Talisman sharpens North American shales focus

Talisman Energy Inc., Calgary, said 80% of its $629 million of capital spending in the quarter ended Sept. 30 was related to shale activities in North America.

The company continued to focus on the development of high-quality shale plays in the Eagle Ford, Marcellus, and Montney formations and on liquids-rich opportunities its Canadian conventional portfolio.

Shale production more than doubled year on year and will account for more than half of North American production volumes at the end of 2011, the company said. Talisman is operating 30 rigs, leading to expected shale production of 490 MMcfd of gas equivalent in 2011, up 125% from 2010.

The company brought 34 net Marcellus shale wells onstream in the quarter and will continue to operate with 11 rigs for the rest of the year. Talisman expects Marcellus production to average 400 MMcfd in 2011, the upper end of the target range set at the beginning of the year.

Talisman has 11 rigs actively drilling to the Montney in the Farrell Creek area and is on track to meet its full-year production guidance of 50-60 MMcfe/d there. It expanded the Farrell Creek facility to handle 180 MMcfd during the quarter.

Talisman will increase to 10 drilling rigs in the Eagle Ford in the fourth quarter and has two full-time frac crews operating. Well results are in line with expectations, and production is expected to average 30 MMcfe/d in 2011.

The company is drilling its first horizontal pilot well in the Duvernay shale in Canada.

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