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Hal Kvisle, the new CEO of TalismanJeff McIntosh

Talisman Energy Inc.'s expansion days are over.

Talisman abruptly appointed energy veteran Hal Kvisle as chief executive officer Monday in a bid to revitalize the company's performance after John Manzoni's growth strategy failed to bring results.

Talisman "believed it was the right time for a new leader," said spokeswoman Phoebe Buckland, adding that Mr. Manzoni, who was appointed chief executive five years ago, has "agreed to step down."

Talisman has struggled to keep its sprawling operations running smoothly, including production problems at its North Sea oil operations that forced the company to slash output forecasts twice last year.

And a big bet on natural gas properties in North America under Mr. Manzoni has failed to produce big returns amid a continental gas glut that has clobbered prices.

With various projects struggling and dragging down cash flow and profits, company spending exceeded what investors are comfortable with.

As a result, shares of Talisman, one of Canada's biggest independent oil and gas companies, have lagged, currently trading at levels seen about seven years ago and well below levels of recent years even as oil prices have surged.

Now Mr. Kvisle's first job is to slim the company down.

"Talisman should be more focused on a smaller number of assets," Mr. Kvisle said in an interview. "The board felt it was time for a very serious effort to focus the company on execution and operational excellence and that's why the change occurred."

Mr. Kvisle, a Talisman board member and former CEO of pipeline giant TransCanada Corp., said he intends to whittle down the company's assets, align spending with cash flow, and make Talisman more profitable.

Mr. Manzoni carved out three areas of focus when he took over the CEO role from Jim Buckee. Those businesses – North American natural gas assets, the North Sea, and exploration and production in Southeast Asia and Latin America – will remain, but Mr. Kvisle said he intends to sell properties and strike up partnerships within those operations. Mr. Kvisle said he might carve off about 15 per cent of the company in total.

Analysts said the company may wind up going a step further. If the asset sale plan "does not yield significant value to shareholders, this could lead to the company pursuing more meaningful portfolio shifts or an outright sale," said Andrew Potter, an analyst at CIBC World Markets Inc.

Mr. Kvisle said the company neither received nor sought takeover offers during a 10-month review.

He declined to say which assets are on the chopping block, but hinted how the review process may unfold around the globe. Talisman, for example, has conventional and unconventional natural gas properties in North America, including positions in the Montney, Duverney, Eagle Ford and the Marcellus.

"Each of those plays has got richer and leaner parts to it," Mr. Kvisle said. "Each of those plays you can find areas where you can focus more on [natural gas] liquids, less on gas."

Further, he expects to remain in Colombia's oil fields, but may pull out of some areas within the country. He tapped Southeast Asia as the "most exciting" region in the company, but that does not mean it will be spared the scalpel.

"Even there we have some assets that generate good cash today, but they may not have much development potential," Mr. Kvisle said. "Those would be the kind of [projects] where there's a more logical buyer for them and we move on and focus ourselves on a smaller number of positions in Southeast Asia."

Talisman had made steps to revamp as investors grew frustrated. For example, it sold 49 per cent of its North Sea oil business to Sinopec International Petroleum Exploration and Production Co. for $1.5-billion (U.S.) in July.

Nexen Energy Inc., another Calgary-based energy company that has lagged its peers in recent years and came under mounting pressure from shareholders, removed Marvin Romanow from the corner office in January, and then agreed to a $15.1-billion (U.S.) takeover by China's CNOOC Ltd. the same day Talisman announced its agreement with Sinopec. The Nexen takeover is under regulatory review.

Talisman's stock closed $14.09, up 1.6 per cent, Monday. Mason Granger, a fund manager at Sentry Investments in Toronto, said he believes Mr. Kvisle's appointment is positive, but institutional investors are not ready to race to the stock.

"The company needed change, but with the caveat that we're still anxiously awaiting some idea of what this change means in terms of refocusing the company and the new strategic direction in terms of Manzoni leaving," he said.