ALBERTA

Job cuts looming as Talisman Energy looks to rein in costs, exit countries

01/24/2013 05:58 EST | Updated 03/26/2013 05:12 EDT
CALGARY - Job cuts are looming at Talisman Energy Inc. as the international oil and gas producer exits high-risk exploration areas and seeks ways to reduce costs.

The Calgary-based company (TSX:TLM) is aiming for a 20 per cent reduction to the $1.3 billion it spends on general and administrative expenses annually, Helen Wesley, executive vice-president of corporate services, told a CIBC investment conference in Whistler, B.C., on Thursday.

The cost-cutting will come through "a combination of both people and indirect costs," she said.

Talisman had for years been in growth mode, but under new CEO Hal Kvisle the focus has turned to "rationalizing" its costs.

In September, Talisman replaced then-CEO John Manzoni with Kvisle, a former TransCanada Corp. (TSX:TRP) CEO, as it signalled a change in strategic direction.

Kvisle, who had served on Talisman's board, has promised the company will "live within our means" and focus less on risky exploration projects.

Its capital budget has been cut by a quarter to about $3 billion, just 10 to 15 per cent of which will be targeted toward exploration.

Talisman has already announced it is winding down its operations in Peru, where it was not able to establish a big enough resource to make it worth its while. It is likely to do the same in Poland, which has a nascent shale gas industry.

Talisman shares rose one per cent, 14 cents, to $12.20 on the Toronto Stock Exchange on Thursday.

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