Struggling oil giant Talisman Energy highlighted plans to sell off its North Sea assets as it unveiled a slowdown in UKCS production and quarterly losses of over £600million.
The beleaguered Canadian firm has said it would target assets sales up to £1.8billlion in coming months, adding to sales of £1.2billion made in 2013 as it narrows its focus on its core areas in Canada and Asia Pacific.
The Calgary-based firm also sold half of its UK North Sea assets to the Chinese state-backed Sinopec in a £932million joint venture deal in 2012.
Canada’s number five independent oil and gas producer said in a statement yesterday: “Talisman continues to explore options to exit or dilute its exposure to the North Sea, while aiming to stabilise production and identify operational and cost efficiencies.”
Chief Executive Hal Kvisle joined the firm last year to turn around the company’s fortunes.
The company is under pressure from investors, including the billionaire Carl Icahn, to step up its programme to sell assets to reduce debt.
Yesterday, the firm said its share of UK production dropped 33% in the quarter, due to scheduled turnarounds but also “reliability issues resulting in higher operating costs”.
It said its Claymore platform remained shut down for the entire quarter due to “unexpected repairs”, adding that production is expected to resume by the end of March.
A planned turnaround at the Piper platform was extended by a month, but has since returned to production, it added. Jeff Martin, a Calgary-based analyst at Peters & Co wrote a note which said: “During the fourth quarter, the company experienced more downtime and operational issues in the North Sea, with some of these issues over the past year potentially increasing future capital and abandonment costs.” Mr Kvisle had said in November the company plans to “dilute and exit” its North Sea business as concerns emerged the company was having difficulty finding a suitable buyer.
Mike Tholen, Oil & Gas UK’s economics director, said: “Exploration and production companies continually adjust their international portfolios to support their corporate strategies.
“While we believe significant opportunities remain, the UKCS will nevertheless continue to need to remain competitive if it is to secure international investment and all parties are aware of this imperative.”
Talisman employs 2,700 and operates 11 platforms in the UK North Sea.