Talisman looks for more acres in Texas shale field

Mon Jun 13, 2011 4:59pm EDT
 
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By Scott Haggett

CALGARY, Alberta (Reuters) - Talisman Energy Inc says it may buy more land in the oil-rich Eagle Ford shale field in Texas, but only if the price is right.

John Manzoni, the company's chief executive, told reporters on Monday that Talisman, Canada's No. 4 independent oil producer, would look for an incremental expansion of its holdings in the Eagle Ford play in south Texas and stay clear of the big-ticket deals done recently.

Eagle Ford has emerged as the hottest North American shale field because its output is oil rather than the natural gas that flows from fields such as the Marcellus shale in Pennsylvania.

Earlier this month Marathon Oil Corp said it would pay $3.5 billion for 140,000 acres in Eagle Ford owned by private equity firm KKR & Co and Hilcorp Resources Holdings LP.

"You can make your own judgments about the deals that have recently been done," Manzoni told reporters following a presentation to the Canadian Association of Petroleum Producers' annual investment symposium. "We understand the land, we understand what we believe we should be paying. We're looking at smaller deals, incremental expansions ... at the right price."

Talisman took its first position in Eagle Ford in May 2010, buying 37,000 acres, and augmented that in December, when it and joint-venture partner Statoil paid $1.33 billion for 97,000 acres.

The company's North American operations are focused on producing oil and gas from shale and other unconventional reserves. Output from its Eagle Ford properties averaged almost 4,000 barrels of oil equivalent per day in the first quarter of 2011, less than 1 percent of the company's total production.

Manzoni also said Talisman is still examining the possibility of building a gas-to-liquids plant in Canada with South African energy group Sasol.   Continued...