Riding high on third-quarter profit that more than tripled over last year to $430 million, Talisman Energy says it has a new oil discovery in the North Sea, where its operations continue to expand from a recent acquisition.

Calgary-based Talisman (TSX:TLM) also told investors that it is preparing to drill two exploration wells early next year in Alaska, which the company sees as "a sizable opportunity."

Talisman's third quarter was highlighted by per-share production growth of 12 per cent over last year.

"This was the highest quarterly production in the 13-year history of Talisman," president and chief executive Jim Buckee said during a conference call.

Larry MacDougal, Business Edge
Talisman president and CEO Jim Buckee.

Thanks to record-high oil and natural gas prices during the quarter, Talisman's cashflow rose 77 per cent over last year to $1.3 billion.

Net income soared to $430 million, or $1.17 per share, compared to $122 million, or 32 cents per share, in the same quarter of 2004. Overall production averaged 461,000 barrels of oil equivalent per day, an increase of seven per cent over the previous year.

"This impressive performance was compounded by high commodity prices which, as we are virtually unhedged, delivered striking financial results," said Buckee.

Talisman also announced that its wholly owned British subsidiary had discovered new oil deposits in the Inner Moray Firth near its existing Ross and Blake oilfields in the British quadrant of the North Sea.

The discovery was made in an area where Talisman has a 100-per-cent ownership stake.

While the company plans to study the discovery further, initial estimates indicate it could contain between 20 and 50 million barrels of oil in place.

"This discovery comes in the wake of a number of successful North Sea development wells and supports our view that there is significant remaining oil potential in the North Sea, especially given Talisman's size and skillset," said Buckee.

The discovery comes just two weeks after Talisman offered $2.5 billion in a friendly takeover offer for Britain's Paladin Resources PLC, which holds significant acreage in the North Sea.

Buckee told analysts the Paladin deal was "progressing smoothly" and should strengthen the company's position as a leading independent energy producer in both the U.K. and Norwegian sides of the North Sea. And while the budget is not finalized, Buckee said the company's capital spending will be in the $4-billion range, compared to $3.5 billion in 2005.

Talisman is one of Canada's most international oil and gas producers, with major natural gas production in Western Canada, operations in the North Sea, Indonesia, Malaysia, Vietnam, Algeria, Trinidad and Tobago and the United States.

The company also remains excited about exploration potential in Alaska, where it plans to drill two new wells in the first quarter of 2006.

"We see Alaska as a sizable opportunity, ranking as one of the most prolific oil basins in the western hemisphere," Buckee told analysts.

"If we had success here, it would be very significant for us."