Canadian upstream oil and gas company Talisman Energy has signed an agreement to sell part of its Montney natural gas assets in northeast British Columbia (BC) to Progress Energy Canada in a deal worth C$1.5bn.
According to Talisman, the transaction represents the sale of around 75% of the company’s Montney assets located in the Farrell Creek and Cypress areas of BC.
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The assets were producing 11,000 barrels of oil per day until 1 October. Production from these assets is expected to increase in the fourth quarter of this year.
The company will also sell its 65 million cubic feet equivalent a day Farrell Creek production facilities. The transaction will represent C$800m in drilling costs by the end of the year.
Talisman Energy CEO Hal Kvisle said that the sale represents a better return on the company’s Montney investment and will bring it closer to achieving the asset disposition target for $2bn to $3bn set out in March.
"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," Kvisle added.
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By GlobalDataThe acquisition includes wells, pipelines and processing plants in the Greater Farrell and Great Cypress areas. The company will use the proceeds to pay down debt and strengthen its balance sheet.
Progress Energy president and CEO Michael Culbert said: "These natural gas interests are an attractive complement to our existing North Montney asset base in northeastern British Columbia and are among the largest remaining North Montney lands not dedicated to a potential liquefied natural gas (LNG) project."
