Talisman Energy Inc. (TLM) January 10, 2012 1:00 pm ET Executives Tony Meggs - Paul R. Smith - Executive Vice-President of North American Operations L. Scott Thomson - Chief Financial Officer and Executive Vice President of Finance Richard Herbert - Executive Vice President of International Exploration
I would now like to remind everyone that this conference call is being recorded on Tuesday, January 10, at 11 a.m. Mountain Time. I will now turn the conference over to Mr. John Manzoni. You may begin your conference.John A. Manzoni Tracy, thank you very much. Ladies and gentlemen, thank you for joining our guidance call this morning. I am joined here in Calgary by the management team, except for Paul Blakeley, who's in Asia and is on the telephone. And they will be happy to answer your questions after Scott and I have run through the main points we want to get across for you today. I'd like to begin by looking at what was achieved last year and then look forward to our plans for the current year. Despite being a difficult year in some respects for Talisman, a great deal was achieved over the last 12 months. Most importantly, our safety record continues to improve. In 2011, we improved our personal safety statistics again by more than 40%. So we're now moving the company very close to the second quartile, having been at the bottom of the fourth quartile just 3 years ago. In fact, some of our businesses are now firmly in top quartile, which is a tremendous achievement, and is, of course, our first and most important responsibility. Over the course of the last year or 2, we've transitioned the portfolio to secure long-term growth potential. I'm confident today that the company has established an asset base to secure growth in the medium and long term. When we announce our results in a month's time, we will have produced around 425,000 barrels a day in 2011, which is 9% above the 2010 outcome on a continuing-operations basis. Growth in the medium term is founded primarily in our shale portfolio here in North America. We produced over 400 million cubic feet a day in the Marcellus last year and about 485 million cubic feet a day in the fourth quarter and secured some of the highest margins in that region. We consolidated our Montney joint venture with Sasol and began the development of the Farrell Creek area, as well as making good progress understanding long-term monetization options for the gas from that area. In the fourth quarter last year, we produced about 55 million cubic feet a day from the Montney as a whole and about 35 million cubic feet a day from Farrell Creek.
In the Eagle Ford, after a slightly slower start than planned, we produced around 30 million cubic feet a day last year, but we've now established a fully functioning organization and we'll more than double that production this year. And we took a substantial position in the liquids-rich Duvernay shale here in Alberta, which we will learn a lot more about in the next 12 months as we continue to pilot. And of course, we also began drilling in Poland. It's very early days, and again, we'll learn more about that during this year. So our shale portfolio is now underpinning long-term sustainability for the company.The other source of confidence in our medium-term growth is Asia, where we saw successful commissioning of both the Jambi Merang and the Kitan fields during 2011. We produced about 120,000 barrels a day in the region during the fourth quarter, and it's good to remind you that our average sales price for gas in Asia for the year was above $9 an mcf. We'll sanction new projects this year to secure growth into the future. We made further progress in evolving our exploration portfolio, and we drilled several wells in the existing portfolio. In Colombia, I think we have lots to be excited about. We started drilling an appraisal well on the Huron discovery in the foothills and drilled a successful appraisal well on the Akacias discovery in Block 9. The discovery well on that structure continues to show promising results from the long-term test, and it's flowing about 1,600 barrels a day today. In Block 6, we began a program of 6 more stratigraphic wells to appraise the discovery in that block. Activity will accelerate across our portfolio in Colombia this year, which I'll describe for you in a moment. In Papua New Guinea, we drilled several successful wells as we began aggregating gas in that country. We had success in both the Stanley and the Ubuntu wells, and right at the end of the year drilled another encouraging well in the Elevala structure. These wells continue to give us confidence that we can secure sufficient gas to create monetization options over the medium term.
At the very end of last year, we had a disappointing result in our deep water Lempuk well in the South Makassar Straits in Indonesia, which did have gas shows, but has been plugged and abandoned. And we were drilling a number wells over the year end which will reach their objectives in the next few months, including the Situche Norte well in Peru, the Kurdamir-2 well in Kurdistan, and of course, our Poland and Duvernay shale pilot wells.Read the rest of this transcript for free on seekingalpha.com