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President and Chief Executive of Talisman Energy Hal Kvisle (R) meets with shareholders before the company's annual general meeting in Calgary, Alberta, May 1, 2013.Todd Korol/Reuters

Investors are looking at Talisman Energy Inc. with caution, wagering that despite Carl Icahn's success at influencing its direction, the company's turnaround will still take time.

On Monday, the big-name activist investor gave the stock a second bump in as many months when Talisman disclosed that two of his nominees were being welcomed onto the Calgary-based oil producer's board.

On Tuesday, it gave up some of that ground, as investors realize the company still faces a long and bumpy road to growth, even without a well-funded critic going public with loud complaints.

After jumping about 3.5 per cent on Monday, Talisman fell roughly 2 per cent to fetch $12.73 on the Toronto Stock Exchange. That is down from $13.15 on Oct. 7, when Mr. Icahn tweeted that he had amassed a 6 per cent interest and intended to talk to management about "strategic alternatives, board seats, etc."

In the ensuing weeks, he increased his interest to more than 7 per cent and won seats on the board for his nominees, Samuel Merksamer and Jonathan Christodoro, who are managing directors at Icahn Capital LP.

The announcement on Monday showed that the two sides intend to deal with each other in peace rather than engage in the kind of proxy battle that tends to stoke share prices.

Mr. Icahn "can lend his expertise and knowledge to our existing strategy and help us deliver on sustainable shareholder value," a Talisman spokesman said.

Even before Mr. Icahn's entrance in October, Talisman CEO Hal Kvisle was about a year into a restructuring aimed at winnowing down the number of regions in which the company operates, while seeking to boost near-term cash flow.

The company is expected to eventually disentangle itself from a North Sea joint venture with one of China's state oil companies. For now, Mr. Kvisle has concentrated on operations in the Americas and in southeast Asia, especially oil and natural gas liquids. Talisman has sold $1.5-billion in assets this year, and Mr. Kvisle has been promising more sales shortly.

However, it is jettisoning its properties in a market where good assets are not scarce enough to fetch top dollar, as numerous rivals also have holdings on the auction block.

It doesn't help that, despite its lengthy restructuring efforts, Talisman is expensively priced versus its peers, said Michael Dunn, analyst at FirstEnergy Capital Corp. He notes that the stock is trading at about two times its proved and probable reserve net asset value.

"One would normally expect Talisman to trade at a cash-flow multiple discount to its peer group, given its track record. Exiting the North Sea appears to be essential in order to undertake more sweeping structural changes at the company," Mr. Dunn wrote in a note to clients.

Reducing its North Sea exposure will not be a simple task, largely because Talisman has a major joint venture with China's Sinopec Corp. there, where the cash flow outlook is worsening, Mr. Dunn said.

TD Securities analyst Menno Hulshof agreed, saying that, given the complexity of its operations, it will take time for Talisman to "surface value."