Talisman to proceed with Kurdistan sale despite big oil find

Fri Aug 22, 2014 2:26pm EDT
 
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CALGARY, Alberta Aug 22 (Reuters) - Talisman Energy Inc , Canada's No.5 independent oil producer, said Friday it still plans to sell its oil properties in Iraq's Kurdistan region, even after its partner announced a massive oil discovery on its properties.

Talisman owns a 40 percent stake in the Kurdamir block in Kurdistan, operated by partner WesternZagros Resources Ltd . The junior oil company said on Thursday it had found a field that could contain around one billion barrels or more of crude, which could produce as much as 150,000 barrels per day (bpd).

The two companies are now coming up with a development plan for the find, which could see an initial phase producing 10,000 bpd by the end of 2015, WesternZagros said in a statement. It has submitted a Declaration of Commercial Discovery to the Kurdistan government

Despite the discovery, Talisman still plans to look for buyers for its Kurdistan assets as it continues restructuring to cut debt and boost its flagging shares.

The company said earlier this month it expected to begin a sale process within the next several weeks for all or part of its properties in the Middle Eastern country despite violence in the region and that it had not changed its mind about a sale.

"The (discovery declaration) is really just a procedural step. It gives us a bit of optionality," said Kyle Glennie, a spokesman for Calgary-based Talisman. "Really, we're of the same mindset and the same strategy."

Along with its Kurdamir stake, Talisman also owns the Topkhana property in Kurdistan and is evaluating the results of a well drilled there.

The company last month reported a second-quarter loss of $237 million, or 23 cents per share, after earning a profit of $97 million, or 9 cents per share, a year earlier. It acknowledged it was in talks with Spain's Repsol SA over potential transactions.

Talisman shares were up 3.2 percent at C$11.86 on the Toronto Stock Exchange. The stock has risen just 1.8 percent over the past 12 months, against a 24-percent gain in the exchange's energy index. (Reporting by Scott Haggett; Editing by Bernadette Baum)