop blocks CPO-9 & CPE-6 ? Major…
  33. November 2014 Investor Presentation – Talisman Energy Inc. – slide 33
    EQUION ? WELL RUN, EFFICIENT SOURCE OF CASH Pauto Cupiagua Norte Equion block Oil field Gas condensate Florena Piedemonte Recetor Cusiana 0 10 20 ?13 ?14 ?15 ?16 ?17 ?18 Production mboe/d ~$220 million Cash flow from…
  34. November 2014 Investor Presentation – Talisman Energy Inc. – slide 34
    CPO-9 ? AKACIAS AND ADDITIONAL PROSPECTS RESULTING IN SUBSTANTIAL UPSIDE Note: 2013 annualized production numbers based on ANH public data Castilla ~113mbbls/d Chichimene Akacias ~53mbbls/d Apiay Block ~22mbbls/d CPO-9 block…
  35. November 2014 Investor Presentation – Talisman Energy Inc. – slide 35
    AKACIAS ? DEVELOPMENT UNDERWAY Akacias Production mboe/d (TLM net) 0 10 20 30 40 ?13 ?18 ?14 ?15 ?16 ?17 Upside Akacias ? O&G regulator (ANH) is supportive of Field Development Plan as submitted, obtaining environmental permit…
  36. November 2014 Investor Presentation – Talisman Energy Inc. – slide 36
    CPO-9 ? AKACIAS EVOLUTION THROUGH APPRAISAL AE-2 AE-1 Ak-20 Ak-17 Ak-16 Ak-11 Ak-15 Ak-10 Ak-19 Ak-18 Ak-1 Untested Untested LTT LTT LTT LTT LTT LTT LTT LTT LTT Max lowest known oil ? logged pay to base AE-2 ? 3.2 billion bbls OOIP*…
  37. November 2014 Investor Presentation – Talisman Energy Inc. – slide 37
    CPO-9 ? AKACIAS: POTENTIAL FOR A MUCH LARGER ACCUMULATION ? Humadea well drilled in the ?70?s proved heavy oil in the Nueva Esperanza Sur structure ? Targeting oil in the up dip structural trend to the SW ? 4 well exploration…
  38. November 2014 Investor Presentation – Talisman Energy Inc. – slide 38
    ASIA-PACIFIC ? DELIVERY, CASH FLOW AND GROWTH Materiality Cost Structure Cost Structure Competitive Advantage Competitive Advantage ? 2P reserves of 520 million boe ? ~$1.2 billion of cash flow, ~50% of Talisman?s 2014…
  39. November 2014 Investor Presentation – Talisman Energy Inc. – slide 39
    ASIA-PACIFIC ? SUBSTANTIAL CASH FLOW AND GROWING ~140,000 boe/d >10% CAGR Cash flow Sources and uses of cash* $ million 0 500 1,000 1,500 2,000 Capital Cash flow** 2013 2014 2015 2016 2017 2018 * Including Algeria ** Assumes…
  40. November 2014 Investor Presentation – Talisman Energy Inc. – slide 40
    TRACK RECORD OF DELIVERY 0 20 40 60 80 100 120 140 160 180 1993 1998 2003 2008 2013 Vietnam Other Malaysia Indonesia Production mboe/d September, 2003 PM-3 CAA project, producing over 19 mboe/d in Q4 October, 2005…
  41. November 2014 Investor Presentation – Talisman Energy Inc. – slide 41
    2010 2012 2014 2016 2018 2020 2022 2024 2026 14 12 10 8 6 4 2 0 5 0 10 15 20 Vietnam Singapore Malaysia Indonesia DOMESTIC DEMAND DRIVING GAS PRICE INCREASES * Includes Singapore, Malaysia, Vietnam and Indonesia Asia-Pacific…
  42. November 2014 Investor Presentation – Talisman Energy Inc. – slide 42
    ASIA-PACIFIC ? FREE CASH FLOW AND SUSTAINABLE GROWTH Corridor PM3- CAA HST/HSD ? Red Emperor ? Kinabalu ? Jambi Phase 2 ? Tangguh Train 3 ? Sabah ? Sakakemang ? Nam Con Son ? Business Development Foundation Developing Future
  43. November 2014 Investor Presentation – Talisman Energy Inc. – slide 43
    CORRIDOR ? GROWTH AND SUSTAINABILITY Sources and uses of cash* $ million Production (net)* mboe/d ? ~1.1bcf/d gross sales ? Production growth over the mid-term ? Infill drilling ? potential to support expansion of 80 to 150…
