AN26: Talisman Energy Inc.: Talisman Energy Completes $1.5 Billion North Sea
Transaction with Sinopec
UK Regulatory Announcement
Talisman Energy Inc. (Talisman) (TSX:TLM) (NYSE:TLM) today announced the
completion of its joint venture transaction with Addax Petroleum UK Limited
(APUK), an indirect wholly-owned subsidiary of China Petrochemical Corporation
(Sinopec Group) following receipt of government and regulatory approval.
“We are very pleased to be partnering with Sinopec in the UK North Sea,” said
Hal Kvisle, President and CEO of Talisman Energy Inc. “This transaction
supports a number of Talisman’s key priorities. The proceeds will be used to
strengthen our balance sheet, fund our global capital program and give us the
financial flexibility to invest in future opportunities. Sinopec will now fund
49% of the UK capital program, allowing us to increase overall investment in
the assets, which will lead to improved operational performance and a stronger
UK North Sea business. We look forward to working with Sinopec in the years
The completion follows the original announcement of the transaction in July
this year. Sinopec Group has acquired a 49% equity interest in Talisman’s UK
North Sea business, Talisman Energy (UK) Limited (TEUK), for $1.5 billion.
Talisman will continue to hold 51% of the joint venture company. The UK North
Sea will be a smaller part of Talisman’s overall portfolio, but remains an
important part of its North Sea business.
The focus of the joint venture will be to continue investment in asset
integrity and improve ongoing operating performance as well as accelerating
infill drilling, unlocking additional infrastructure-led exploration
opportunities and executing major projects, thereby extending field life and
Talisman Energy (UK) Limited will be renamed Talisman Sinopec Energy UK
Notes to Editors
Sinopec Group has acquired 49% of the shares of TEUK for $1.5 billion, before
adjustments for working capital and interest, creating an incorporated joint
venture in which Talisman will continue to hold 51% of the shares. This will
proportionately reduce Talisman’s share of capital spending, production and
abandonment liabilities for its UK business.
Talisman Sinopec Energy UK Limited will operate the assets, and Sinopec Group
will appoint select personnel into key positions within the organization,
strengthening an already strong team. The joint venture company is based in
Aberdeen, Scotland and employs 564 full-time employees, with approximately
1,950 core contractors.
About Talisman in the UK
Talisman entered the North Sea in 1994 and today holds operated and
non-operated interests in 46 fields, and operates 11 offshore installations
and an onshore terminal. The portfolio includes opportunities for infill
wells, project developments and exploration.
About Addax Petroleum
Addax Petroleum Corporation ("Addax Petroleum") is an international oil and
gas exploration and production company, founded in 1994, and acquired in 2009
by Sinopec International Exploration and Production Corporation (SIPC), a
wholly-owned subsidiary of Sinopec Group. Addax Petroleum holds a number of
producing assets and exploration and development properties in West Africa and
the Kurdistan Region of Iraq, and, through APUK, is expanding its activities
into the North Sea. Further information about Addax Petroleum is available at
About Sinopec Group
China Petrochemical Corporation (Sinopec Group) is China’s largest, and one of
the world’s largest integrated energy and petrochemical companies, with
business scope across the entire oil & gas value chain. The operations cover
exploration and development of resources, storage and transportation of oil
and gas, refining and petrochemical production, and sales of refined products
in Australasia, Central Asia, the Middle East, Africa, North America and South
America. In 2011, the Sinopec Group ranked 5th among the Fortune Global 500
companies. Further information about Sinopec group is available at
About Talisman Energy Inc.
Talisman Energy Inc. is a global upstream oil and gas company, headquartered
in Canada. Talisman has three main operating areas: the Americas (North
America and Colombia), Southeast Asia and the North Sea, with an active
exploration program across all three. Talisman is committed to conducting
business safely, in a socially and environmentally responsible manner, and is
included in the Dow Jones Sustainability (North America) Index. Talisman is
listed on the Toronto and New York stock exchanges under the symbol TLM.
