Talisman offers $344 million for Lundin in takeover bid

Talisman Energy Inc. Thursday launched an all-cash bid to take over Lundin Oil AB for $344 million, equivalent to $3.43 for each Class A and Class B share of the Swedish oil and gas company. Under the offer, Talisman would get all of Lundin's assets in the North Sea, Malaysia, Viet Nam, and Papua New Guinea.


By the OGJ Online Staff

LONDON, June 21 -- Talisman Energy Inc. Thursday launched an all-cash bid to take over Lundin Oil AB for $344 million, equivalent to $3.43 for each Class A and Class B share of the Swedish oil and gas company.

Under the offer, being made through the Canadian independent oil and gas company's Swedish subsidiary, Talisman would get all of Lundin's assets in the North Sea, Malaysia, Viet Nam, and Papua New Guinea.

The takeover deal would also transfer all of Lundin's interests in Sudan and Russia to a new spin-off company, Newco, which would be managed by the current Lundin management team.

Separately, Lundin's Libyan assets would be sold to Petro-Canada for $75 million. Those assets include a 25% interest in the En Naga block in the Sirte basin. The other 75% interest is held by the National Oil Co. of Libya.

Talisman CEO Jim Buckee said, "Our strategy is to seek opportunities that provide near-term development and also to enter provinces well suited to our operating style and skills. Lundin's Malaysian position, much like Talisman's prior successful entries in the North Sea and Sudan, meets both objectives."

Talisman expects Malaysia to become a core area for the company by 2004 with production of more than 50,000 boe/d.

"This transaction provides another long-term growth vehicle for Talisman shareholders in a new core area and also a desirable set of North Sea assets: 70% of Lundin's North Sea production is from assets where Talisman already has a significant interest," Buckee noted.

He said the takeover offer, said by Talisman to represent a premium of some 52% over the price of Lundin shares on May 15, had the support of the Lundin family and Lundin board.

Should the bid be successful, it would add over 50 million boe of proved reserves and around 140 million boe of probable, at a cost of $6/boe.

In the UK North Sea, Talisman would add non-operated interests in the producing Brae (1.5-1.6%), Sedgwick (20%), Claymore (3.43%), Nelson (1.31%), Ninian (4.25%), Acorn/Beechnut (8.78%), and Enoch/J Block (1.5%) fields, along with an exploration portfolio made up of 10 blocks with non-operated interests.

In Malaysia, Talisman would get Lundin's interests in two offshore assets, producing Block PM-3 (41.44%), and exploration Block PM-305 (60%).

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