  44. November 2014 Investor Presentation – Talisman Energy Inc. – slide 44
    CORRIDOR ? PREMIUM PRICING, EXCEPTIONAL NETBACKS YTD 2014 Corridor field price realization and netback chart $/mcf 9.81 5.71 3.27 Opex/trans. Netback 0.83 Realized price Royalties 8% Fixed Price Gas Oil Linked Gas 69%…
  45. November 2014 Investor Presentation – Talisman Energy Inc. – slide 45
    OPERATOR OF CHOICE AT PM-3 CAA Sources and uses of cash* $ million Production outlook mboe/d 2013 2014 2015 2016 2017 2018 ? Maintain production with infill drilling and well interventions ? Step out drilling of stratigraphic oil…
  46. November 2014 Investor Presentation – Talisman Energy Inc. – slide 46
    HST/HSD ? EXCELLENT PROJECT EXECUTION, EXCEPTIONAL NETBACKS Production mboe/d Sources and uses of cash* $ million 5 0 10 15 2013 2016 2014 2015 2017 2018 YTD 2014 netback $78 per boe 0 100 200 300 2013 2018 2014 2015 2016…
  47. November 2014 Investor Presentation – Talisman Energy Inc. – slide 47
    KINABALU ? INCREMENTAL PRODUCTION Production outlook mboe/d ? 1st expired PSC to be granted to an Independent ? Improving operational efficiency, Q3 >95% ? Production records achieved as operator 0 10 20 2013 2014 2015 2016 2017…
  48. November 2014 Investor Presentation – Talisman Energy Inc. – slide 48
    RED EMPEROR ? RESOURCE WITH SIGNIFICANT UPSIDE ? 67 million boe of gross 2C contingent resources in Red Emperor field ? Red Emperor extension ? 2 wells to be drilled in 2014 Red Emperor Proposed 2014 Drilling Block136 2013 2014…
  49. November 2014 Investor Presentation – Talisman Energy Inc. – slide 49
    SAKAKEMANG ? SIGNIFICANT POTENTIAL IN ?OUR? BACK YARD ? Strategically positioned farm-in within a proven petroleum province ? Synergy with Corridor and Jambi Merang ? Exceptional access to markets and infrastructure Sakakemang…
  50. November 2014 Investor Presentation – Talisman Energy Inc. – slide 50
    5 0 10 15 2013 2018 2014 2015 2016 2017 0 50 100 150 Capital Cashflow* Sources and uses of cash* $ million Production mboe/d ALGERIA ? FREE CASH FLOW & PERTAMINA RELATIONSHIP TLM block Other block Oil fields EMK Ourhoud…
  51. November 2014 Investor Presentation – Talisman Energy Inc. – slide 51
    NORTH SEA BUSINESS OVERVIEW ? Drive value from late life assets while continuing to pursue divestments/dilutions ? Restore reliability and efficiency ? Execute major projects ? Optimize abandonment costs & schedule ? Divest/dilute…
  52. November 2014 Investor Presentation – Talisman Energy Inc. – slide 52
    ? Buchan turnaround complete in Q3 & Bleoholm continues Q3/Q4 2014 ? Partner alignment reached on Ross & Blake to secure the Bleoholm vessel until 2019 Bleoholm & Buchan Buchan Blake Ross Bleoholm Hannay To Forties IMPROVING…
  53. November 2014 Investor Presentation – Talisman Energy Inc. – slide 53
    TALISMAN UK JOINT VENTURE PORTFOLIO MANAGEMENT Core Late Life Life Extension Decommissioning Primary value driver: Increase production ? Improve deliverability ? Production efficiency ? Project execution ? Extract additional well…
  54. November 2014 Investor Presentation – Talisman Energy Inc. – slide 54
