CALGARY - Talisman Energy Inc. (TSX:TLM) said Wednesday it has sold its Dutch offshore assets to Total Holdings Nederland for US$480 million as part of a new strategy to focus its business on a few key areas.
The Calgary-based company had minority interests in three fields in the region, which produced an average of about 23 million cubic feet per day of natural gas and held proved reserves of about 43 billion cubic feet.
In May, Talisman announced a new strategic direction, which includes shedding about $3 billion in assets and focusing its attention on North American natural gas, Southeast Asia and British and Norwegian sectors of the North Sea.
South America, North Africa and the Northern Iraq region of Kurdistan may become key operating areas in the future.
"We continue to focus Talisman's portfolio in line with our new strategy," stated CEO John Manzoni, the former BP executive who took the helm of Talisman a year ago.
"With the earlier sale of our Danish assets and now this transaction, the emphasis in the North Sea will be on positioning our U.K. assets as a firm production base and growing our Norwegian business."
Genuity Capital Markets analyst Philip Skolnick said the Dutch sale is not all that meaningful for Talisman.
"This was something that was barely one per cent of their 2007 production, so it's not really anything in terms of moving the needle for them. It was already planned," he said.
The market is more interested in getting further details on Talisman's North American natural gas program, which includes operations in the Montney region of Northeast B.C., the Bakken shale in Southern Saskatchewan and the Utica shale in Quebec, Skolnick said.
On Tuesday, Talisman reported positive test results from a vertical well near Quebec City, in which it holds a 75 per cent interest.
The well produced about 800,000 cubic feet per day on a sustained basis for' days, which Skolnick said is "a pretty decent flow rate for a vertical well, especially in the shale."
However, he cautioned that it is only one well, which is still in its very early stages.
Talisman's partner in the region is Questerre Energy Corp. (TSX:QEC), one of the earliest entrants into the Quebec shale play.
Questerre said in a statement that both companies are considering bumping up the capital allocated toward the well and are thinking about accelerating or increasing the pilot program.
"The Utica is well positioned with large amounts of gas in place, high gas price realizations and low royalty rates," wrote UBS Investment Research analyst Andrew Potter in a research note.
This year, the companies plan on drilling four more wells in the Quebec shale, which contains an estimated 124 trillion cubic feet of gas.
Talisman shares were down about four per cent, or 72 cents, to $16.79 in midday trading on the Toronto Stock Exchange Wednesday.
PREVIOUS
