Canada's Talisman Energy announced Friday that it will sell part of its Montney acreage in northeast British Columbia to Progress Energy Canada for $1.4 billion (CAD 1.5 billion).
The transaction will see Talisman sell 75 percent (approximately 127,000 net acres) of its Montney position in the Farrell Creek and Cyrpress areas of British Columbia. This will include 65 million cubic feet of gas per day of Farrell Creek production from October 1 2013, which is expected to increase during the fourth quarter as Talisman concludes its 2013 completion program.
Talisman will retain its Groundbirch and Saturn assets, which include 48,000 net acres of prospective Montney land. Talisman CEO Hal Kvisle commented in a company statement: "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. 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. "During the five years we have held our Montney position, our employees have worked hard to develop and operate our properties, as well as establish strong working relationships with local government and communities. As we progress the Montney sales process, we will continue to operate in a safe and environmentally responsible manner, and our employees will be treated fairly and with respect."