    KURDAMIR / TOPKHANA CROSS SECTION T-1 T-2 K-3 K-1 K-2 2C ODT: 2049 mss 3C ODT: 2229 mss Topkhana Kurdamir ? T-1 (drilled before K-2 & K-3) was not tested in the oil leg ? GOC 1882m in Topkhana extrapolated from K-2 and K-3 DST…
  55. November 2014 Investor Presentation – Talisman Energy Inc. – slide 55
    TALISMAN TRANSITION 2012-2014 STRATEGIC PRIORITIES ? Live within our means - Reduced capital $4 billion to ~$3 billion - Maintain debt-to-cash flow 1.5-2x ? Focus our capital program - Liquids production from core up 25%, cash flow…
  56. November 2014 Investor Presentation – Talisman Energy Inc. – slide 56
    TALISMAN TRANSITION 2012-2014 DISCIPLINED & FOCUSED CAPITAL ALLOCATION 75 70 65 0 2012 2013 2014E 70% of capital directed to core regions Percentage (%) 20% reduction in capital expenditure $ billion >70% in core 4.0 3.5…
  57. November 2014 Investor Presentation – Talisman Energy Inc. – slide 57
    TALISMAN TRANSITION 2012-2014 LIQUIDS AND CASH FLOW FROM CORE AREAS 450 400 350 0 650 600 550 500 +50% 1Q?13 3Q?14 2Q?13 3Q?13 4Q?13 1Q?14 2Q?14 60% cash flow growth from core areas $ million 100 95 0 110 115 105 120…
  58. November 2014 Investor Presentation – Talisman Energy Inc. – slide 58
    SAFE AND EFFECTIVE EXECUTION 0 10 20 30 40 50 2011 2012 2013 Marcellus Eagle Ford Drilling cycle time (spud to release) Days Total reportable injuries frequency Per million exposure hours 4 3 2 1 0 2011 2012 2013
  59. November 2014 Investor Presentation – Talisman Energy Inc. – slide 59
    SIMPLIFIED STRUCTURE AND LOWER COST Reduced executive team by 45% 430 420 410 400 0 500 460 490 480 470 450 440 2012 2013 2014E G&A reduction $ million Reduced management layer by 25% 20%
  60. November 2014 Investor Presentation – Talisman Energy Inc. – slide 60
    0.0 0.5 1.0 1.5 2.0 2.5 8 3.0 6 4 2 0 1H?12 3Q?14 2H?12 1H?13 2H?13 1H?14 STRONG & FLEXIBLE CAPITAL STRUCTURE ? Targeting 1.5-2.0x debt:cash flow ? Capacity for small acquisitions within core regions ? Investment grade Gross…
  61. November 2014 Investor Presentation – Talisman Energy Inc. – slide 61
    PORTFOLIO MANAGEMENT ? Delivered against disposition targets ? $6.6 billion dispositions (including carries) since 2011 ? Exited 7 non-core positions ? Targeting ~$2 billion additional dispositions next 12-18 months Dispositions 0…
  62. November 2014 Investor Presentation – Talisman Energy Inc. – slide 62
    TALISMAN KEY HISTORICAL DATA Q3-2014 2013 2012 2011 2010 2009 2008 2007 Daily production, before royalties Oil & liquids (mbbsl/d) 135 132 162 178 189 211 224 241 Natural gas (mmcf/d) 1,310 1,451 1,582 1,491 1,367 1,283 1,247 1,265…
  63. November 2014 Investor Presentation – Talisman Energy Inc. – slide 63
    TALISMAN KEY HISTORICAL DATA Q3-20141 20131 20121 2011 2010 20092 20082 2007 Ratios and Key Indicators ($ millions, except per share) Cash flow 507 3,022 2,196 3,434 2,954 3,961 6,163 4,327 Net Income (loss) 425 (1,175) 132 776 945…
  64. November 2014 Investor Presentation – Talisman Energy Inc. – slide 64
    Share information, adjusted to reflect stock splits Average common shares outstanding (millions) 1,033 1,025 1,030 1,023 1,018 1,015 1,017 1,032 TSX trading info Average daily trading volume (thousands) 4,877 2,574 6,105 5,258 5,042…

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