As per media reports, Canadian energy explorer, Talisman Energy Inc. (TLM) is discussing the divestiture of its pipeline business – primarily serving New York and Pennsylvania-based Marcellus Shale region – with midstream energy firm Regency Energy Partners LP (RGP). The total value of the deal is projected at over $1 billion.
Talisman Energy might announce the agreement within the coming three weeks as per the reports. The company can also select another buyer for its pipeline operations as the deal is not yet finalized with Regency Energy Partners.
The Marcellus Shale pipeline business of Talisman Energy comprises gathering and transmission pipelines, covering roughly 400 kilometers of area. The operation is being served by seven compression and gas dehydration facilities.
Calgary, Alberta-based Talisman Energy is an independent oil and gas exploration and production company, with operations in North America (primarily Canada) and several international regions. The company conducts its operations in three principal geographic segments: North America, the North Sea and Southeast Asia.
With core operations in the North Sea, Talisman Energy has been adversely affected by the recent tax hike in the region along with maintenance/production issues that have created investor concerns about the company’s sustainable operational efficiency and execution abilities.
As a result, Talisman Energy currently carries a Zacks Rank #5 (Strong Sell) implying that the firm will significantly underperform the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the energy sector like Sandridge Mississippian Trust II (SDR) and SandRidge Mississippian Trust I (SDT). Both stocks sport a Zacks Rank #1 (Strong Buy).
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