Exclusive: Talisman considers sale of Eagle Ford assets - sources
By Michael Erman and Greg Roumeliotis
NEW YORK (Reuters) - Canadian oil and gas company Talisman Energy Inc TLM.TO is exploring the sale of its shale assets in the Eagle Ford basin in south Texas, hoping it could raise as much as $2 billion, two people familiar with the matter said on Monday.
Talisman is working with Royal Bank of Canada (RY.TO: Quote) and has reached out to a few potential buyers, including private equity, to gauge interest, one of the sources added.
The people asked not to be identified because the matter is confidential. They cautioned that the talks are at a very early stage and may not lead to a sale.
Talisman and Royal Bank of Canada declined to comment.
Talisman owns about 74,000 acres of land in the Eagle Ford, where it has a joint venture with Norway's Statoil ASA (STL.OL: Quote), according to the company's website. Its production in the region averaged 15 million barrels of oil equivalent per day (mboe/d) in 2012, up from 5 mboe/d in 2011. Its full-year guidance is currently for around 30 mboe/d.
Talisman has announced that it is considering the sale of $2 billion to $3 billion of non-core assets. But the company's holdings in the liquids-rich Eagle Ford have generally been considered among the company's best and therefore core.
Talisman has said it plans to continue to develop its holdings in the region, where it ended 2012 with a significant backlog of wells. It said that constraints with infrastructure have hampered the pace of development and has also worked to speed up the drilling process and cut costs.
One of the sources said that outperformance by peers in the Eagle Ford could be adding to pressure on the Calgary, Alberta-based company. Based on their agreement, Talisman will transfer operatorship of the eastern part of the Eagle Ford shale play to Statoil this year. Talisman entered into a joint venture with Statoil in the Eagle Ford in 2010. Continued...