Talisman Energy CEO says oil prices in a reasonable range

Talisman Energy Inc., the Canadian explorer with reserves in North America, the North Sea and Southeast Asia, said oil prices are in a “reasonable range” and are unlikely to go much higher than $90 a barrel. Crude prices above that level would “probably persuade the Middle East to open up the taps,” CEO John Manzoni said in an interview at an energy conference in Aberdeen, Scotland.

OPEC is meeting tomorrow in Vienna to discuss production levels. “I think they’ll stay exactly as they are, concentrate on compliance and not cause too many ripples,” Manzoni predicted. Oil prices, which have rebounded 57 percent this year, traded at $70.58 a barrel in New York today.

The company has a “strong balance sheet” and has cash available for acquisitions in either Asia or North America should it find suitable targets, according to Manzoni. Talisman plans new projects in the Kurdish region of Iraq and Papua New Guinea, the CEO told reporters.

It first wants to see a settlement between the Iraqi central government and the semi-autonomous Kurdish regional government and will wait until parliamentary elections in Iraq are over. “Nothing will happen between now and January, because of elections,” Manzoni said. The explorer plans to “increase exposure over time” to the region when issues including export payments are settled between the two sides.

Talisman is targeting 2 to 3 trillion cubic feet of gas resources in Papua New Guinea, the CEO said. The company agreed in June to acquire U.K explorer Rift Oil Plc for 108 million pounds ($178.7 million) in cash. “We’ve been drilling some wells,” Manzoni said. “We will look at any other opportunities and see if we can expand.”

He declined to comment on a report in the Australian Financial Review in July that Talisman may have agreed a $90 million joint venture with New Guinea Energy Ltd. Production from its UK North Sea assets is seen unchanged at 90,000 barrels of oil equivalent a day. It is “hard to grow in the North Sea given its maturity, so we are essentially flat” in the region, he said.

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