Talisman Energy Inc., which has been working to narrow its focus in North America on unconventional natural gas, said Wednesday it has five separate agreements in place with some undisclosed buyers to sell assets in Ontario and in Western Canada for a total of C$1.5 billion.

The producer, considered the fifth largest in Canada, earlier this year said it was increasing its capital spending to expand its drilling program in the Marcellus Shale and in British Columbia’s (BC) Montney Shale (see Daily GPI, Jan. 12).

Talisman’s latest transactions would unload close to one million acres, or about 400,000 hectares. Included with its Ontario sales are assets in the Peace River Arch area near the northern borders of Alberta and British Columbia. Also to be sold are properties in the central Alberta Foothills region and near Hinton, AB. All of the sales are expected to be completed by the end of June.

CEO John Manzoni said the sales would help the company continue to build its North American gas shale business.

“Although these are excellent assets with a great future, they can’t effectively compete for capital within our emerging strategic asset mix,” Manzoni said. “These sales are value accretive and will help us focus on, finance and build our growing, low-cost North American shale gas business.”

The properties to be sold currently produce 42,500 boe/d, 90% weighted to gas. Net proved reserves are estimated at 120 million boe. On a per flowing barrel basis, the Canadian sales are expected to result in C$44,700/bbl to Talisman. Sales of assets in Denmark, Netherlands, Trinidad and Tobago, Alberta and Saskatchewan brought in an estimated C$84,200/bbl.

Talisman’s primary shale holdings are in the Montney play and in the Marcellus Shale. Other areas under development include southeast Asia and offshore in the North Sea. After it launched its shale-focused strategy in 2008, Talisman began selling noncore assets that at the end of 2009 resulted in sales totaling C$3.2 billion on assets that were producing around 38,000 boe/d.

Although Talisman did not disclose the buyers, Toronto-based Dundee Corp. on Wednesday said subsidiary Eurogas Corp. had completed an agreement to buy “the largest accumulation of oil and natural gas assets in Ontario for a cash purchase price, before closing adjustments, of C$131 million.”

Eurogas did not disclose the seller, but it said the acquisition was to close in late May. The assets, both onshore and offshore properties in and around Lake Erie, are expected to provide Eurogas with operating cash flow of at least C$2 million/month at current gas prices, it said. The property includes drilling locations, recompletions and some existing infrastructure.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.