With Talisman Energy Inc.'s (TLM) fourth quarter now in the past, all eyes are turning to the future and the completion of the company's strategic review expected in the next quarter.
UBS analyst Andrew Potter said the most likely outcome of the review is renewed interest in long-life projects and increasing long-term growth visibility.
In a note to clients he said:
We expect unconventional natural gas to figure large in the revised strategy. Additionally we would not be surprised to see the company be active in the acquisition market to bolster its presence in existing strategic regions (Southeast Asia or North Africa) or establish new ones (unconventional gas or oil sands).
The analyst told clients to also expect detailed evaluation programs on Talisman's strong land positions in Western Canada and New York state, including the highly touted Montney shale play in northwest British Columbia.
Mr. Potter was disappointed with Talisman's fourth quarter results out Thursday saying cash flow and operating earnings of C$0.97 per share and C$0.16 per share respectively were lower than expectations.
He also lowered his production, cash flow and earnings estimates for 2008 and 2009, blaming the lower production estimates on reduced North Sea oil growth expectations. His "buy" rating and C$22 price target on the stock remains unchanged.