Talisman in Talks to Pare Stake in Kurdistan Assets”


Summary-

The article titled with, “Talisman in Talks to Pare Stake in Kurdistan Assets” appeared in Wall Street Journal on 10/8/13 12:24 AM, later on updated on September 20, 2013, 2:41 p.m. ET. The article was written by CHESTER DAWSON focusing on the issue of Oil Projects in Northern Iraq and their stages of development. The company named Canada's Talisman Energy Inc is going through financial trouble so the company is planning to sell potential oil-producing region of Kurdistan in northern Iraq. The company’s position is down due to slump in North American Natural gas prices so the company decided to sell the two active exploration sites. The two blocks is having in partnership with another Canadian Company WesternZagros Limited having 40 percent in one and 60 percent in another, the ret share belong to government. The financial crisis has forced the company to go for cost cutting and selling the two potential gas-producing blocks in Kurdistan Iraq. The move is necessary to save the core business of the company and to improve the earning of the company. The company performance is down partially due to recession and partially due to mismanaging the resources spread in different part of world  The company is doing so because the company is entering into cost cutting mode and in these sites, as they are not operational yet so they are not contributing actively o the revenues. The company is not ready to do much investment in the hope that it will give good return in the future. The company is in talk with many parties to sell the unit, which belongs to noncore process. Talisman valued its assets in Kurdistan between about $750 million and $1.25 billion. The past performance of the company was quite disappointing in nature earning only $97 million in the latest quarter, half the year earlier level. It’s stock almost fall in 2011, and recently traded at $11 in New York. To get Rid of this situation company decided to go for cost cutting of 20 percent annually an d was in talk with Chinese parties but sudden change in rule in Canada regarding to foreign buying make the Chinese parties to be de interested in the ongoing deal. The in charge of the company Mr Kvisle has not disclosed the name of the parties to whom the deal is going on but he also not rule out of the possibility of selling the entire company if they get good offer from the intersected party.
. Now the company has decided to go for consolidation moves and to re-plan the strategy so that it remains profitable in the future. If this phase of the company is tackled successfully then it is guaranteed that company will survive successfully in the future also. The management is exploring the every option to do the cost cutting to survive the most difficult phase. The changes in rule of Canadian government also increasing the complexity in thee selling the unit but the management are ready to focus on the strategic selling to cover the loss of the past.

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