When Hal Kvisle took over as Talisman Energy Inc.'s chief executive, he thought he would have the company on the right track in three to six months. He could then head back into retirement. Now, 27 months later, he is still in charge. Talisman is still messy. Investors, already with a long list of complaints about Talisman, have added the lack of a succession plan to their list of worries.
"Back when I stepped into this job, you know, I thought I might be here three to six months," Mr. Kvisle, who was on Talisman's board at the time of his appointment to the corner office, said in an interview Tuesday. "And as we really peeled back the onion and came to grips with just the magnitude of our challenges in the North Sea and some of the other problems, and a very large global exploration program had to be wound down, and a high cost structure in the company, and lack of focus, the board and I agreed it was going to take a little bit longer than that.
"And so we thought maybe more like 12 to 18 months," he said. "But some of those tangles have definitely caused us to hold off initiating the CEO succession process. What we thought we might initiate three months after I stepped into the job, we didn't actually initiate until I'd been here 18 months, and that's part of the reason for the delay."
Mr. Kvisle earlier this year said he would like to step down by the end of 2014. Talisman reported its third-quarter earnings Tuesday, and the only information it gave regarding succession was that Mr. Kvisle pledged to stick around until the company found the right leader and the transition process wrapped up. While some market-watchers believe Talisman has narrowed its search to one outside candidate, the company stayed mum on any details.
Many of the problems Mr. Kvisle inherited in September 2012 still plague the company. This has made it even more difficult to attract a suitable CEO, Mr. Kvisle concedes. Talisman admits its assets in the United Kingdom's slice of the North Sea need years of work to tidy up and no energy company wants to buy those problems. Its assets in Iraq's Kurdistan region are, in Mr. Kvisle's opinion, top-notch, but the war there threw Talisman's plans into the ditch. Talisman's global wildcat program still exists, albeit on a smaller scale than when Mr. Kvisle stepped up.
Talisman's work in Papua New Guinea is on the iffy list, too. The Calgary-based company has teamed up with partners there, and got a handle on costs, but "that's an asset that will take a lot of capital for the next 10 years before LNG [liquefied natural gas] projects are likely to come on stream," Mr. Kvisle said. Talisman would like to sell it, given the time and cash commitment necessary, but it has not yet pulled that off.
One of Mr. Kvisle's key goals when the took over was to make Talisman more focused and efficient. He has narrowed Talisman's game plan down to two regions: Its operations in Asia; and its assets in the Americas – Canada, the United States, and Colombia. On this score, Mr. Kvisle deserves credit.
"I'd love to own either one of those businesses, or to run a company that was focused on those businesses," he said.
But that's what makes it hard to attract a suitable. CEO. Talisman is much more than those two businesses.