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Q4 2013 Results – Talisman Energy Inc.

Talisman Energy Inc. · Feb 12, 2014 · 39 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. Q4 2013 Results – Talisman Energy Inc. – slide 1
    CORPORATE PRESENTATION February 2014
  2. Q4 2013 Results – Talisman Energy Inc. – slide 2
    TALISMAN OVERVIEW ? 2014 production guidance 350-365 mboe/d ? Core areas 324-334 mboe/d ? Other 26-31 mboe/d Other areas ? considering all options ? UK ? Sinopec deal lowers exposure ? Norway ? sales process underway ? Kurdistan ?…
  3. Q4 2013 Results – Talisman Energy Inc. – slide 3
    ~90% of production 2014 production 350-365 mboe/d ~95% of 2P reserves 2013 2P reserves 1.6 billion boe RLI ~ 12 years ~90% of COGEH 2P value 2012 COGEH 2P value ~ $14 billion ~95% of contingent resource 2012 contingent…
  4. Q4 2013 Results – Talisman Energy Inc. – slide 4
    PROGRESS ON KEY PRIORITIES Unlocking NAV JV, dispose of non-core or long dated assets Focused capital program Two core areas, near-term, high value projects ? Asia Pacific - Core assets are characterized by long production life, low…
  5. Q4 2013 Results – Talisman Energy Inc. – slide 5
    PROGRESS ON KEY PRIORITIES Living within our means & cash margins Balance cash flow and capex, maintain balance sheet strength Improve operation performance ? 2013 cash flow of $2.2 billion, target 5% growth in 2014 to ~$2.3 billion…
  6. Q4 2013 Results – Talisman Energy Inc. – slide 6
    2014 PRODUCTION GUIDANCE ? 2014 liquids growth of 14-19% in core regions ? Overall growth in core regions of 4-7% ? Core regions contribute over 90% of 2014 production and cash flow ? Increase in overall cash margin per barrel of…
  7. Q4 2013 Results – Talisman Energy Inc. – slide 7
    2014 CAPITAL GUIDANCE ? Capital program in core regions focused on near-term, high margin volumes ? 2014 capital of ~$3.2 billion - Flat on 2013 - Decrease of 20% from 2012 - Over 70% of 2014 capital will be invested in core…
  8. Q4 2013 Results – Talisman Energy Inc. – slide 8
    LIQUIDS FOCUSED INVESTMENT 0 1,000 2,000 3,000 4,000 5,000 6,000 Investment by product vs. cash flow $ million 2011 2012 2013 Liquids International gas North American gas Cash flow Dispositions Announced Investments Cash…
  9. Q4 2013 Results – Talisman Energy Inc. – slide 9
    UNLOCKING THE VALUE OF OUR PORTFOLIO Core Assets ~2,200 Major assets ? cash flow (2013) $ million 8 assets produced ~80% of 2013 cash flow HST/HSD Eagle Ford Colombia Marcellus PM-3 Corridor ? Will realize >$2B from…
  10. Q4 2013 Results – Talisman Energy Inc. – slide 10
    G&A REDUCTIONS ? 2013 G&A of ~$430 million, down from 2012 ? Includes ~$20 million of one-off costs, therefore run-rate reduction of ~20% ? Streamlined leadership structure, reduced senior management by 1/3 ? Focus on corporate…
  11. Q4 2013 Results – Talisman Energy Inc. – slide 11
    NORTH AMERICA ? WELL POSITIONED IN ATTRACTIVE PLAYS 2013 Production: 11 mbbls/d ? Low-risk infill drilling ? Evaluating enhanced oil recovery potential ? Operating margin $40/boe 2014 Guidance: ~11 mbbls/d 2014 Capital: ~$35…
  12. Q4 2013 Results – Talisman Energy Inc. – slide 12
    EAGLE FORD ? Projecting >30% increase liquids growth in 2014 ? Free cash flow gap shrinking ? ~20% reduction in capex ? Focus on higher value acreage and pad drilling ? Further optimize production and drilling operation ? 16%…
  13. Q4 2013 Results – Talisman Energy Inc. – slide 13
    -200 -100 0 100 200 300 400 500 2012 2013 2014 MARCELLUS ? PREDICTABLE, LOW RISK, FREE CASH FLOW ? Maintaining 2014 production at 430-450 mmcf/d ? Firm transportation of 620 mmcf/d, most backhaul to Henry Hub ? Capex ~300m,…
  14. Q4 2013 Results – Talisman Energy Inc. – slide 14
