- 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
As part of its normal business, the Company has entered into arrangements and incurred obligations that will impact the Company’s future operations and liquidity, some of which are reflected as liabilities in the Consolidated Financial Statements at year-end. The principal commitments of the Company are in the form of debt repayments; abandonment obligations; lease commitments relating to corporate offices and ocean-going vessels; firm commitments for gathering, processing and transmission services; minimum work commitments under various international agreements; other service contracts and fixed price commodity sales contracts.
Additional disclosure of the Company’s abandonment obligations, debt repayment obligations and significant commitments can be found in notes 9, 10 and 16, respectively, to the Consolidated Financial Statements. A discussion of the Company’s derivative financial instruments and commodity sales contracts can be found in the ‘Risk Management’ section of this MD&A.
The following table includes the Company’s gross long-term debt, abandonment obligations, stock-based compensation, operating and capital leases and other expected future payment commitments as at December 31, 2010 and estimated timing of such payments:
| Payments due by period 1,2 (millions of C$) | ||||||
|---|---|---|---|---|---|---|
| Commitments | Liability recognized in balance sheet | Total | Less than 1 year | 1-3 years | 4-5 years | 5 years |
| Gross long-term debt | Yes – Liability | 4,225 | 357 | 15 | 443 | 3,410 |
| Abandonment obligations 3 | Yes – Partially accrued | 4,476 | 18 | 53 | 186 | 4,219 |
| Office leases | No | 204 | 43 | 71 | 47 | 43 |
| Vessel leases | No | 635 | 251 | 198 | 174 | 12 |
| Capital lease obligations | Yes – Partially accrued | 131 | 18 | 36 | 36 | 41 |
| Transportation and processing commitments 4 | No | 1,341 | 158 | 277 | 227 | 679 |
| Minimum work commitments | No | 866 | 442 | 347 | 77 | – |
| Other service contracts 5 | No | 853 | 525 | 221 | 90 | 17 |
| Stock‑based compensation 6 | Yes – Liability | 404 | 360 | 44 | – | – |
| Total | 13,135 | 2,172 | 1,262 | 1,280 | 8,421 | |
- Payments exclude ongoing operating costs related to certain leases, interest on long-term debt and payments made to settle derivative contracts.
- Payments denominated in foreign currencies have been translated at the December 31, 2010 exchange rate.
- The abandonment obligation represents management’s probability weighted, undiscounted best estimate of the cost and timing of future dismantlement, site restoration and abandonment obligations based on engineering estimates and in accordance with existing legislation and industry practice.
- Certain of the Company’s transportation commitments are tied to firm gas sales contracts.
- Other service contracts includes drilling rig commitments to meet a portion of the Company’s future drilling requirements.
- The liability for stock-based compensation recognized on the balance sheet is based on the Company’s year-end stock price and the number of stock options and cash units outstanding, adjusted for vesting terms. The amount included in this table includes the full value of unvested stock options and cash units. Timing of payments is based on vesting and expiry. Actual payments are dependent on the Company’s stock price at the time of exercise.
There have been no significant changes in the Company’s expected future payment commitments, and the timing of those payments, since December 31, 2010.