Talisman Energy Inc.
, Stock Forum
) reached an agreement to sell part of its Montney acreage in northeast British Columbia to Progress Energy Canada Ltd., a formerly independent Canadian company that's now a subsidiary of Malaysia's state-owned Petronas, for a total cash consideration of $1.5 billion.
According to the Talisman Energy press release
, the transaction represents the sale of approximately 75% (~127,000 net acres) of Talisman's Montney position in the Farrell Creek and Cypress areas of British Columbia.
The transaction also represents 65 million cubic feet equivalent of Farrell Creek production as of Oct 1, 2013, which is expected to increase in the fourth quarter as Talisman concludes the 2013 completion program, and associated facilities.
"The sale of this long-dated position represents a strong return on our Montney investment and brings us closer to achieving the $2.0-3.0 billion asset disposition target we set out in March this year," said Hal Kvisle, CEO. "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. Following receipt of applicable regulatory approvals, expected in the first quarter of 2014, we will use the proceeds to pay down debt and strengthen our balance sheet."
Talisman is a global upstream oil and gas company.
On Friday morning, Talisman was up 1.7% and was trading at $12.43 a share. The company had a market cap of $12.9 billion, based on one billion shares outstanding.