    0 50 100 150 200 2012 2013 2014 CHAUVIN ? High margin oil production 11 mbbls/d, substantial free cash ? Infill drilling and enhanced recovery potential ? Processing and transportation infrastructure ~40,000 boe/d capacity ?…
  15. Q4 2013 Results – Talisman Energy Inc. – slide 15
    -100 0 100 200 300 400 2012 2013 2014 GREATER EDSON ? Talisman infrastructure provides competitive advantage ? Over 1,000 km pipeline and five Talisman owned facilities ? Large land position with liquids potential ? Short…
  16. Q4 2013 Results – Talisman Energy Inc. – slide 16
    ? Continue to delineate liquids rich areas ? Liquids yield range of ~200 to 1,000 bbls/mmcf ? ~352,000 net acres & 5.3 Billion boe PIIP ? Work program defining phase windows ? 2014 work program ? 1 rig continuing to delineate…
  17. Q4 2013 Results – Talisman Energy Inc. – slide 17
    COLOMBIA ? PRODUCING AND POSITIONED FOR GROWTH Colombia overview Heavy oil Ocensa ? Monetized equity & retained transportation rights for ~63 mboe/d ? Surplus capacity generating 3rd party revenue ? Expected production growth for…
  18. Q4 2013 Results – Talisman Energy Inc. – slide 18
    0 20 40 60 80 EQUION ? PIEDEMONTE AND NISCOTA Equion $/boe Opex and G&A Taxes Cash Margin Royalty Niscota Hur?n-1 Hur?n-2 0 5 10 15 20 km Pauto Cupiagua Norte Cusiana Equion block Mundo Nuevo TLM block Recent…
  19. Q4 2013 Results – Talisman Energy Inc. – slide 19
    CPO-9 MOMENTUM TO DEVELOP MULTI-BILLION BARREL DISCOVERY ? 9 well appraisal program completed after initial exploration well ? 6 wells on long-term test, averaging >8,000 bbls/d gross per day and 25% water cut ? Remaining 5…
  20. Q4 2013 Results – Talisman Energy Inc. – slide 20
    AE-2 AE-1 AK-17 AK-16 AK-11 AK-15 AK-10 AK-19 AK-18 AK-1 CPO-9 STRONG WELL TEST PRODUCTION RATES AKACIAS APPRAISAL WELL PROGRAM RESULTS* Well bbls/d Water Cut Status AK-1 ~1,900 17% On long-term test AK-9 ~1,800 10% On long-term…
  21. Q4 2013 Results – Talisman Energy Inc. – slide 21
    CPE-6 SIGNIFICANT OIL ACCUMULATION, PROGRESS TOWARDS DEVELOPMENT ? License to allow full development of CPE-6 received in November 2013 - 2 vertical wells drilled late 2013, both tested oil - 9 follow-up horizontal/vertical appraisal…
  22. Q4 2013 Results – Talisman Energy Inc. – slide 22
    PM3 CAA and Malay Basin Exploration & Development Red Emperor and Nam Con Son Development & Exploration Papua New Guinea Gas aggregation and early liquids Kinabalu and Sabah Basin Development & Exploration ASIA-PACIFIC ?…
  23. Q4 2013 Results – Talisman Energy Inc. – slide 23
    RAPIDLY GROWING ASIAN ECONOMIES DRIVING INCREASED ENERGY DEMAND 15 5 10 0 2010 2025 2015 2020 9 bcf/d ? Gas supply gap of 9 bcf/d in 2025 ? Domestic gas supply is peaking and cannot keep pace with demand growth ? LNG imports…
  24. Q4 2013 Results – Talisman Energy Inc. – slide 24
    SOUTH SUMATRA ? PREMIUM MARKETS, MATERIAL FREE CASH FLOW GENERATION ? Reinvestment delivering near-term incremental production and cash flow ? Domestic gas prices continue to rise ? Active portfolio management targeting tuck-in…
  25. Q4 2013 Results – Talisman Energy Inc. – slide 25
    CORRIDOR ? WORLD CLASS ASSET **Gross sales non-cumulative facility capacity Production outlook(1) mmcfe/d 0 100 200 300 400 500 2013 2014 2016 Sources and uses of cash(1) $ million COPI gas pipeline 3rd party pipeline Gas…
  26. Q4 2013 Results – Talisman Energy Inc. – slide 26
    PM-3 CAA AND MALAY BASIN ? OPERATIONS EXCELLENCE WITH EXCITING UPSIDE ? Maintain production levels through infill drilling and well interventions ? Continuous operations improvement ? Stratigraphic play explored through development…
  27. Q4 2013 Results – Talisman Energy Inc. – slide 27
