Talisman Energy (NYSE:TLM) has a large base of producing assets in Southeast Asia and plans an extensive development and exploration program here to generate 8% annual long-term production growth from the region.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Southeast Asia Operations
Talisman Energy reported production of 119,000 barrels of oil equivalent (BOE) per day from its Southeast Asian properties in 2011. The company has producing properties in Malaysia, Vietnam, Indonesia, Timor Leste and Australia.

Talisman Energy's investments in Southeast Asia are based in part on the company's agreement with bullish assessments of future economic growth expected from this region. Economists predict that the GDP in Asia will increase by 5% annually over the long term. This optimistic growth projection will increase demand for natural gas power generation in the region.

Indonesia
Talisman Energy's largest operation in Southeast Asia is Indonesia, where the company reported production of 64,000 BOE per day at the end of 2011. The company is benefiting from recent efforts by the Indonesian government to decontrol long-term natural gas contracts that contain non-competitive pricing, in an effort to stimulate additional development. Talisman Energy expects that the company will benefit from improved pricing as these deregulation trends continue.

SEE: The Most Profitable Investing Trends Right Now

Malaysia
Talisman Energy recently became one of the operators of the Kinabalu field in Malaysia, which comprises a number of onshore and offshore oil and gas fields. The company expects to invest over $1 billion in gross capital at Kinabalu during the term of the contract to increase production growth from these assets. Talisman Energy will also see an immediate increase to its production base and expects to add 8,000 to 10,000 barrels of net oil production per day from this field.

Royal Dutch Shell (NYSE:RDS.A, RDS.B) is the current operator of the Kinabalu field and is set to transfer control to Talisman Energy at the end of 2012.

Talisman Energy also plans development of the PM-3 commercial arrangement area on the Malaysia/Vietnam border. Talisman Energy is targeting infill-drilling opportunities here as well as new plays at PM-3, and estimates that it may get 75 million barrels of additional oil recovery and over Tcf of natural gas here.

SEE: Oil And Gas Industry Primer

Vietnam
In Vietnam, Talisman Energy is advancing the Hai Su Trang and Hai Su Den offshore developments in the Cuu Long Basin. The company has completed 33% of this project and is on track for first oil by second half of 2013.

While Vietnam has many prospective oil and gas areas, some operators have chosen to focus elsewhere. Conoco Phillips (NYSE:COP) sold the company's Vietnam operations in early 2012 for $1.29 billion.

Papua New Guinea
Talisman Energy has significant exploration opportunities in Papua New Guinea, and is involved in a joint venture with Mitsubishi in this country. The company has interests in fourteen licenses covering nearly 14 million acres and plans several exploration wells here in 2012.

Talisman Energy will benefit from a $280 million drilling carry from the Mitsubishi agreement and estimates that these funds will cover up to 14 wells in Papua New Guinea.

Mitsubishi has been active in partnering with established oil and gas operators in other areas as well. In early 2012, the company purchased a 40% interest in natural gas assets in Canada owned by Encana (NYSE:ECA).

SEE: 5 Biggest Risks faced By Oil And Gas Companies

The Bottom Line
Talisman Energy has chosen Southeast Asia as one of the company's core areas to help generate oil and gas production growth going forward. The company has a large inventory of exploration and development projects to choose from in this area.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Investing

    Redefining the Stop-Loss

    Using Stop-losses for trading doesn’t mean ‘losing money’, but instead think about the money you'll start saving once you learn how they work.
  2. Fundamental Analysis

    10 Major Companies Tied to the Apple Supply Chain

    Apple has one of the best supply-chain models. Here are some of the top businesses involved, and the benefits and challenges for all.
  3. Mutual Funds & ETFs

    ETF Analysis: First Trust Dow Jones Global Sel Div

    Find out about the First Trust Dow Jones Global Select Dividend Index Fund, and learn detailed information about characteristics and suitability of the fund.
  4. Markets

    The 5 Biggest Chinese Natural Gas Companies

    Read about the top five Chinese natural gas companies as measured by gas production volume and learn a little more about their business operations.
  5. Markets

    The 5 Biggest Chinese Insurance Companies

    Read about the top Chinese insurance companies by market capitalization, and learn a little about their positions in the marketplace.
  6. Economics

    Who Wins With Low Energy Prices? 

    Low oil prices are here to stay for some time. Which economies will benefit or lose from the low oil price regime?
  7. Term

    What are Non-GAAP Earnings?

    Non-GAAP earnings are a company’s earnings that are not reported according to Generally Accepted Accounting Principles.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  9. Options & Futures

    Use Options to Hedge Against Iron Ore Downslide

    Using iron ore options is a way to take advantage of a current downslide in iron ore prices, whether for producers or traders.
  10. Stock Analysis

    Fortinet: A Great Play on Cybersecurity

    Discover how a healthy product mix, large-business deal growth and the boom of the cybersecurity industry are all driving Fortinet profits.
RELATED TERMS
  1. Trade Credit

    An agreement where a customer can purchase goods on account (without ...
  2. Equity

    The value of an asset less the value of all liabilities on that ...
  3. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  5. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  6. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!