Progress Energy agrees to purchase Talisman's Montney natural gas interests in British Columbia

Nov 08, 2013, 06:00 ET from Progress Energy Canada Ltd.

CALGARY, Nov. 8, 2013 /CNW/ - Progress Energy Canada Ltd. (Progress Energy), a subsidiary of Petroliam Nasional Berhad (PETRONAS), has reached an agreement to acquire an interest in two partnerships from Talisman Energy Inc. (Talisman). The acquisition includes about 127,000 net acres of Montney lands and production, as of October 1, 2013, of approximately 11,000 barrels of oil equivalent per day, which is expected to increase in the fourth quarter of 2013.

"These natural gas interests are an attractive complement to our existing North Montney asset base in northeastern British Columbia and are among the largest remaining North Montney lands not dedicated to a potential liquefied natural gas (LNG) project. The location, resource potential and operational synergies of these assets make this an ideal fit that expands our British Columbia resource base and increases our land position to 1.2 million acres," said Michael Culbert, President & CEO of Progress Energy.

The acquisition includes wells, pipelines and processing plants in the Greater Farrell and Great Cypress areas. Progress Energy will be acquiring Talisman's 50 percent interest in Greater Farrell, where Talisman's partner owns the remaining 50 percent interest. Under the terms of the Talisman partnership, the partner pays a disproportionate share of development costs. The value of this "capital carry" is approximately $870 million at the October 1, 2013 effective date, and will be used to fund a portion of Progress Energy's share of capital investments in Greater Farrell area over the coming years. This capital carry offsets the total Progress Energy acquisition cost of approximately $1.5 billion. In addition, Progress Energy will acquire Talisman's partnership interest in the Greater Cypress area where Progress Energy has joint operations with Talisman. The acquisition is subject to customary closing conditions and adjustments, including the approval of Industry Canada.

About Progress Energy

Progress Energy, a leader in Canadian natural gas development, is building upon its history of performance excellence in North America to pioneer new infrastructure for delivering LNG to Pacific Rim markets. Producing more than 350 million cubic feet equivalent of natural gas per day in northeast British Columbia and northwest Alberta, Progress is serving Canadian markets and ambitiously expanding productive capacity on its large Montney land holdings in preparation for the opening of new LNG markets in Asia. Progress is wholly owned by PETRONAS of Malaysia, a global leader in LNG and the principal owner of Vancouver-based Pacific NorthWest LNG Ltd. Progress and Pacific NorthWest LNG are helping craft a bright new future for Canada's energy exports.

SOURCE Progress Energy Canada Ltd.