Talisman Energy: Southeast Asia Oil And Gas Review

By Eric Fox | June 04, 2011 AAA

Talisman Energy (NYSE:TLM) is counting on a large inventory of international properties to help grow production over the next few years, with the company focused on various countries in Southeast Asia to meet this goal.

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Capital Expenditures
Talisman Energy has budgeted total company wide cash exploration and development spending of approximately $4 billion in 2011. The company will spend between $700 million and $800 million in capital on a number of exploration and development projects in Southeast Asia. The company is active in Malaysia, Vietnam, Indonesia and Papua New Guinea.

Southeast Asia
Talisman Energy reported total production of 417,000 barrels of oil equivalent (BOE) per day in 2010, with 28% (117,000 BOE per day) from the company's Southeast Asian properties. In 2011, the company expects this production to be flat at approximately 120,000 BOE per day.

Over the long term, Talisman Energy is looking to grow production by 8% from various projects in Southeast Asia over the 2008 to 2015 time period.

In Vietnam, Talisman Energy is looking to sanction the Hai Su Trang and Hai Su Den oil project located offshore on Block 15-2. The company expects first production from here in 2013 and peak production between 10,000 and 15,000 BOE per day. Talisman Energy estimates that the projects contain proved and probable reserves of 24 million BOE.

In Indonesia, Talisman Energy has existing developments in Sumatra, including the Corridor project. The company plans infill drilling and other development here and estimates that it will add 30,000 BOE per day of incremental production through 2015.

In Malaysia, Talisman Energy has successfully developed three offshore projects over the last ten years. In 2011, the company plans infill drilling and incremental oil recovery efforts on the Block PM-3 Commercial Arrangement Area.

Exploration
Talisman Energy also has exploration planned in the region and expects to drill more than a dozen exploratory wells in 2011 and 2012. These wells will be spread across Vietnam, Indonesia and Malaysia.

Talisman Energy has millions of acres to explore in Papua New Guinea, and has reported several successful wells here. The company plans to sanction one project during 2011, and will spend from $200 million and $250 million in 2011 to drill between eight and ten wells.

Other Players
Other operators have been active in Southeast Asia as well. Indonesia just announced the results of a recent auction of oil and gas concessions, with Eni (NYSE:E) and Total (NYSE:TOT) each winning one of the blocks. Exxon Mobil (NYSE:XOM) has interests in Vietnam and plans to drill an exploratory well offshore during 2011.

Not all oil and gas companies are interested in making additional investments in Southeast Asia. Conoco Phillips (NYSE:COP) is looking to sell the company's interests in three fields located offshore Vietnam. These sales are part of the company's plan to divest between $5 billion and $10 billion in assets during 2011 and 2012.

The Bottom Line
Talisman Energy is counting on various oil and gas projects in Southeast Asia to generate production growth of 8% a year through 2015. The company is active in Malaysia, Vietnam, Indonesia, and Papua New Guinea. (They're hard to predict, but commodities cycles provide valuable information for traders. Check out Cashing In On A Commodities Boom.)

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