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Talisman Energy (TLM) Q4 Loss Widens on Price Slide

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Canadian energy explorer, Talisman Energy Inc. reported fourth-quarter 2014 adjusted loss from continuing operations (excluding non-operating items) of 14 cents per share as against the Zacks Consensus Estimate of earnings of 2 cents. The reported loss also widened from the year-ago quarter loss of 11 cents. A significant drop in realized prices hampered the result.

Total quarterly revenue of $44 million slumped over 95% from the fourth-quarter 2013 level of $929 million and also fell short of the Zacks Consensus Estimate of $1,480 million. A drop in sales and lower contribution from joint venture/affiliates affected the results.

For 2014, Talisman Energy reported adjusted loss from continuing operations of 2 cents per share, against the Zacks Consensus Estimate of earnings of 12 cents. However, it narrowed from aloss of 24 cents reported in 2013.  Total revenue of $3,763 million was lower than $4,486 million generated a year ago.

Volume Analysis

Total production for Oct–Dec was 365 thousand barrels of oil equivalent per day (MBOE/d), down 5.7% from the prior-year level.
 
Total liquids production improved to 140,229 barrels per day (Bbl/d) from 136,427 Bbl/d in the year-ago quarter. Higher productions from North America and North Sea aided the result.  
 
Talisman Energy’s natural gas volumes were down 10.5% year over year to 1,347 million cubic feet per day (MMcf/d), mainly on account of lower productions from North America and Southeast Asia.

Realized Prices

During the reported quarter, Talisman Energy’s realized commodity prices decreased 24.4% from the year-ago quarter to $41.34 per barrel of oil equivalent (BOE).
 
Overall liquids realizations averaged $59.90 per barrel, down about 38% from the prior-year level, while natural gas prices decreased to $4.96 per Mcf from the year-ago quarter level of $5.33 per Mcf.   

Cash Flow and Capital Expenditure
 
Cash flow totaled $508 million, down 12.4% year over year. Capital expenditure for the quarter totaled $835 million.

Balance Sheet
 
As of Dec 31, 2014, Talisman Energy had cash and cash equivalents of approximately $262 million and long-term debt (including current portion) of $5,064 million, with a debt-to-capitalization ratio of 40.6%.  

Zacks Rank  

Talisman Energy, an independent oil and gas exploration and production (E&P) firm,  currently carries a Zacks Rank #4 (Sell).

Better-ranked players from the industry include LRR Energy, L.P. , Midstates Petroleum Company, Inc. and Sabine Oil & Gas Corporation . All these stocks hold a Zacks Rank #2 (Buy).
 




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