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Analyst Actions: Talisman Energy Keeps Outperform Rating at Credit Suisse

Credit Suisse says guidance in Line with Expectations: "Talisman has announced its capital program for 2013, with plans to spend US$3 billion, down 25% from the US$4 billion spent in 2012. Capex guidance is in line with our US$2,996 million forecast and consensus of US$3,034 million. ~90% of capital is directed at liquids and international gas, with the majority spent in two core regions - Americas (North America + Colombia) + Asia-Pacific. On production, Talisman expects 2013 production to average 375k-395 kboe/d, in line with both our 383.9 kboe/d forecast and consensus of 384.7 kboe/d (See full report). Guidance for US$2.5 billion of CF in 2013 is based on US$90 WTI/US$105 Brent/US$3.60 NYMEX. Adjusting our US$2.8 billion CF forecast (based upon US$102.75 WTI/US$115.00 Brent/US$3.70 NYMEX), to Talisman's Guidance price deck, we get US$2.5 billion of CF."

Commitment to Unlock NAV: "Talisman has announced a commitment for US$2-3 billion of dispositions or joint ventures over the next 12-18 months to unlock value NAV in long-dated plays that generate little to no cash flow."

"Specifically, the asset sales/joint ventures will comprise of: (i) US$1-1.5 billion in North America; (ii) Actively marketing North Duvernay shale and parts of the Montney; and, (iii) US$1-1.5 billion of international assets. Talisman notes that options for proceeds include debt reduction and increasing cash flow per share through short-term development spending or share repurchases."

Reducing Exploration + G&A: "Talisman remains committed to reduce G&A, with a target to reduce costs by US$100-$150 million annually off its total G&A expense of US$510 million in 2012, in line with our US$400 million 2014 forecast. Exploration has also been cut in half, and is directed primarily at proving up oil potential in Colombia, Kurdistan and Asia-Pacific."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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