Struggling Canadian energy explorer Talisman Energy Inc. (TLM) is still hoping to shed some of its assets to Spanish oil producer Repsol S.A. (REPYY). Talisman originally revealed about the property disposal plan in July, sending its shares higher.
Over some time now, Talisman Energy has been trying to shed assets – particularly those that do not fit into the company’s long-term growth plan – to focus on its core operations (in Western Canada and the U.K. North Sea) and strengthen its balance sheet.
During the last few years, Talisman Energy has been selling non-core oil and gas properties around the world, thereby freeing up capital to concentrate on its longer-term prospects in Canada, the U.S., the North Sea and Southeast Asia. The company announced some $2 billion worth asset divesture in 2013, with an additional $2 billion target by the next 18 months.
On the other hand, Repsol is flush with funds following its $5 billion settlement with the Argentinean government over the issue of expropriation of the Madrid-based integrated player’s holding in the state-controlled YPF S.A. (YPF). With an acquisition war chest of around $10 billion, Repsol is looking for long-term growth oriented oil-rich assets in OECD countries that could help the company create value. Talisman Energy’s low-risk, high-growth projects in several North American shale plays (like Marcellus and Eagle Ford), makes it fit the bill perfectly.
Calgary, Alberta-based Talisman Energy is an independent oil and gas explorer, 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. Talisman Energy sold a major portion of its North Sea operations in 2012 to Chinese refining giant Sinopec (SNP) for $1.5 billion.
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