NEW YORK (TheStreet) -- It sounds strange but Talisman Energy (TLM) is eying growth by shrinking its asset base.

Talisman is one of the leading independent oil and gas producers from Canada. Billionaire activist investor Carl Icahn of Icahn Enterprises (IEP - Get Report) owns 7.4% of the company. Talisman has delivered a poor performance at the stock markets; its shares have dropped by 9.8% over the last 12 months and closed at $10.65 on Wednesday. Over the last two years, Talisman has not reported any revenue or earnings growth.

All of that, however, can change in the near future. Amid the management shuffle, with the entry of Icahn's representatives on the board and a CEO change due in the current year, the company is readjusting its portfolio. Talisman is selling its non-core assets and investing heavily in its high value projects in the Americas and Asia Pacific. The company's lucrative assets in Southeast Asia and its oil-rich acreage in Colombia can drive its growth over the coming years.

In 2012, Talisman sold its 49% interest in its North Sea business to China Petroleum and Chemical  (SNP - Get Report) for $1.5 billion. The deal, which closed by the end of 2012, caused a significant drop in Talisman's production in 2013 as the company swung to a loss of $1.2 billion, or 24 cents per share, from a profit of $132 million a year earlier. The 2012 results also included an $860 million non-taxable gain from the asset sale.

In 2013, the company sold more than $2 billion of its assets, which mainly includes the sale of its 75% stake in Montney for $1.3 billion. Talisman's total production fell 12.4% to 373,000 barrels of oil equivalents per day, driven by 18.5% drop in liquids production.

Moreover, Talisman has also agreed to sell some of its assets in Indonesia and its Monkman properties in Western Canada. Through divestments, Talisman will raise more than $2 billion within the next 18 months.

But divestments will also cause a drop in production. The Monkman asset sale alone will bring down the company's output by 75 million cubic feet per day. Talisman's total production could fall. The company has forecast between 6.17% and 2.14% drop in production in 2014.

Talisman's focus has been on selling its non-core assets, such as those in North Sea, which includes assets in U.K. and Norway and Kurdistan. The North Sea assets in particular were a headache for the company, which is evident in their considerably lower netbacks. The priority will be to sell the less lucrative and mature assets that have substantial capital requirements.

On the other hand, Talisman will spend billions on the development of its core assets in North America, Colombia and Asia Pacific. The company will spend $3.2 billion as capital expenditure in 2014, which is in line with 2013. More than 70% of this will flow to its core areas that can deliver higher volumes of liquids in the near term.

As a result, Talisman forecast a 4% to 7% increase in production in 2014 from its core areas, driven by a 14% to 17% growth in liquids volume. The growth in the higher margin liquids production will shore up the company's bottom line and cash flows.

Talisman's assets in Colombia, including the heavy oil blocks in Llanos and Putumayo, look extremely promising. Last year, Talisman reported a slight increase in production from Columbia to 20,000 barrels of oil equivalents per day, but there is room for a lot of growth. Talisman is currently evaluating its properties in the country. Long term test results have shown gross liquid production of more than 9,000 barrels per day, and that is just from one of its two blocks.

Talisman's other block in Colombia also tested positive for oil in late 2013. Subsequently, the company started drilling nine additional appraisal wells to further assess the acreage. Amid ongoing development, Talisman has said that it can announce the "declaration of commerciality in the second half of the current year.

Moreover, its liquid rich assets in Southeast Asia, particularly in Malaysia, Indonesia and Vietnam aren't any less attractive. Although the company has reported flat production growth, these assets offer high netbacks. A netback is the difference between the revenue generated from the sale of a barrel of oil and the cost associated with bringing that same barrel of oil to the market.

In the previous quarter, Talisman reported total netbacks of $51.73 per barrel in Southeast Asia, as compared to $41.21 in North America and just $15.39 at the North Sea.

According to analysts' estimates compiled by Thomson Reuters, Talisman could swing to a profit of 31 cents per share in 2014 on the back of 30.4% growth in revenue. This could be huge for Talisman Energy as the company has not posted any revenue and income growth over the last two years.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.