By the OGJ Online Staff
HOUSTON, Apr. 10 -- Talisman Energy Inc., Calgary, Tuesday announced plans to acquire Petromet Resources Ltd., Calgary, for $806 million (Can.).
It will pay $13.20 (Can.)/share for Petromet stock, about $731 million in cash, and assume debt of $75 million.
With this acquisition, Talisman's Canadian gas production is expected to average more than 850 MMcfd in 2001 and 975 MMcfd in 2002.
Jim Buckee, Talisman�s president and CEO, said, "Petromet's assets tie nicely into our rapidly growing west Edson region. We have been building on our existing land base near the Talisman-operated Edson gas plant over the past year with the acquisition of midstream assets, land purchases near Findley, and the recent addition of properties acquired from Benson Petroleum."
Petromet has 291 bcf of proved gas reserves and 7 million bbl of oil and liquids with an established reserve life index of 7.2 years proved. Petromet also holds the rights to 400,000 acres of land, mostly west of Edson, with 230 identified drilling locations.
Acquisition costs net of the value of land, seismic, and tax pools is $638 million or $1.92/Mcf equivalent on a proved basis. The acquisition is expected to generate more than $250 million of cash flow this year.
Petromet's production for the rest of 2001 is estimated at 110 MMcfd of gas and 2,000 b/d of liquids. More than 90% of the asset value is concentrated in two properties at Bigstone and Wild River. Petromet's average working interest in its production is 85%. The acquisition is expected to be completed by late May. Petromet�s board unanimously recommended acceptance of the offer.