After giving Talisman Energy's (NYSE:TLM) year-end report the old look-see, I'd like to share a few things that impressed me, one that I had some mixed feelings about, and one that just plain confused me.

The first positive point was that Talisman executed a major balance sheet overhaul in 2009, cutting net debt nearly in half, to $2.1 billion. This was enabled by $2.7 billion in asset sales, which Talisman executed at a handsome $80,000 per flowing barrel of oil equivalent (boe). Talisman has more recently shed its Netherlands assets for $600 million, and it has additional North American producing assets on the market.

The second thing I'm enthused about is Talisman's reserve base. Just 28% of the firm's reserves are in the proved undeveloped (PUD) category. Under the new SEC rules, PUD bookings are proliferating for players such as Petrohawk Energy (NYSE:HK). In North America, where Talisman is making a big push into the same sort of unconventional gas plays as everyone else, the firm's PUDs only weigh in at 26% of reserves. That said, it's interesting that the firm has booked three to four PUDs for each developed location in the Marcellus, while Range Resources (NYSE:RRC) reported a ratio of just 1.2:1.

I said last quarter that Talisman is attractively priced on a production basis, but the company is definitely light on production growth. Specifically, the company isn't expecting any in 2010. That's a turn-off for most investors. I was somewhat surprised by this outlook, given that Talisman is more than doubling its development drilling in its major shale plays. This isn't a leviathan like ExxonMobil (NYSE:XOM) or BP (NYSE:BP), so it shouldn't be so difficult to move the needle, right?

This production pause has to be viewed in context, though. Somewhat like Devon Energy (NYSE:DVN) and its own quest to reinvent itself, Talisman is very much in transition. By shifting to higher-return projects, the company is consciously, and rightfully, de-emphasizing near-term growth in favor of building a more sound long-term platform.

Now here's the puzzler. Talisman said it exited the year at 65 million cubic feet equivalent (mmcfe) of daily gas production in the Marcellus, and that it expects to exit 2010 at a rate of 250 to 300 mmcf/d. That's higher than either Chesapeake Energy (NYSE:CHK) or Range Resources have guided for, and they are the most active in the play.

A peek at Talisman's supplemental disclosure reveals that the Canadian company does not deduct royalty volumes from its production figures. Bottom line: The company's not nearly as cheap as I thought it was. Always read the footnotes, Fools.