Talisman Energy acquires entry position in Norway

BP Norge AS agreed to sell Talisman Energy Norge AS its operated interest in the Norwegian Gyda field, associated facilities, adjacent acreage, and tax pools for $123 million (Can.).

May 20, 2003

2 min read

By OGJ editors

HOUSTON, May 20 -- BP Norge AS agreed to sell Talisman Energy Norge AS its operated interest in the Norwegian Gyda field, associated facilities, adjacent acreage, and tax pools for $123 million (Can.).

The transaction, subject to Norwegian government approval, will be effective retroactive to Jan. 1 upon closing. Talisman also secured a transportation agreement for the oil export pipeline.

The assets include a 61% working interest in license area PL 019B, comprising Blocks 2/1 and 7/12 and containing Gyda Field and platform facilities. Partners are DONG Norge AS, 34%, and Norske AEDC, 5%.

Talisman Energy Norge also is buying 61% of a 43 km, 12-in. pipeline from Gyda to the Ekofisk platform.

The deal also includes a 45% working interest in license area PL 019C within Block 2/1, containing the Kark prospect, and tax pools with an estimated undiscounted value of $56 million.

"This is a natural extension of our successful North Sea strategy," said the Calgary-based Talisman Energy Inc. Pres. and CEO Jim Buckee.

Talisman will acquire 18 million boe of net proven reserves for $3.70/boe (excluding tax pools).

"Assuming owner and government approval of Talisman's expected work program
over the next 4 years, we expect to be able to add approximately 24 million boe at an average pre-tax cost of $10/boe. Therefore, we expect aggregate pre-tax finding development and acquisition costs associated with this transaction will average $7.35.boe over this period," Buckee said.

Gyda net production currently is 8,000 boe/d, of which 90% is 42º gravity crude oil. The expected investment program could increase this to more than 20,000 boe/d by 2006.