Oil and gas operator Talisman announced a 29% slump in its North Sea production in first quarter results today.
Output from its North Sea operations dropped to 96,000 barrels of oil equivalent (boe) per day, from 136,000 in the first quarter of 2011.
The region fell to just 20% of the firm’s total production of 462,000 boe per day, compared with 30% a year ago, as North American and south-east Asian production rose.
Talisman’s North Sea operating costs rose to £22 a barrel, from £14 a year earlier, and accounted for more than half of the company-wide figure of £354million in the first quarter of this year
The firm said the North Sea production slump was due to “natural declines” on its Auk North and Tweedsmuir fields, subsea mechanical issues on Auk North, a safety related shutdown on Tartan and compressor issues on Claymore.
Talisman said costs were also impacted by increased maintenance charges on its Piper, Tartan, Monarb and Gyda installations.
It said it spent £140million on its Yme, Auk North and Auk South development projects, a compression replacement project on Claymore, the MonArb (Montrose/Arbroath area) redevelopment and well intervention on Tartan in the quarter.
However, future production from Yme was being removed from projections. Yme is the subject of arbitration with the platform contractor due to “significant delays and cost overruns” as well as issues over needing to meet Norwegian regulatory specifications, the firm said.
Group production rose 4% on higher volumes from North American shale and growth in south-east Asia.
The firm said it was cutting investment in North American gas, prices for which have slumped.
Net losses of £200million in the first quarter of 2011 were turned around to net profits of £180million this time, mostly due to the sales of non-core assets.
The firm said it was still due to sell £9.2million worth of North Sea assets during the second quarter – it has previously said it would sell some equity in non-operated assets.