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Talisman to sell part of Montney field to Progress Energy

Reuters

(Reuters) - Talisman Energy Inc (Toronto:TLM.TO - News) said it would sell a stake in some of its natural gas assets in British Columbia's Montney field to Malaysia-controlled Progress Energy Canada Ltd for C$1.5 billion ($1.44 billion) as it restructures global operations.

Talisman, in which activist investor Carl Icahn has a 6 percent stake, has been trying to cut costs and boost its share price.

The Canadian oil producer will sell about three quarters, or 127,000 acres, of its holdings in the Farrell Creek and Cypress areas of British Columbia as a part of the deal.

The assets produced about 11,000 barrels of oil equivalent per day as of October 1 and production is expected to increase in the fourth quarter, Progress Energy, a unit of Malaysia's state oil firm Petronas (:PETR.UL), said on Friday.

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Petronas acquired Canadian explorer Progress Energy Resources for $5 billion last year to access shale fields in northeastern British Columbia.

Talisman will retain its Groundbirch and Saturn holdings, spanning 48,000 acres in Montney.

The Montney stake sale is a part of the company's plan to raise between $2 billion and $3 billion from asset sales this year. Talisman is also looking to shed its stake in the Ocensa pipeline in Colombia.

The company said it expected to get regulatory approvals for the deal in the first quarter of 2014 and would use the proceeds to repay debt.

The sale will help Talisman focus on its Edson-Duvernay assets.

The company said earlier this week that it scrapped plans to sell properties in the northern portion of the Duvernay shale field in central Alberta after it failed to find a suitable buyer.

Talisman said it now wanted to find a joint venture partner for its Duvernay properties to help finance drilling in the promising region.

Jefferies LLC and Scotiabank were joint advisers to the company.

Talisman shares closed at C$12.22 on Thursday on the Toronto Stock Exchange.

($1 = 1.04 Canadian dollars)

(Reporting by Garima Goel in Bangalore; Editing by Kirti Pandey)