"Bigger is better" is the operating mindset for many corporate
executives, but that's not always the winning strategy in the energy
sector. With share price performance often closely tied to debt-adjusted
production growth, it can make quite a bit of sense to jettison assets
that don't offer much production growth upside and/or those that require
substantial investments to maintain or develop.
That brings me to the Talisman Energy (TLM)
situation. While the company has legitimately interesting assets in
North and South America as well as Southeast Asia, the company's North
Sea assets are little more than an albatross around its neck. Talisman
shares do appear to be trading below fair value, and the company appears
quite committed to both asset sales and cost reductions, but there
isn't any particular shortage of interesting ideas in the energy sector
today.
Follow this link to the full article:
Talisman Energy Aims To Shrink And Grow Rich
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