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Talisman Energy To Sell 50% Interest In Farrell Creek Assets To Sasol: Sasol To Increase Its Upstream Oil And Gas Assets In Shale Gas Play - Deal Analysis From GlobalData
GlobalData, Dec 2010, Pages: 7
Talisman Energy To Sell 50% Interest In Farrell Creek Assets To Sasol: Sasol To Increase Its Upstream Oil And Gas Assets In Shale Gas Play - Deal Analysis From GlobalData
Summary
Talisman Energy Inc. (Talisman Energy) signed an agreement to sell 50% stake in Farrell Creek shale gas assets located in the Montney basin of northeastern British Columbia to Sasol Limited (Sasol), an integrated energy and chemical company, for a consideration of CAD1,050m ($1,036.34m). Of the total consideration, Sasol will pay 25% of the consideration (approximately CAD260m ($256.62m)) in cash at closing and carry 75% of Talisman's 50% portion of the future capital commitments in the Farrell Creek area up to a total of approximately CAD790m ($779.72 m). Thereafter, each partner will fund its 50% portion of the capital development costs for the Farrell Creek assets. The aggregate purchase consideration will be funded from surplus cash available within Sasol. The assets comprise 51,635 acres of land, which represents an estimated contingent resource of 9.6 trillion cubic feet (Tcf). As part of the agreement, Sasol and Talisman have agreed to conduct a feasibility study around the economic viability of a facility in western Canada to convert natural gas to liquid fuels using Sasol’s proprietary Gas to Liquids (GTL) technology. Following the completion of the transaction, Talisman, the operator of the Farrell Creek assets will hold 50%, and Sasol the remaining 50% interest in the assets. Goldman, Sachs & Co. and Jefferies & Company are acting as financial advisors for Talisman with respect to the transaction. The transaction is conditional upon the exchange control approvals required by the South African Reserve Bank and other regulatory approvals, and is expected to close within the first half of 2011. The effective date of the transaction is January 1, 2011. The transaction implies deal value of $0.65 per boe of contingent resources and $20, 070.49 per acre of land
Scope
- Rationale behind the transaction is that it will enable Sasol to increase its upstream oil and gas assets in Shale gas play
- Strategic Benefits for the companies involved
- Geography covered - Canada
- Deal Financials and Valuations
- Information on Talisman Energy, Sasol, Farrell Creek Assets
Reasons to buy
- Develop a sound understanding of the major M&A's, Partnerships, And Joint Ventures taking place in North American Oil & Gas industry
- Identify the most lucrative segments to leverage on the growth oppurtunities available in the US oil & gas market
- Get a detailed analysis of a deal to enable you to take better decisions
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