2010 Performance

  • Cash provided by operating activities was $3.5 billion, down 4% from 2009, due to higher cash taxes in 2010 and lower cash proceeds from financial instruments;
  • Net income was $648 million, a 48% increase from the previous year due to higher commodity prices, improved operating performance and non-cash gains on derivatives;
  • Talisman maintained capital discipline, reducing capital spending by 6% during 2010, to $4 billion;
  • Production averaged 417,000 boe/d, significantly above initial guidance. Excluding asset sales, year on year production increased 7%, with fourth quarter volumes 10% higher than 2009;
  • Talisman replaced 164% of production with proved reserves excluding price revisions, achieving a 35% reduction in replacement costs compared to 2009 and a 63% reduction over the past two years. Proved developed producing replacement costs were 54% lower than 2009;
  • Talisman sold over $2 billion in non-core assets in 2010, predominantly North American natural gas properties;
  • Talisman entered into a strategic partnership with Sasol Limited, selling them a 50% interest in the Company’s Farrell Creek shale play in British Columbia;
  • The Company acquired assets in two liquids areas, establishing a material position in the liquids rich window in the Eagle Ford shale play in Texas and also acquired producing assets with significant upside in Colombia; and
  • Talisman made a number of exploration discoveries in Latin America, including an oil discovery and several successful stratigraphic tests in Colombia.

Financial and Operating Highlights

(millions of C$, unless otherwise stated) 2010 20091 20081
Cash provided by operating activities 3,460 3,599 6,154
Cash provided by continuing operations 3,270 3,214 5,122
Net income 648 437 3,519
Income (loss) from continuing operations 408 (658) 2,879
Income from discontinued operations 240 1,095 640
Common share dividends 254 229 204
Per share ($)
Net income 0.64 0.43 3.46
Diluted net income 0.62 0.43 3.40
Income (loss) from continuing operations 0.40 (0.65) 2.83
Income from discontinued operations 0.24 1.08 0.63
Common share dividends 0.25 0.225 0.20
Production (mboe/d) 417 425 432
Production from continuing operations (mboe/d) 390 365 355
Average sales price ($/boe) 55.37 49.40 76.03
Gross sales2 8,076 7,011 10,269
Total revenue2 6,912 6,061 8,554
Operating costs ($/boe) 12.80 12.91 13.57
Depreciation, depletion and amortization (DD&A) expense, exploration and dry hole expense2 2,671 3,200 3,477
Total exploration and development spending2 3,935 3,784 4,395
Total assets 24,193 23,618 24,275
Total long-term debt (including current portion) 4,181 3,780 3,961
Cash and cash equivalents, net of bank indebtedness2 1,644 1,654 10
Total long-term liabilities 10,313 9,906 10,307
Proved reserves additions, net of revisions (before acquisitions and divestitures) (mmboe) 271 251 (41)
Reserves replacement ratio (before acquisitions and dispositions) – including price revisions3 178% 162% (26%)
Proved reserves (mmboe) 1,383 1,411 1,434
Reserves replacement ratio (before acquisitions and dispositions) – excluding price revisions3 164% 112% 75%
  1. Prior years have been restated to present the effect of discontinued operations. See note 3 to the Consolidated Financial Statements.
  2. From continuing operations.
  3. Based on SEC reserves. See the ‘Reserves Replacement’ section of this MD&A for method of calculation.