Talisman Energy, the Canadian oil and gas company which strengthened its focus on the North Sea in October with the £1.2billion takeover of UK firm Paladin Resources, is to boost its worldwide spending next year.
Around £780million will be ploughed into the North Sea - in both the UK and Norway - with about £593million invested in the UK sector.
This is considerably more than double its North Sea spending this year of about £353million, but Talisman had already earmarked £480million for exploration and development of the assets acquired from Paladin over the next three years.
Jim Buckee, Talisman's chief executive, said yesterday the acquisition had gone smoothly and added significantly to both production and drilling opportunities in 2006 and beyond.
He said: "We have a significant programme in the North Sea next year, led by the 45,000 barrels a day Tweedsmuir development, which is expected to be on stream at the end of the first quarter of 2007.
"In addition, we are planning to participate in 63 wells, including 18 exploration wells."
Mr Buckee also said Talisman was assuming that commodity prices would remain relatively flat.
It is forecasting average realised prices of 53.79 a barrel for its UK production and 54.94 from production in Norway.
Talisman added that in 2006 its exploration activity in the North Sea would be focused on prospects in the UK central North Sea and in Norway.
While some 80% of its production comes from the North Sea and the US, the Canadian-based group said it would also dispose of non-core UK and Norwegian North Sea assets early next year.
It would not disclose which North Sea assets were to be sold off, but said it planned to dispose of about 10,000-15,000 barrels of oil equivalent per day (boepd) of production in western Canada and the North Sea.
It said its overall exploration and development budget would increase by around 36% to more than £2.15billion. In total, Talisman plans to spend about £1.03billion on 685 domestic and 136 international exploration and development wells.
Plans for 2006 also entail expected production growth to 515,00-545,000boepd; between 11% and 18% up on its 2005 figures, excluding any additional volumes from the acquisition of Paladin.
Production from the UK North Sea is forecast to rise to upwards of 110,000 barrels of oil and 135million cubic feet of gas per day.
Estimated North Sea production overall in 2006 should account for about 37% of Talisman's total output.
Source: The Press & Journal