Talisman Energy to sell stake in Montney oil field to Progress Energy for $1.44 bn
08 November 2013
Talisman Energy Inc, one of Canada's largest independent oil and gas company, today struck a deal to sell 75 per cent of its stake in Montney oil field in northeast British Columbia to Progress Energy Canada Ltd for C$1.5 billion ($1.44 billion) in cash.
Calgary-based Talisman, which has put assets worth $2-billion to $3-billion on the block this year to reduce debt, will sell 127,000 net acres of its Montney position in the Farrell Creek and Cypress areas of British Columbia to Progress Energy .
These assets produced approximately 11,000 barrels of oil equivalent per day as of 1 October and is expected to increase in the fourth quarter of 2013.
The acquisition includes wells, pipelines and processing plants in the Greater Farrell and Great Cypress areas.
Progress Energy will be acquiring Talisman's 50 per cent interest in Greater Farrell, where Talisman's partner owns the remaining 50 per cent interest.
In addition, North Carolina-based Progress Energy will acquire Talisman's partnership interest in the Greater Cypress area where Progress Energy has joint operations with Talisman.
Talisman will retain its Groundbirch and Saturn assets including approximately 48,000 net acres of prospective Montney land.
"These natural gas interests are an attractive complement to our existing North Montney asset base in northeastern British Columbia and are among the largest remaining North Montney lands not dedicated to a potential liquefied natural gas project,'' said Michael Culbert, president & CEO of Progress Energy.
''The location, resource potential and operational synergies of these assets make this an ideal fit that expands our British Columbia resource base and increases our land position to 1.2 million acres," he added.
"The sale of this long-dated position represents a strong return on our Montney investment and brings us closer to achieving the $2-3 billion asset disposition target we set out in March this year," said Hal Kvisle, CEO of Talisman.
"Following receipt of applicable regulatory approvals, expected in the first quarter of 2014, we will use the proceeds to pay down debt and strengthen our balance sheet."
Progress Energy was acquired last year by Malaysian state-owned oil and gas company Petronas for C$5.5 billion.