The first quarter of this year has been pretty unimpressive for Talisman Energy (NYSE: TLM). It's one of largest independent oil and gas producers based in Canada, but the company's performance didn't come close to what Foolish investors might have wanted.

The results
Talisman reported a net loss of $326 million, compared with net income of $371 million in the first quarter of 2010. Not surprisingly, high crude prices in this quarter ensured that the company recorded noncash losses from financial instruments in the form of commodity derivatives. Unrealized losses of $319 million marred the bottom line.

However, if we discount the effects of these noncash items, earnings from operations were pretty much flat at $157 million, versus $155 million a year ago. For a globally diversified company with operations in North America, the North Sea, and Southeast Asia, this does not bode well for Foolish investors. Production also saw a marginal increase of only 2% to 444,000 barrels of oil equivalent per day (Boe/d), mainly from a 7% increase in production in North America.

What the future holds
Operations in this continent look promising with the company continuing to ramp up drilling activity in the Eagle Ford and Marcellus shale plays. Anadarko Petroleum (NYSE: APC) has shown what these regions hold. Its sales volumes increased by 30% and 82%, respectively, over the previous quarter from these shale plays. Talisman's productivity should not be looking any different.

The company has a partnership with Sasol (NYSE: SSL) to develop the Farrell Creek and Cypress A Montney shale plays in Canada, so North America currently seems to be the best bet for Talisman.

Foolish bottom line
International projects, including those in Southeast Asia, can provide a lot of scope to the company's future operations as well. However, the company must ramp up production further in order to see increased revenues. The recent outperformance of this stock compared to the overall market may not last very long following Q1 results. I would advise fellow Fools to be a bit more careful and patient in dealing with this stock in the future.

Fool contributor Isac Simon does not own shares of any of the companies mentioned in this article. Motley Fool newsletter services have recommended Sasol. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.