Canada: Progress Energy Buys B.C. Gas Assets from Talisman

Project & Tenders

November 14, 2013

Progress Energy Canada, a subsidiary of PETRONAS has reached an agreement to acquire an interest in two partnerships from Talisman Energy.

The acquisition includes about 127,000 net acres of Montney lands and production, as of October 1, 2013, of approximately 11,000 barrels of oil equivalent per day, which is expected to increase in the fourth quarter of 2013.

“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. The location, resource potential and operational synergies of these assets make this an ideal fit that expands our British Columbia resource base and increases our land position to 1.2 million acres,” said Michael Culbert, President & CEO of Progress Energy.

Under the terms of the Talisman partnership, the partner pays a disproportionate share of development costs. The value of this “capital carry” is approximately $870 million at the October 1, 2013 effective date, and will be used to fund a portion of Progress Energy’s share of capital investments in Greater Farrell area over the coming years.

This capital carry offsets the total Progress Energy acquisition cost of approximately $1.5 billion. In addition, Progress Energy will acquire Talisman’s partnership interest in the Greater Cypress area where Progress Energy has joint operations with Talisman.

The acquisition is subject to customary closing conditions and adjustments, including the approval of Industry Canada.

[mappress]

LNG World News Staff, November 14, 2013; Image: Talisman

Progress Energy Canada Ltd. (Progress
Energy), a subsidiary of Petroliam Nasional Berhad (PETRONAS), has
reached an agreement to acquire an interest in two partnerships from
Talisman Energy Inc. (Talisman). The acquisition includes about 127,000
net acres of Montney lands and production, as of October 1, 2013, of
approximately 11,000 barrels of oil equivalent per day, which is
expected to increase in the fourth quarter of 2013.

“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. The location, resource
potential and operational synergies of these assets make this an ideal
fit that expands our British Columbia resource base and increases our
land position to 1.2 million acres,” said Michael Culbert, President &
CEO of Progress Energy.

The acquisition includes wells, pipelines and processing plants in the
Greater Farrell and Great Cypress areas. Progress Energy will be
acquiring Talisman’s 50 percent interest in Greater Farrell, where
Talisman’s partner owns the remaining 50 percent interest. Under the
terms of the Talisman partnership, the partner pays a disproportionate
share of development costs. The value of this “capital carry” is
approximately $870 million at the October 1, 2013 effective date, and
will be used to fund a portion of Progress Energy’s share of capital
investments in Greater Farrell area over the coming years. This capital
carry offsets the total Progress Energy acquisition cost of
approximately $1.5 billion. In addition, Progress Energy will acquire
Talisman’s partnership interest in the Greater Cypress area where
Progress Energy has joint operations with Talisman. The acquisition is
subject to customary closing conditions and adjustments, including the
approval of Industry Canada.

– See more at: https://www.progressenergy.com/progress-energy-agrees-to-purchase-talismans-montney-natural-gas-interests-in-british-columbia#sthash.p8e2x6ru.dpuf