    PM-3 CAA ? HIGH QUALITY OPERATING BUSINESS ? Top quartile uptime performance (97% production efficiency in 2012) ? Making good progress on PSC extension ? Netbacks, exceeding $22/boe in 2013 ? PSC environment delivers cost effective…
  28. Q4 2013 Results – Talisman Energy Inc. – slide 28
    KINABALU AND SABAH BASIN ? Production growth through infill drilling and facility upgrades at Kinabalu Near-term The future ? Significant exploration upside through shallow oil prospects near infrastructure and large deeper gas…
  29. Q4 2013 Results – Talisman Energy Inc. – slide 29
    HST/HSD ? ON STREAM AHEAD OF SCHEDULE AND UNDER BUDGET ? HST/HSD project in Vietnam delivered first oil May 2013 ahead of schedule and under budget ? Delivering near-term peak production of ~12 mboe/d with rapid investment payback ?…
  30. Q4 2013 Results – Talisman Energy Inc. – slide 30
    RED EMPEROR AND THE NAM CON SON ? Oil discovery synergy with adjoining blocks ? Discovered oil resource with upside potential ? Appraisal well CRD-3X tested over 8 mboe/d ? Successful sidetrack further confirming resource potential…
  31. Q4 2013 Results – Talisman Energy Inc. – slide 31
    PNG ? CAPITALISING ON PROLIFIC RESOURCE POTENTIAL IN A LOW F&D COST ENVIRONMENT ? High-grading land position to maintain quality and focus ? Executing early liquids projects at Stanley and Elevala/Ketu ? Drilling program ongoing with…
  32. Q4 2013 Results – Talisman Energy Inc. – slide 32
    KURDISTAN ? MAJOR OIL DISCOVERY AT KURDAMIR POSSIBLE EXTENSION TO TOPKHANA ? Kurdamir-1 well (2010) found major Oligocene gas condensate accumulation with oil shows in deeper Oligocene/Cretaceous section ? Topkhana-1 well (2011)…
  33. Q4 2013 Results – Talisman Energy Inc. – slide 33
    KURDAMIR / TOPKHANA CROSS SECTION Kurdamir-1 Topkhana Block (60% TLM) Topkhana-1 Kurdamir-2 DST 2 Kurdamir Block (40% TLM) Topkhana-2 Kurdamir-3 Kurdamir-2 Kurdamir-1 Topkhana-1 Topkhana-2 Kurdamir-3 2C Contingent gas and…
  34. Q4 2013 Results – Talisman Energy Inc. – slide 34
    MONETIZATION IN KURDISTAN ? POTENTIAL CRUDE OIL EGRESS / TRANSPORT ROUTES Tie in options 1. Kurdamir to Khurmala (approx. 120 km) 2. Kurdamir to Kirkuk (approx. 80 km) Export pipeline options 1. ITP ? Khurmala Kirkuk Ceyhan…
  35. Q4 2013 Results – Talisman Energy Inc. – slide 35
    NORTH SEA BUSINESS OVERVIEW ? Improve reliability and stability ? UK base investment focused on operating efficiency to extend field life and maintain asset integrity ? Portfolio optimization ? JV reduced the UK?s volatility impact…
  36. Q4 2013 Results – Talisman Energy Inc. – slide 36
    11 8 2 8 4 0 12 2016 2017 MONARB ? DRIVING CAPITAL EXCELLENCE Montrose area redevelopment Montrose Arbroath Cayley Godwin Shaw 78 55 50 0 50 100 +50% Operating efficiency* Percentage (%) Production* mboe/d > 100%…
  37. Q4 2013 Results – Talisman Energy Inc. – slide 37
    TALISMAN KEY HISTORICAL DATA 2013 2012 2011 2010 2009 2008 2007 Daily production, before royalties Oil & liquids (mbbsl/d) 132 162 178 189 211 224 241 Natural gas (mmcf/d) 1,451 1,582 1,491 1,367 1,283 1,247 1,265 Barrels of oil…
  38. Q4 2013 Results – Talisman Energy Inc. – slide 38
    TALISMAN KEY HISTORICAL DATA 20131 20121 2011 2010 20092 20082 2007 Ratios and Key Indicators ($ millions, except per share) Cash flow 2,196 3,434 3,022 2,954 3,961 6,163 4,327 Net Income (loss) (1,175) 132 776 945 437 3,519 2,078…
  39. Q4 2013 Results – Talisman Energy Inc. – slide 39
    Share information, adjusted to reflect stock splits Average common shares outstanding (millions) 1,030 1,023 1,025 1,018 1,015 1,017 1,032 TSX trading info Average daily trading volume (thousands) 2,574 6,105 5,258 5,042 4,988 5,486…

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