Zedi Inc ZEDIF

case in point

[cryton]

Talisman Energy plots path for prudence By The Canadian Press - For Business Edge Published: 11/10/2006 - Vol. 6, No. 23 -------------------------------------------------------------------------------- Talisman Energy Inc. is deferring $1 billion in exploration projects in 2007, the latest oil and gas producer to pull back on drilling amid high costs for labour and equipment. "It's the opposite of growth at any cost," CEO Jim Buckee said last week, after the Calgary-based company (TSX:TLM) reported its third-quarter profit soared 22 per cent to $524 million. "They're all good projects, but we rank them by capital efficiency and ... we see very heated market conditions," Buckee told a conference call of analysts. "We've decided to be more prudent." Core gas drilling programs will continue, including in the foothills of western Alberta and the Appalachian basin of New York state, which is up to three wells. Buckee said the cuts will be split between Talisman's assets: about half in Canada and half elsewhere in the world, including the North Sea. Talisman expects to spend $4.8 billion on exploration in 2007, the same amount as 2006. But given the spiralling costs for drilling and other services in the energy industry, Buckee said that's a real decrease of between 10 and 15 per cent. Two of Talisman's larger competitors in the Canadian oilpatch - EnCana Corp. (TSX:ECA) and Canadian Natural Resources (TSX: CNQ) - have cut their drilling plans for 2007, citing rapidly escalating costs and softer natural gas prices. "There are some early signs that drilling cost pressures are abating, but services and equipment remain tight," said Buckee. Infrastructure construction costs have jumped 40 per cent in the last three years with no signs of relief. But the biggest problem is lead time for things like compressors, which are key to pumping and shipping natural gas.