Talisman Energy Sets 2012 Eagle Ford Shale Budget - $500 Million

Talisman Energy expects to spend more than US$4 billion in 2012 and spending in the liquids-rich Eagle Ford Shale play will increase from $350 million in 2011 to $500 million. The company operates 10 Eagle Ford drilling rigs currently and plans to ramp up to 14 by the end of 2012. The increase in spending in South Texas comes on the back of a decrease in spending across North America. Talisman will spend $1.8 billion in North America in 2012 versus $2.2 billion in 2011. The cut is largely the result of less activity in dry gas plays that are challenged in the current $3/mmbtu natural gas environment. The company expressed a belief that natural gas prices will remain at depressed prices for some time.

Talisman's North America portfolio is centered in the Eagle Ford, Marcellus, and Canadian shale plays. Talisman acts as the operator for the joint venture with Statoil where the companies jointly own acreage covering much of the liquids-condensate window in the play.

"We expect to spend approximately $4 billion in cash capital expenditures this year. We are reducing capital spending in dry gas plays in North America, which accounts for the majority of the decrease over 2011. Underpinning this is a belief that North American gas prices will remain low for some time; we have also assumed a relatively conservative oil price forecast.

Read more at talisman-energy.com