According to sources, Talisman Energy (UNKNOWN:TLM.DL) is considering the possible sale of its Asian assets. This revelation comes as a surprise as Talisman counts its Asian portfolio as a core part of its business.

Indeed, Talisman's Asian assets are arguably the company's most attractive assets. Cash flow from these assets is forecast to hit $1.2 billion during 2014, nearly half of the company's total cash flow. Capital spending for the period is slated to be in the region of $700 million, making Asia one of the only regions where Talisman is free cash flow positive.

What's more, regional cash flow is expected to expand at 10% per annum through 2018, with production of 140,000 barrels of oil equivalent per day forecast for this year.

Further, Talisman's Indonesian assets are reporting netbacks of around 60%. It is currently rumored that Talisman's Asian assets, packaged together, will fetch around $4 billion.

Asia focused
Excluding these Asian assets, Talisman's portfolio contains very little to get excited about.

The company's aggregate production during 2013 was 373,000 barrels of oil equivalent per day, of which 35,000 barrels oil and 883 mmcf/d of gas came from North America, 44,000 barrels of oil and 516 mmcf/d of gas came from Southeast Asia, 32,000 barrels of oil and liquids and 9 mmcf/d of gas came from the North Sea, and 21,000 barrels of oil and 43 mmcf/d of gas came from other areas. Around 35% of total production is liquids and 65% natural gas.

The company's North American assets are not expected to be free cash flow positive until 2015, and Talisman is trying to exit the North Sea. If Asia goes, Talisman is going to become a North America-focused company with few international assets.

Similar move
This move by Talisman follows a similar move made by Hess (NYSE:HES) last year, in which Hess divested $1.3 billion worth of Asian assets in order to fund the company's buyback plan. Hess' assets were producing 15,000 barrels of oil equivalent per day when they were sold.

What Hess did with its disposals could shine some light on what Talisman is planning to do next. Talisman needs the cash, that much is obvious; the company had already planned $2 billion of asset sales within the next 18 months, the proceeds of which would be used for capital spending and debt reduction.

Hess, however, used its cash to boost its stock buyback. Could Talisman be thinking of starting its own buyback?

It's unlikely. Hess is a larger company than Talisman, and the company's Asian asset sale did not represent a significant portion of its portfolio.

Hess still has prospects in the Gulf of Mexico, the Tubular Bells field under development with Chevron, deepwater plays off the coast of Africa, two fields within the North Sea, a large Bakken position, and other assets within Asia. Hess, which reported a free cash flow of more than $5 billion for 2013, can afford to spend on buybacks.

Unfortunately, Talisman's free cash flow was -$375 million for the same period. With the company thinking about selling off its prized Asian assets, which generate around 50% of cash flow, this figure could drop further.

Foolish summary
Talisman could be drawing up a plan to sell off its Asian assets, but if it does then the company is going to have to make some hard choices going forward.

Talisman is currently an Asia-focused company, and its Asian assets currently contribute around 50% of cash flow. Without the cash flow from Asian assets, Talisman will be heavily reliant on the success of its North American assets.