Talisman Energy's (TLM) disappointing 2007 results can be chalked up to a "year of transition" at the oil and gas producer, according to Canaccord Adams analyst Terry Peters.
"2007 was a transition year for Talisman and the company is taking a measured approach to growth in 2008," the analyst told clients in a report. He noted that Talisman disposed of assets producing 20,000 barrels of oil equivalent per day, in the North Sea and Canada, during the year and also appointed a new CEO in John Manzoni to replace Jim Buckee who is retiring.
Going forward, he said the company is expected to grow approximately 3 to 8% in 2008 and 5 to 10% in 2009 and 2010. Talisman is also in the process of conducting a strategic review of its operations to help unlock growth in the long term.
Mr. Peters wrote:
The market is currently taking a cautious, wait-and-see approach to Talisman. We believe that Talisman has a good exploration portfolio with a decent track record of reserves, production and cash flow growth.
He maintained his "buy" rating but reduced his target price from C$20 to C$19.50.