In North America, Talisman continues to focus on its gas
strategy, which has proven successful in developing deep
complex reservoirs in the Monkman area and the Alberta
Foothills, as well as tighter gas opportunities. Talisman has
built a substantial high working interest land position supported
by Talisman-operated infrastructure. In addition, the Company
is developing a multi-zone play in the Outer Foothills and
progressing initiatives to evaluate its unconventional acreage.
North America
2007 in Review
Talisman spent $1.8 billion during 2007 in North America, replacing 112% of natural gas production with proved reserves, before net acquisitions and dispositions.Capital spending in North America was reduced in 2007, due to volatile natural gas prices, higher costs and the proposed change in royalty calculations in Alberta. The Company drilled 288 gross natural gas wells and 128 gross oil wells, adding 357 bcf of proved natural gas reserves. At year end, the Company had 2.7 tcf of proved natural gas reserves. Talisman added 75 mmboe of proved reserves (before net acquisitions and dispositions) and had 601 mmboe of proved reserves at year end.
Natural gas production averaged 876 mmcf/d, compared to 910 mmcf/d in 2006, with liquids production averaging 43,299 bbls/d, compared to 49,846 bbls/d (excluding synthetic) in 2006. Talisman disposed of a number of low working interest properties in 2007, which reduced production by 10,200 boe/d for the year (41 mmcf/d of gas and 3,400 bbls/d of liquids). The Company also sold its Syncrude interest at the beginning of 2007.
Unit operating costs averaged $7.79/boe, up from $6.95/boe in 2006, mainly due to increased processing, lease and road maintenance and chemical costs.
Talisman Midstream operations completed the Berland West Gas Plant, Palliser Interconnect and Deep Basin expansions and transported a record 650 mmcf/d in December.
In 2007, Talisman had continued success in the Alberta Foothills with its drilling program resulting in a new production record of 229 mmcf/d sales gas in December. Also in the Alberta Foothills, the Ram River facilities came on line in May, slightly ahead of schedule. Development success resulted in a new production record at Bigstone of 69 mmcf/d sales gas in December.
A new discovery in Northern BC Foothills was announced, which tested at restricted rates of 21-25 mmcf/d gross raw gas (Talisman 50%) and is expected to come on production in the second quarter of 2008.
In the multi-zone Outer Foothills play, Talisman had successful drilling results in the Hinton, Soloman and Ojay areas.
In January 2008, Talisman reached an agreement with RSX Energy Inc. (RSX) on the terms of a cash offer for all the outstanding shares of RSX. RSX’s principal natural gas assets are located in the Outer Foothills and Peace River Arch areas of Northern Alberta. Talisman subsequently acquired control of RSX on March 5, 2008.