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Canadian energy explorer, Talisman Energy Inc. (TLM - Analyst Report), reported weak third-quarter 2013 results due to decreased production along with lower liquids price realizations. The company announced a loss per share from continuing operations (excluding non-operating items) of 4 cents against the Zacks Consensus Estimate of 3 cents earnings per share. However, the figure remained flat on a year-over-year basis.

Quarterly total revenue of $1,232.0 million deceased 25.2% from $1,647.0 million in the third quarter of 2012. Revenues also missed the Zacks Consensus Estimate of $1,508.0 million.

Volume Analysis

The quarter’s total production of 371 thousand barrels of oil equivalent per day (MBOE/d) was down 10.6% from the year-ago level.

Total liquids production was down 29.6% year over year to 104,811 barrels per day (Bbl/d). Volumes were affected by significantly lower production in the North Sea.

Talisman’s natural gas volumes were down 7.6% year over year to 1,377 million cubic feet per day (MMcf/d), mainly due to decreased production in North America, Southeast Asia and North Sea.

Realized Prices

During the quarter, Talisman’s realized commodity prices dropped 6.4% from the year-ago quarter to $53.11 per barrel of oil equivalent (BOE). The decline mainly resulted from reduced liquids realizations in Southeast Asia.

Overall, natural gas prices increased 12.2% year over year to $5.51 per Mcf, however, liquids realizations averaged $97.04 per barrel, down 5.1% from the year-ago level.

Cash Flow and Capital Expenditure

Cash flow from continuing operations totaled $573.0 million, down 17.3% year over year. Talisman spent $849.0 million on exploration and development activities.

Balance Sheet

As of Sep 30, 2013, Talisman had cash and cash equivalents of approximately $407.0 million and long-term debt of $5,504.0 million (including current portion), with a debt-to-capitalization ratio of 36.4%.

Zacks Rating

Talisman currently carries a Zacks Rank #3 (Hold), which implies that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at oil and gas exploration and production firms like TransGlobe Energy Corporation (TGA - Snapshot Report), Baytex Energy Corp. (BTE - Snapshot Report) and Bellatrix Exploration Ltd. (BXE) that offer better prospects. TransGlobe Energy sports a Zacks Rank #1 (Strong Buy) while Baytex Energy and Bellatrix Exploration retain a Zacks Rank #2 (Buy).
 

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