Canadian Manufacturing

Talisman Energy sells stake in Colombian pipeline for $632M

Pair of affiliate firms sold interest in Ocensa pipeline to investment group led by Advent International

December 10, 2013  by Canadian Manufacturing Daily Staff

CALGARY—Calgary-based Talisman Energy Inc. said a pair of its affiliates are selling their combined 12 per cent stake in a Colombian pipeline for $632-million as the company looks to climb back into the black.

Talisman, which earlier this year announced plans to streamline its operations and get back on financial track after posting an operating loss of $27-million in the summer, said its undisclosed affiliate firms sold the interest in the Ocensa pipeline in the South American nation to an investment group led by Advent International.

“In March, I set a $2- to 3-billion, 18-month disposition target for Talisman,” company president and CEO Hal Kvisle said in a statement about the asset sale.

“In November, we announced the sale of the majority of our Montney position for $1.5-billion, which when combined with some small Canadian assets and our equity interest in the Ocensa pipeline, brings our sale proceeds to approximately $2.2-billion.”


Kvisle said the proceeds of the sales will be used to reduce debt and balance the budget.

The sale of the Ocensa stake was part of a larger sales process where Total SA affiliate Total Colombia Pipeline also sold its stake in the project to the investment group.

The Advent-led group now owns a 22 per cent stake in Ocensa, according to Talisman.

An undisclosed number of “other Talisman affiliates” will retain crude transportation rights for approximately 63,000 barrels per day on the line, the company announced.

“Through this transaction, we have unlocked net value from our portfolio and retained our crude transportation rights,” Kvisle said. “This enables us to maintain our competitive advantage by transporting oil from our own operations and generating third party revenue from any surplus capacity.”

2013 has been a rough year for Talisman, which first reported 90 layoffs from its Calgary offices in January as part of an effort to streamline its operations.

Two months later, in March, it trimmed its capital budget by 25 per cent to further reel in costs as lower than normal North American natural gas prices wreaked havoc on profits.

Last month it sold interests in two British Columbia natural gas partnerships to Progress Energy Corp. for $1.5-billion.

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