Please visit our website at www.talisman-energy.com.
This news release contains information that constitutes "forward-looking
information" or "forward-looking statements" (collectively "forward-looking
information") within the meaning of applicable securities legislation. This
forward-looking information includes, among others, statements regarding:
business strategy, priorities and plans; planned use of proceeds from the
closing of the transaction; expected proportionate reduction in capital
spending, production and abandonment liabilities by Talisman; planned
investment increase over the next several years, collectively by Talisman and
Sinopec, in the UK and resulting planned infill drilling, infrastructure-led
exploration and execution of major projects; expected operational performance
improvements, extension in field life and deferral of decommissioning; and
other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events, conditions, results
of operations or performance.
The factors or assumptions on which the forward-looking information is based
include: assumptions inherent in current guidance; projected capital
investment levels; the flexibility of capital spending plans and the
associated sources of funding; the successful and timely implementation of
capital projects; the continuation of tax, royalty and regulatory regimes;
ability to obtain regulatory and partner approval; commodity price and cost
assumptions; and other risks and uncertainties described in the filings made
by Talisman with securities regulatory authorities.Talisman believes the
material factors, expectations and assumptions reflected in the
forward-looking information are reasonable but no assurance can be given that
these factors, expectations and assumptions will prove to be
correct.Forward-looking information for periods past 2012 assumes escalating
commodity prices. Closing of any transactions will be subject to receipt of
all necessary regulatory approvals and completion of definitive agreements.
Undue reliance should not be placed on forward-looking information.
Forward-looking information is based on current expectations, estimates and
projections that involve a number of risks which could cause actual results to
vary and in some instances to differ materially from those anticipated by
Talisman and described in the forward-looking information contained in this
news release. The material risk factors include, but are not limitedto: the
risks of the oil and gas industry, such as operational risks in exploring for,
developing and producing crude oil and natural gas, market demand and
unpredictable facilities outages; risks and uncertainties involving geology of
oil and gas deposits; uncertainty related to securing sufficient egress and
markets to meet shale gas production; the uncertainty of reserves and
resources estimates, reserves life and underlying reservoir risk; the
uncertainty of estimates and projections relating to production, costs and
expenses; the impact of the economy on the ability of the counterparties to
the Talisman's commodity price derivative contracts to meet their obligations
under the contracts; potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; fluctuations in
oil and gas prices, foreign currency exchange rates and interest rates; the
outcome and effects of any future acquisitions and dispositions; health,
safety and environmental risks; uncertainties as to the availability and cost
of financing and changes in capital markets; risks in conducting foreign
operations (for example, political and fiscal instability or the possibility
of civil unrest or military action); changes in general economic and business
conditions; the possibility that government policies or laws may change or
governmental approvals may be delayed or withheld; and results of Talisman's
risk mitigation strategies, including insurance and any hedging activities.
The foregoing list of risk factors is not exhaustive. Additional information
on these and other factors which could affect Talisman's operations or
financial results or strategy are included in Talisman's most recent Annual
Information Form. In addition, information is available in Talisman's other
reports on file with Canadian securities regulatory authorities and theUnited
States Securities and Exchange Commission.Forward-looking information is
based on the estimates and opinions of Talisman's management at the time the
information is presented. Talisman assumes no obligation to update
forward-looking information should circumstances or management's estimates or
opinions change, except as required bylaw.
Dollar amounts are presented in US dollars.
For media enquiries or further information, please contact:
Talisman Sinopec Energy UK Limited
UK Corporate Affairs & Communications
Phone: 01224 501087
Media and General Inquiries Shareholder and Investor Inquiries
Phoebe Buckland Lyle McLeod, Vice-President
External Communications Investor Relations
Talisman Energy Inc. Talisman Energy Inc.
Phone: 403-237-1536 Phone: 403-237-1020
E-mail: email@example.com E-mail: firstname.lastname@example.org
Talisman Energy Inc.
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