Nov 4 (Reuters) – Canadian oil producer Talisman Energy Inc reported a bigger-than-expected quarterly profit as tight cost controls helped offset lower oil and gas prices.
Talisman, which is reorganizing operations and selling assets to boost its share price, also trimmed its capital budget for the year to about $3 billion from $3.2 billion.
Weak oil and gas prices have been weighing on the company, dragging down cash flow, a key indicator of its ability to fund new projects and drilling.
Talisman's cash flow fell 11.5 percent to $507 million, or 49 cents per share, in the third quarter ended Sept. 30, and the company warned of lower cash flow in the fourth quarter as well.
Global crude prices have slipped by about 25 percent since touching a high of $115 in June, hurt by excess supply, including from North American shale fields, and weak demand from China and Europe. Natural gas prices have also been depressed due to a supply glut in North America.
The impact of weak prices and a 5 percent fall in Talisman's third-quarter production was offset by a 49 percent fall in the company's expenses and gains on commodity derivatives.
Talisman earned $425 million, or 38 cents per share, in the quarter, compared with a loss of $54 million, or 8 cents per share, a year earlier.
Excluding the gain on commodity derivatives and other items, profit was 5 cents per share, above analysts' average estimate of 2 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue and other income fell nearly 8.7 percent to $1.14 billion, missing the average analyst estimate of $1.4 billion.
Production averaged 353,000 barrels of oil equivalent per day (boepd), down from 371,000 boepd a year earlier.
Up to Monday's close of C$6.92, Talisman shares had nearly halved in the past 12 months.
(Reporting by Manya Venkatesh in Bangalore; Editing by Savio D'Souza)
Copyright 2016 Thomson Reuters. Click for Restrictions.
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