Repsol has entered into an agreement to acquire 100% of Canadian oil company Talisman Energy worth US$8.3 billion plus debt. The transaction has been unanimously approved and recommended by the boards of directors of Talisman Energy and Repsol.
The deal will transform Repsol into one of the largest energy groups worldwide, increasing its presence in politically stable OECD countries and reinforcing its upstream business, which has become the company’s growth engine. Talisman will contribute producing and exploration assets in North America (Canada and US) and Southeast Asia (Indonesia, Malaysia, and Vietnam), as well as in Colombia and Norway, among others.
Repsol will increase its output 76% to 680,000 barrels of oil equivalent per day and will boost reserves by 55% to more than 2.3 billion barrels of oil equivalent.
Once the transaction is complete, North America’s weight in the resulting company will increase to almost 50% of capital employed in exploration. Latin America will represent 22%. Canada and the US currently make up 10% of Repsol production, and the resulting company will allocate 30% of its capital employed to the region, totaling approximately US$15 billion.
The acquisition will be financed with cash obtained from the recovery of value from YPF following its expropriation (US$6.3 billion) and from other sources of liquidity available to the company. The transaction, based on an offer of US$8 per share, will be accretive for Repsol in financial and operating terms from the first full year after integration.
The transaction is expected to be complete in mid-2015.
Source: Oil & Gas Financial Journal