Talisman budgets $5.2B in capital spending

Calgary-based Talisman Energy Inc. planscapital spending of $5.2 billion this year, the oil and gas company announced Monday.

That would be a 10 per cent increase over 2009.

Talisman said it will devote $1.6 billion to shale gas projects in North America. New technology has opened up previously inaccessible shale formations.

Close to $1 billion has been budgeted for the Marcellus formation in Pennsylvania and $550 million for the Montney formation in northeastern British Columbia and northwestern Alberta.

"We will also be examining for sale additional non-core conventional assets in North America and continue to enhance our international exploration portfolio and capabilities as we build on last year's success," said president and chief executive John Manzoni in a release.

"The second priority will be to continue the focus on returns and profitability."

The company said it will fund the capital spending from operating cash flow and from the sale of properties not central to its business. Other detailsin its spending plans include:

• Testing its first horizontal pilot well in a shale gas formation in Quebec, with plans for another two horizontal wells later this year.
• $270 million on conventional oil and gas properties in Canada.
• $800 million in the U.K. North Sea.
• $550 million on development projects in Norway.
• $780 million on developing properties in Southeast Asia.
• $700 millionon other international exploration projects.

Talisman shares closeddown 73 cents at $19.85 Monday.