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:

Statoil Is Now An Eagle Ford Operator - Takes Over 50% Of Talisman's Operations

July 11, 2013 R.T. Dukes

Statoil now operates half of the company's Eagle Ford venture. The company has almost three years of experience in the play, but did not operate a rig in the area until April of this year.

Since the first quarter, Talisman, Statoil's partner, has been transferring 50% of the JV's operations to the Norwegian company.

The Talisman - Statoil Eagle Ford JV has been active in South Texas for almost three years. When the JV was first agreed it was understood Statoil would begin to operate 50% of the venture at some point.

That day has come. Statoil will operate assets located in Bee, DeWitt, Karnes, and Live Oak counties, while Talisman will retain operations in Dimmit, La Salle, and McMullen counties.

The companies' Eagle Ford position was built over the past few years. A few highlights are included below.

“Statoil is the logical buyer I’d wager they would have likely agreed to a transaction if the price Talisman was asking wasn’t a little (or too) high. ”

The Talisman article from June is an interesting one. It was leaked that Talisman is shopping for Eagle Ford buyers.

Talisman announced plans to divest non-core assets earlier in the year, but adding the Eagle Ford to that group was a bit of a surprise. It honestly sounds like they are looking for a price they can't say no to. It is my opinion Statoil is the logical buyer and would have likely agreed to a transaction if the price Talisman was asking wasn't a little (or too) high.

Talisman Energy Shopping For Eagle Ford Buyers

June 19, 2013 R.T. Dukes

Talisman Energy has retained the Royal Bank of Canada to determine if buyers are interested in the company's Eagle Ford acreage.

Talisman previously announced plans to divest $2-3 billion in non-core assets. The Eagle Ford is a core holding, but there are hopes the company could get as much as $2 billion for its 74,000 acres and 30,000 boe/d (2013 guidance).

Talisman has already transferred operatorship of three rigs to Statoil, so the company's operations are smaller today. Statoil will operate half of the JV's acreage once they get to full scale. Talisman and Statoil agreed to an Eagle Ford JV in 2010.

The most logical buyer is Statoil, but we'll have to wait to see if the company has the confidence in the area to pay a premium for complimentary acreage.

Talisman estimates its Eagle Ford acreage holds:

450 mmboe in resource
1,000 gross remaining well locations
Wells are 60% liquids
Average IP is 1,100 boe/d
Well costs average $8.5 million

A Reuters article also noted:

“One of the sources said that outperformance by peers in the Eagle Ford could be adding to pressure on the Calgary, Alberta-based company.”

Read the full article at reuters.com

Double Eagle Pipeline Moving Eagle Ford Condensate to Corpus Christi

June 5, 2013 R.T. Dukes

Double Eagle Pipeline - Eagle Ford Condensate System

Double Eagle Pipeline, LLC, a joint venture between Kinder Morgan and Magellan Midstream, has started moving condensate to Corpus Christi.

The pipeline is part of a project that was started by Copano and Magellan, but is operated by Kinder Morgan who purchased Copano earlier in 2013.

Condensate is moving from a truck unloading facility in Three Rivers to Magellan's Corpus Christi Terminal. From the Corpus Terminal, condensate can reach local petrochemical plants, as well as water borne export options.

This leg is just a portion of what is a $150 million project that includes 140 miles of 12-inch pipelines. The system connects with other Kinder Morgan pipelines in the area as well.

The next leg of the pipeline from Gardendale (near Cotulla) to Three Rivers is expected to be online in the third quarter of 2013. Initial capacity is planned at 100,000 b/d, but the system can be expanded to handle 150,000 b/d.

The pipeline was supported by long-term commitments from Talisman and Statoil.