John Manzoni strikes me as a great salesman. But I don’t think the news he delivered on Tuesday as Talisman Energy Inc. announced its 2012 capital plan was well received by the investment community. The plan will see the Calgary-based firm cut back on spending by $500 million c0mpared to 2011, attempt to shore up its disappointing operations in the North Sea and shift its focus on liquids in North America.

Indeed, as Talisman’s president and CEO faced a series of probing questions during the question and answer session of yesterday’s teleconference, it was clear analysts were not terribly impressed by what they heard.

In a Tuesday research note to clients, analyst Kam Sandhar of Calgary investment house Peters & Co. wrote that Talisman is entering another “transitional phase” as persistently weak natural gas prices affect drilling economics. As a result, the firm will focus on drilling in the Eagle Ford shale play in the United States, which is rich in natural gas liquids (NGLs). It will also slow down development in the Montney tight gas play in northeastern British Columbia, where the company will only deploy four rigs in 2012. It’s also looking to sell between $1- and $2-billion in non-core assets. Manzoni seemed to agree with the view that Talisman is a company in the midst of a retooling job. “This is the natural evolution of a portfolio,” he said. “You have to make some choices.”

But can Talisman pull this off when it struggled with similar issues in 2011? While the choice to focus on liquids-rich regions in North America makes complete sense, Talisman seems a bit late to this party. And in ramping up capital spending in Texas’ Eagle Ford ($500 million compared to $350 million in 2011), it’s doing so in a costly environment. “It’s one of the hottest plays in terms of costs of service,” said Paul Smith, Talisman’s executive vice-president of North American operations. Smith admitted the company struggled in 2011 as it established its Eagle Ford business.

“We got off to a slower than expected start. I think we underestimated the degree of complexity to build out an organization in Houston, get the supply chain set up and really get that flywheel turning like it’s turning in the Marcellus. But the machine is gathering momentum. We are running with 11 rigs and we’ll be increasing roughly a rig a quarter to take us to 14 rigs by the end of this year.”

Despite Smith’s optimism, Talisman will have to walk the walk and show some encouraging results in the Eagle Ford before investors will have any confidence it can reach the goal of growing its liquids production in North America from 25,000 barrels per day to 65,000 by 2015.

And those investors can’t be encouraged by what they heard from Manzoni about Talisman’s ongoing struggles in the North Sea. Aging infrastructure, sooner-than-expected high water cuts at its Tweedsmuir and Auk North developments and the delayed Yme project in Norway all dogged the company in 2012. While acknowledging its problems in the North Sea have negatively affected the company’s share price, Manzoni did his best sales job on this front.

I think we now have a good team on the ground in the United Kingdom. This needs time. It’s a complex business. But that team is getting its arms around that business and starting to make the underlying improvements that will make it more reliable.

Based on the line of questioning Manzoni got while unveiling Talisman’s latest capital plan, investors will be holding him to his word in the next 12 months.

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