Talisman Energy's First-quarter Profit Increased by 164%

Talisman Energy Inc. (TSX code: TLM) first-quarter profit increased by 520 million yuan, and stock dividends increased by nearly 17%.

Talisman, one of Canada's largest oil and gas companies, announced on Wednesday that its board of directors approved a plan to increase its semi-annual dividend by 16.8% to 8.75 cents per share.

This move can be said to be a rising tide that lifts all boats. The company's first-quarter profit increased by 164% compared with the same period last year, reaching 520 million yuan. The bumper quarterly earnings were tied to asset sales.

However, the sale of assets also led to a decline in production and the company's cash flow decreased by 25%.

Calgary-based Talisman is Canada's third-largest independent producer. It believes the asset sales have reduced production by 10% from last year, to the equivalent of 485,000 barrels of petroleum products per day. In addition, the company reported success with its drilling program in North America, including three wells in Alaska.

The company said in its accounting report that net income for the quarter ended March 31 was equivalent to 49 cents per share, compared with 18 cents per share in the same period last year. The increase in profit was mainly due to the sale of an asset worth 277 million yuan (after tax); while the performance a year ago was affected by the increase in British import taxes, which paid a charge of 325 million yuan.

Cash flow this quarter decreased by 25% compared with the same period last year, only 1 billion yuan. Of that amount, $77 million is a cash tax on the sale of the Syncrude oil sands project.

Late Tuesday, Talisman announced it would begin extracting oil from the Tweedsmuir project in the North Sea. The $850 million project is expected to produce an average of 46,000 barrels of oil per day by 2008.

In the earnings report, Talisman said its oil and liquid products averaged 251,893 barrels per day, down 16%; natural gas production averaged 1.3 billion cubic feet per day, down 2%.

Jim Buckee, the company's administrative director, also introduced that the company successfully drilled two oil wells in Norway, and drilling in Vietnam confirmed that there is rich potential. The company is also preparing to sell natural gas to West Java in Indonesia for the first time, and its projects in Malaysia/Vietnam are also Goes smoothly.

In North America, the company continues to develop natural gas production capabilities with new discoveries in the Appalachians, British Columbia and Alberta.

Talisman is a major natural gas producer in Western Canada, operating oil and gas businesses in the North Sea, Southeast Asia, Australia, North Africa, the United States and Trinidad and Tobago.

On Wednesday's Toronto stock market, Talisman's shares fell 66 cents to $21.22.