CALGARY - Talisman Energy Ltd. (TSX:TLM) says it's installing industry veteran Hal Kvisle as its new CEO because the Calgary-based oil and gas company needs a different leadership approach as it shifts strategic direction.
Kvisle, a familiar face in the industry after leading TransCanada Corp. (TSX:TRP) for many years, is coming out of retirement to take the reins of a company that has been dogged by operational issues and repeatedly missed production targets.
The company announced Monday that John Manzoni, who joined Talisman in 2007, had agreed to leave the post, effective immediately.
Talisman has been undergoing a transition over the past several months, directing capital away from dry natural gas in the face of low prices, selling non-core assets and working to improve project execution.
"The board and management team have been reviewing the strategic direction of the company, and given the transition, took the decision that it was the right time for a new leader to drive the next phase of growth," said Talisman spokeswoman Pheobe Buckland.
"In a company's evolution, different leaders are needed at different times."
Shortly after Manzoni became CEO, he signalled a shift toward a more focused company. He highlighted three key strategic areas: North American shale natural gas, offshore production in the North Sea and development in Southeast Asia.
"John made a significant contribution to the company. He'd been in the role of CEO for five years and during that time he was really focused on providing long-term production potential for the company," said Buckland.
John Stephenson, portfolio manager at First Asset Investment Management in Toronto, said Manzoni was a "disappointment" to investors and the stock has been "a dog" for a long time.
"It sort of devolved into kind of a grab bag like it was before and I think he really had trouble impressing people that he had a coherent strategy. We hoped that he would, but we don't think that really came out," he said.
"I think he showed some promise a year or so into his mandate, or two years into his mandate, but then it really fell off the wagon."
Another mid-sized Canadian oil and gas company, Nexen Inc. (TSX:NXY), has been the subject of similar criticism to Talisman — a lack of focus and operational issues.
Nexen has been tentatively sold for $15.1 billion to China National Offshore Oil Corp. — subject to various approvals, including from the federal government.
Stephenson said he sees Talisman as another potential takeover candidate.
Talisman stock rose three per cent Monday to $14.29 in mid-day trading on the Toronto Stock Exchange.
"I think it's running a bit today on the news and I think you might see it run a little more. But it's hard to see how this thing's got much more than $16.50 in it — unless somebody comes in with an incredible offer like a CNOOC for Nexen," said Stephenson.