Talisman Energy To Sell Part Of Its Montney Acreage For C$1.5 Bln In Cash

(RTTNews) - Canadian oil and gas producer Talisman Energy Inc. (TLM, TLM.TO) said Friday that it has agreed to sell part of its Montney acreage in northeast British Columbia to Progress Energy Canada Ltd. for C$1.5 billion, or $1.43 billion, in cash. The deal is part of the company's plan to raise up to $3 billion from asset sales in 2013.

Under the deal, Talisman Energy will sell about 75 percent, or about 127,000 net acres, of Montney position in the Farrell Creek and Cypress areas of British Columbia, 65 mmcfe/d of Farrell Creek production as of October 1, 2013, and C$800 million of remaining third party capital carry estimated at 2013 year-end.

The company expects to receive regulatory approvals for the deal in the first quarter of 2014 and will use the proceeds from the sale to pay down debt and strengthen its balance sheet.

Hal Kvisle, CEO of Talisman Energy said, "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. It is priced in line with recent major Montney transactions, further simplifies the company, and enables us to strengthen our focus on our Edson-Duvernay producing and development assets."

Talisman will retain its Groundbirch and Saturn assets including about 48,000 net acres of prospective Montney land. Jefferies LLC and Scotiabank acted as joint advisors to Talisman.

In early October, activist investor Carl Icahn said he acquired a 5.97 percent stake in Talisman and planned to hold talks with the company's management to discuss strategic alternatives as well as board seats. Icahn said that the strategic alternatives include, among other things, asset sales or potential corporate restructuring.

Talisman's financial results have been negatively impacted by a slump in crude oil as well as natural gas prices. In late July, Talisman reported a lower profit for the second quarter as sales declined amid lower production and a fall in crude oil prices.

TLM closed Thursday's trading on the NYSE at $11.71, down $0.26 on a volume of 8.86 million shares.