On a Roll
Calgary-based Talisman Energy Inc. leads its North American-based peers in international oil and gas development
Talisman’s growth in the North Sea has been through acquisitions, gaining majority working interests in key fields. By using 3-D seismic, upgrading off-shore platforms, drilling infill wells and recomissioning infrastructure, Talisman has been able to significantly boost oil production in fields that others thought were ready for the scrap heap. “In the 1990s, these North Sea assets were cheap, unloved and unwanted. The major’s didn’t see the value of continued development,” says Dave Mann, senior manager of investor and corporate communications.
As oil prices have risen over the past few years, other new technologies like sub-sea tie backs (a mini-platform that is tied into the main platform) and extended-reach drilling were employed. Talisman has created a “hub and spoke” system of tying in infrastructure that has significantly increased production while bringing down costs. In 12 years, Talisman has become the second largest operator of oil fields in the UK North Sea.
In 2002, Talisman moved to build upon its UK successes by expanding into North Sea waters near Norway. First, it bought the Gyda field from BP, then, in “a logical continuation of its business model,” it acquired the UK’s Paladin Resources in 2005.
Talisman anticipates growing its North Sea production 15 to 20 per cent per year for the next three years.
Southeast Asia
The mantra remains: If it ain’t broke, don’t fix it. In Southeast Asia, Talisman is replicating the success of its UK business model.
Talisman’s most significant opportunity in the region resulted from its acquisition of Sweden-based Lundin Petroleum in 2001. The previous year, Lundin had struck oil in a block offshore of Malaysia and Vietnam—significant oil. In drilling the East Bunga Raya #1 well, Lundin encountered seven new oil zones and two low carbon dioxide natural gas reservoirs. The production test from the main oil zone flowed at a maximum rate of 5,500 barrels per day. Total net pay was 168 feet of oil and 328 feet of gas. “It was the case of a small company growing very quickly, without the cash to develop the assets,” says Mann. This property is now one of the stars in Talisman’s portfolio.
Talisman expects to double its production volumes in Southeast Asia over the next five years.
Although North America, the North Sea, and Southeast Asia account for the vast majority of Talisman’s assets, it has non-operated and land interests in Alaska, Columbia, Peru, and Qatar. If past performance is an indicator of future success, Talisman will continue to be a company to watch.
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