Talisman Energy (TSX: TLM, NYSE: TLM) announced today it has agreed to sell a 50% stake in its Farrell Creek gas field in British Columbia to South Africa-based Sasol (NYSE:SSL) for $1.05 billion.
"This is a strategic move towards unlocking some of the value of our Montney assets for us and our new partner, consistent with the strategy of de-risking and developing Talisman's very large shale opportunities in the region," said John A. Manzoni, CEO of Talisman.
As part of the agreement, the two firms also have agreed to conduct a feasibility study for a facility in western Canada to convert natural gas to liquid fuels, using Sasol's Gas to Liquids (GTL) technology.
Farrell Creek represents about 22%, or 9.6 trillion cubic feet equivalent, of Talisman's resource potential in the Montney shale play and about 27% of the company's 190 thousand net Tier 1 acres of land in the Montney.
Production at Farrell Creek is expected to finish the year at between 40-60 millions of cubic feet equivalent per day (mmcfe/d). Talisman's processing facilities at Farrell Creek have been expanded to 120 mmcf/d.
After closing of the deal, expected in the first half of 2011, Talisman will become the operator of the project.