Repsol Moves into the Eagle Ford

June 2, 2015 Elizabeth Alford

Rosetta-Noble Merger — Repsol Acquires Talisman

Repsol completed its acquisition of Talisman Energy last month and became one of the largest companies in the energy sector worldwide.

Related: Talisman Energy Cuts Jobs

The deal brings Repsol into the Eagle Ford and allows them to gain 59,000 net acres of south Texas land. It is still unclear how this merger will affect those Eagle Ford shale operations. In a conference call on May 10th, Repsol said that Talisman’s assets had been consolidated into its upstream division, but they were not ready to reveal further details about their plans.

The announcement comes days after Talisman released strong first quarter results.

“Talisman delivered solid operational and financial results in the first quarter of 2015 against a backdrop of significantly lower commodity prices and our strategic decision to cut capital investment,’ said Hal Kvisle, President and CEO. ‘Production from ongoing operations averaged 360,000 boe/d in the quarter, up slightly from the first quarter of 2014, and cash flow(1) was $605 million for the quarter, supported in large part by hedging settlements.”

First Quarter Highlights:

Production averaged 360,000 boe/d in the first quarter of 2015, up 2% from the first quarter of 2014.
Cash flow was $605 million, up 19% from the previous quarter
Capital spending was $436 million, down 48% from last quarter and 43% from the first quarter of 2014
Operating cost was $439 million, down 17% from the previous quarter and 15% from the first quarter of 2014.

Talisman Energy Cuts Jobs

March 23, 2015 Elizabeth Alford

Talisman Energy Inc., with extensive holdings in the Eagle Ford shale play, announced this week that it is cutting its workforce due to the continuing drop in crude prices.

Related: Energy Giants Announce Layoffs

Layoffs will affect between 150-200 employees and contractors from Talisman’s head office in Calgary. These cuts coincide with the company’s plans to trim its 2015 capital program to $2.1 billion, a 30 percent drop from 2014. So far, the company has not announced any job cuts in its Texas operations.

“Our decision to reduce our workforce numbers is based on the decline in global commodity prices, which has meant a reduced capital spending program for us this year. The impacts of the reductions are hitting all functions supporting all parts of the organization.”

— Talisman spokesperson, Brent Anderson

Oil prices have fluctuated since the first of the year. After a short move upwards, the price has hovered around the mid forties for the past two weeks.

In February, Talisman Energy shareholders finalized the sale of the company to Repsol and expected to close in the second quarter of 2015. The company announced that job cuts are unrelated to this acquisition.

Talisman’s interests in the Eagle Ford shale play are located in southeast Texas, where the Company now holds approximately 59,000 net acres of land in the following counties:

Repsol to Aquire Talisman Energy

February 19, 2015 Elizabeth Alford

Talisman Energy Eagle Ford Shale Acreage Map

Talisman Energy shareholders unanimously agreed Tuesday to a deal that would finalize the sale of the company to Repsol. The deal includes includes the valuable Eagle Ford assets of of approximately 61,000 net acres of land.

In an organizational letter in 2014, the President and CEO expressed optimism for the future saying, “2013 was a turnaround year for Talisman...and they are emerging as a stronger, more predictable company with better opportunities for profitable growth.” Unfortunately the drastic drop in crude prices proved too much for the company and shares began to drop sharply in November. A December announcement of the acquisition soon followed.

The company reported a $1.59 billion loss in the fourth quarter of 2014, and fell shy of its expected capex by $.2 billion. Additionally, the company reported that it would cut 300 jobs due to falling production and rising operating costs.

“This deal creates significant and immediate value for Talisman stakeholders,” said Chuck Williamson, Chairman of Talisman’s Board of Directors. “Importantly, the deal underscores Repsol’s strong belief in the high quality portfolio that Talisman has worked hard to develop. Repsol is a world-class operator with a solid track record and the financial capability to continue the development of these assets within their international portfolio. I am proud of the company that our employees, past and present, have built and I believe this transaction represents new opportunities for them in Canada and around the world.”

Highlights:

All-cash price of US$8.00 (C$9.33) per Talisman common share delivers significant and immediate value to Talisman common shareholders.
The $8.3 billion deal includes assumed debt of $4.7 billion
The transaction received the unanimous approval of Talisman's and Repsol's boards of directors.
Repsol and Talisman will create more competitive and more diversified global energy company, producing over 680 mboe/d, have refining capacity of 1 mboe/d, and have a presence in over 50 countries with 27,000 employees.
The transaction is targeted to close in the second quarter of 2015.

Talisman boasts that its Eagle Ford interests are among its most valuable assets. Currently, they are activity in the following Texas counties: