Talisman Energy: Lord Stanley, No; Lord Marcellus, Yes

The last year a Canadian hockey team won the cup (Canadiens '92-'93) was the year that Talisman Energy (TLM) was formed.  While US hockey teams have been skating into the back door and snatching ole Lord Stanley for those fifteen years, the $US 24 billion Canadian gas producer has been skating into the US and snatching up a very nice chunk of the Marcellus shale.

While doing some background work for the recent Talisman Energy/Hallwood announcement, I found the company listing a substantial 640,000 acre position in the Marcellus play. This makes them the #3 holder behind Chesapeake (CHK) and Range (RRC). According to Talisman's June presentation, most of the acreage spans the NY-PA border with some in southwestern PA around Range Resources' highly successful horizontal completions. Furthermore, Talisman's Fortuna Energy unit [FEI] is heralded as the #1 producer of natural gas in New York state indicating that the infrastructure critical to developing the Marcellus is already in place.

Talisman's Fortuna Energy [FEI] unit currently has only 17 active well sites in Pennsylvania but with 20 vertical test wells drilled since '06 and plans to drill 4 more and 20 horizontals in the play by the end of next year, Canada promises to be a serious contender for the Marcellus Cup.

Disclosure: none

Comments

[CRYSBALL]

TLM has a great resource position, but a POOR track record realizing production from the reserves................. article touts their reserve positon, however, the absence of production results speaks volumes...........henc... the drag on the stock.

[steve Ward]

TLM under Dr. Buckee preferred to drill deep for gas and in fact TLM is the deepest driller for gas in Canada. Dr. Buckee was well known for his charts and diagrams demonstrating present value was always greater with deep gas than unconventional gas such as shale and tight sands gas. Apparently, Dr. Buckee knew that gas prices would rise to such a degree that unconventional gas would be profitable on a present value cash flow basis. How else does one explain such a high acreage position with the new CEO not there but shy of one year.

What a turnabout from Dr. Buckee's legacy.