A very blunt message to Talisman Energy management—on the occasion of their recent financial self-celebration—from the divestment campaign working for a just peace in Sudan:
“We will destroy your share price.”
No amount of press conference self-puffery will end the relentless pressure on Talisman investors, large and small, to dump their shares. No amount of disingenuous corporate boilerplate cranked out by Hill & Knowlton will diminish the ever-harsher scrutiny by the press of Talisman’s complicity in Sudan’s oil-driven destruction. And nothing can protect Talisman, or Talisman share price, from the growing movement in Washington to strip Talisman of its New York Stock Exchange listing—an action that will have catastrophic effects on share price.
The divestment, and broader capital markets, campaign against Canada’s corporate “cross of dishonour” will not end, or cease to grow in force and visibility, until the evil of Talisman’s presence in Sudan has ended.
Eric Reeves [November 6, 2000]
Smith College firstname.lastname@example.org
Northampton, MA 01063
Talisman’s well-orchestrated announcement of third-quarter results this past Thursday (Nov 2) was supposed to have been the occasion for putting share price concerns behind. The headlines must have been all that Talisman’s CEO Jim Buckee could have wished for: “Talisman Energy posts record quarterly profits”; “$212 million in profits in the third quarter [were] more than three times its earnings last year” (Canadian Press, Nov 2); “Talisman Energy profit quadruples”; “[Talisman said] its third-quarter profits almost quadrupled due to rising output and high oil and gas prices”; “cash flow, a key measure of an oil company’s ability to fund its development projects, doubled to a record level” (Reuters, Nov 2); “Talisman Nine Month Cash Flow More Than Double at $1.7 billion”; “Talisman Energy Inc. today announced continued record cash flow, earnings and production” (Business Wire, Nov 2).
And what did Talisman share price do on Thursday, as Buckee trumpeted these glowing numbers?
And what did it do on Friday, the day after the financial world had a chance to assess the implications of these record financial results by Talisman?
It declined—sharply (down a full $2.00 to $46).
Does anyone doubt that it is Talisman’s presence in Sudan that has driven share price to this distressed level? Does anyone imagine that things will do anything but get worse? Talisman is now trading several dollars below its 1999 (pre-divestment campaign) high. This is so despite a string of quarterly announcements like that of this past Thursday. Net income for 2000 will be marked by a 400% increase over that of 1999. And yet the stock trades below the 1999 high. Cash flow keeps breaking records. And yet the stock trades below the 1999 high.
Sudan is the reason—and Sudan will continue to be the reason. Only mindless and vicious stubbornness on Jim Buckee’s part puts Talisman shareholders in this distressed position. And for some, their distress level is rising quickly. The sharp focus on Fidelity Investments (the mutual fund company in Boston) and Royal Bank of Canada is putting a growing squeeze on millions and millions of shares—many more than can be absorbed by Talisman’s aggressive (and expensive!) share buy-back effort. (Talisman’s announcement that it will very likely continue the cash-depleting share buy-back in 2001 must raise questions in the minds of those who thought that upstream oil and gas outfits were supposed to use cash for exploration and development purposes, not futile efforts to stave of the effects of a divestment campaign.)
Talisman’s recent 25% decline in share price can certainly be attributed in part to movement within the energy sector, and the market’s response to the volatile (though still exceedingly high) price of crude oil. But Talisman is experiencing a particular distress that can only be attributed to its destructive and immoral presence in Sudan.
No financial results, no records for cash flow or profits, no “subject-changing” press conference can diminish this most telling feature of Talisman Energy.
And its share price will be punished accordingly.