Diversified upstream oil and gas company Talisman Energy Inc. (TLM,TLM.TO) said Monday that its capital spending for fiscal 2010 will rise by over 10% from the prior year, due to increase in shale drilling in North America and higher development spending in Southeast Asia and the North Sea. Calgary, Canada-based company expects capital spending of C$5.2 billion for the year 2010. Talisman said the C$4.9 billion in cash spending will be funded from operating cash flow, non-core asset sales and balance sheet strength. According to the company, about C$300 million of the capital budget consists of non-cash items.
John John Manzoni, president and chief executive officer said, "We have designed the program to be robust at US$60/bbl oil prices and US$3.50/mmbtu natural gas prices, with considerable flexibility to adjust the capital program up or down in light of conditions throughout the year." The company will direct about 85% of the capital towards development programs and 15% towards international exploration. Within the development portfolio, the company will allocate 36% towards shale programs in North America, 19% for Norway, 18% for the UK, 18% for Southeast Asia, 6% for North American conventional gas and 3% for the rest of world. Talisman expects to spend C$1.6 billion on shale programs this year, similar to last year and noted that 2009 included substantial amounts for strategic land acquisitions. However, the company said that spending on land will be significantly less during the current year.
In North America, the company plans to spend C$1.9 billion in 2010, of which, about C$1.6 billion has been allocated toward shale programs, primarily in the Pennsylvania Marcellus and Montney. "Our main priority in 2010 will be continuing the portfolio transition, in particular ramping up development of the Marcellus and Montney shale plays. We will also be examining for sale additional non-core conventional assets in North America and continue to enhance our international exploration portfolio and capabilities as we build on last year's success," Manzoni stated. According to the company, drilling in the Marcellus and Montney shale plays is expected to more than double to over 200 development and pilot wells from roughly 70 development and pilot wells in 2009. In the North Sea, the company anticipates 2010 capital spending to be C$1.8 billion, of which C$160 million will be directed towards exploration. The plan also includes C$300 million of non-cash capital spending in Norway. Talisman plans to spend C$1.1 billion in Southeast Asia, with exploration spending accounting for C$280 million or 26% of the total. Almost half of the C$800 million in UK development spending is slated for the Auk North and Auk South field developments, the company noted. Talisman intends international exploration budget for the fiscal to be C$700 million, with two-thirds allocated to build new core areas and one-third to support existing core areas. The company said its second priority will be to continue focus on returns and profitability. The company expects increased returns as it successfully cycle capital into higher value investments, which will also lead to continued improvement in F&D costs. Talisman anticipates its finding and development or F&D costs to fall in 2009 and again in 2010. "Third, we will continue to build our organizational capability. Our executive team was strengthened last year with the addition of Paul Smith, Richard Herbert and Nick Walker at the executive level, as well as significant new talent across the organization, including new country managers for Malaysia and PNG. We will continue to upgrade our capabilities and processes, and develop our talent across the organization in 2010," added Manzoni. Further, the company expects production in 2010 to be broadly the same as 2009 at around 425 thousand boe/d, excluding any sales in North America during the year. Also, the underlying production volumes will be flat in 2010. Talisman plans to issue its fiscal 2009 results on February 10.
TLM closed Friday's regular trading at $19.98 on the NYSE. In the past 52 weeks, the shares have been trading in a range of $7.97-$19.98. TLM.TO ended on Friday at C$20.58. For the past one year, the shares traded between C$9.92 and C$20.59 on the Toronto Stock Exchange.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.