- Talisman 2010 Highlights
- About Our Company
- Financial and Operating Highlights
- President's Message
- Where We Operate
- Looking to 2011
- Management's Discussion and Analysis
- 2010 Performance
- 2010 Net Income Variance
- Continuing Operations Review
- Acquisitions
- Discontinued Operations
- Reserves Replacement
- Liquidity and Capital Resources
- Sensitivities
- Commitments and Off-Balance Sheet Arrangements
- Risk Management
- Summary of Quarterly Results
- Outlook for 2011
- Internal Control Over Financial Reporting and Disclosure Controls and Procedures
- Litigation
- Application of Critical Accounting Policies and Use of Estimates
- Changes in Reporting Conventions
- New US Accounting Pronouncements
- New Regulatory Developments
- International Financial Reporting Standards (IFRS)
- Risk Factors
- Advisories
- Abbreviations and Definitions
- Consolidated Financial Statements
- Report of Management
- Management Report on Internal Control Over Financial Reporting
- Independent Auditors' Report on Internal Controls Under Standards of the Public Company Accounting Oversight Board (United States)
- Independent Auditors' Report of Registered Public Accounting Firm
- Consolidated Balance Sheets
- Consolidated Statements of Income
- Consolidated Statements of Comprehensive Income (Loss)
- Consolidated Statements of Changes in Shareholders' Equity
- Consolidated Statements of Cash Flows
- Notes to the Consolidated Financial Statements
- Supplementary Oil and Gas Information
- Results of Operations from Oil and Gas Producing Activities
- Capitalized Costs Relating to Oil and Gas Activities
- Costs Incurred in Oil and Gas Activities
- Standardized Measure of Discounted Future Net Cash Flows from Proved Reserves
- Discounted Future Net Cash Flows from Proved Reserves
- Principal Sources of Changes in Discounted Cash Flows
- Continuity of Net Proved Reserves 1
- Additional Information
- Detailed Property Reviews
- Governance
- Investor Information
- Corporate Information
- Advisories
- Market Information
| (millions of C$) | |
|---|---|
| 2009 net income | 437 |
| Favourable (unfavourable) variances: | |
| Commodity prices | 991 |
| Production volumes | 196 |
| Unlifted oil | (122) |
| Royalties | (209) |
| Operating expenses | (6) |
| G&A | (58) |
| DD&A expense | 196 |
| Dry hole expense | 416 |
| Exploration expense | (83) |
| Interest on long-term debt | 29 |
| Stockbased compensation expense | 89 |
| Gain/Loss on held-for-trading financial instruments | 514 |
| Current taxes (including Petroleum Revenue Tax (PRT)) | (363) |
| Future taxes (including PRT) | (367) |
| Discontinued operations | (855) |
| Other | (157) |
| Total variances | 211 |
| 2010 net income | 648 |
The significant variances from 2009 as summarized in the net income variances table are:
- higher oil and gas revenue reflecting higher average commodity prices;
- higher natural gas volumes due principally to shale drilling in North America and successful development in Scandinavia and Southeast Asia;
- lower DD&A expense due principally to higher reserves and the strengthening of the C$;
- lower dry hole expense, significant write-offs having occurred in North American conventional and Vietnam in 2009;
- a gain on commodity price derivatives, compared to a loss in 2009;
- increased taxes as a result of higher pre-tax income, proportionally higher income in higher tax jurisdictions, a legislative change in respect of the taxation of cash-settled stockbased compensation and lower North Sea capital expenditure in the fourth quarter of 2010; and
- a decrease in income from discontinued operations having closed transactions in 2010 for an aggregate gain of $168 million, compared to $1.1 billion in 2009. Continuing Operations Review Results Summary Gross sales of oil, liquids and natural gas in 2010 were $8.1 billion, an increase of 15% from 2009. Oil and liquids revenue increased $597 million and natural gas revenue increased $590 million due to higher prices and increased production. Reported amounts were impacted by the strengthening C$.
During 2010, North America pre-tax segmented income was $270 million, compared to a loss of $76 million in 2009. Gross sales in North America increased 18% to $1.7 billion due to higher commodity prices and increased shale activity.
In the UK, pre-tax segmented income was $746 million, up 98% from $377 million in 2009 due to lower DD&A expense and the weakening of the UK£ relative to the C$. UK gross sales remained relatively consistent with 2009 at $2.2 billion.
In Scandinavia, pre-tax segmented income increased 159% to $409 million, up from $158 million in 2009. Scandinavia gross sales increased 41% to $1.4 billion as a result of higher oil prices and increased production.
Southeast Asia pre-tax segmented income increased 135% to $685 million, up from $291 million in 2009. Gross sales of $2.4 billion were 19% higher than 2009 due to the impact of higher commodity prices and increased gas production.