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Talisman Energy Unloads C$379M in 'Nonstrategic' Canadian Assets

Moving in line with its previously announced plans to "rationalize" its asset portfolio, Talisman Energy Inc. subsidiary Talisman Energy Canada (TEC) said last week that it has entered into a number of agreements for the sale of nonstrategic assets in Canada.

TEC said the sales are expected to generate proceeds of C$379 million, made up of C$371 million in cash plus C$8 million in land and other strategic assets. The assets being sold are producing approximately 7,000 boe/d, with proved reserves of 16 MMboe as of Dec. 31, 2005. Thirteen transactions have been completed and it is expected that all 18 agreements will close by July 19. The sales are subject to customary closing adjustments and conditions, including regulatory and third-party consents. Talisman said Tristone Capital Inc. acted as exclusive financial advisors on the sales process.

"After the acquisition of Paladin Resources we announced that we would rationalize our North American and UK portfolios," said Talisman CEO Jim Buckee. "These assets are not strategic to Talisman and we realized excellent value in the marketplace. In total, we expect to generate about C$830 million from the combined UK and North American asset sales. The proceeds from these asset sales will more than repay the remaining balance on the Paladin acquisition bridge facility."

In related company news, Talisman Energy announced that it has drilled another successful well in the Monkman region of northeastern British Columbia. The Talisman et al Bullmoose a-A043-E/093-P-03 well (Talisman Energy Canada 73%) tested at rates of up to 27 MMcf/d (gross raw gas). The well is expected to be tied in during the fourth quarter of 2006.

This successful Triassic well follows two previously announced wells, which tested at rates of 30 MMcf/d (Talisman 33%) and 16 MMcf/d (Talisman 31%) earlier this year and the d-93-D/93-P-5 deep well (Talisman 80%), which has been producing approximately 34 MMcf/d (gross sales gas). The company said plans are under way to spud another deep well next month. Talisman also plans to shoot the second phase of a major 3D seismic program in the Brazion area, where it anticipates finding additional Paleozoic and Triassic drilling locations in 2007 and beyond.

Calgary-based Talisman Energy has operations in Canada and its subsidiaries operate in the North Sea, Southeast Asia, Australia, North Africa, the United States and Trinidad and Tobago. Talisman's subsidiaries are also active in a number of other international areas, including Colombia, Gabon, Peru, Romania and Qatar.

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