Talisman Reaches Deal to Acquire Fulmar and Auk Field from Shell & Exxon

Fulmar and Auk Fields
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Talisman Energy's subsidiary, Talisman Energy (UK) Limited, has reached agreement with Shell U.K. Limited and Esso Exploration and Production UK Limited, an ExxonMobil subsidiary, to acquire their combined 85.81% interest in the Fulmar unitized field (Blocks 30/11b and 30/16s) and a 100% interest in the Auk field (Blocks 30/16n and 30/16t) in the Central North Sea. The transaction is subject to normal consents, including UK Government approvals and the satisfaction of certain other conditions. Assuming successful completion of the transaction, Talisman is expected to assume operatorship later this year. The parties have agreed not to disclose the purchase price.

The transaction expands Talisman's existing Clyde core area assets in the Central North Sea and provides the opportunity for significant reserves and production growth. Talisman currently operates both the Clyde field (Talisman 95%) and Orion field (Talisman 93.7%), which, along with the Auk and Gannet fields, export volumes via the Fulmar production facilities. Talisman also has an existing 12.71% interest in the Fulmar field and has agreed to acquire Hess Limited's 1.48% interest in the Fulmar field, with the result that on completion of both transactions, Talisman will hold a 100% interest in the Fulmar field.

"This is a good business opportunity for Talisman and is a continuation of our successful development strategy in the North Sea," said Dr. Jim Buckee, President and Chief Executive Officer. "Production from the Auk and Fulmar interests is currently 8,000 barrels of oil per day and with redevelopment, there is significant upside. We believe there is an exciting opportunity to redevelop Auk, which has approximately 675 million barrels remaining oil in place. Successful application of horizontal wells in Auk has already been demonstrated and we intend to build on that experience to access further drilling opportunities in this large field and significantly increase reserves and production volumes.

"Fulmar is a vital production hub in this area, providing an export route for Auk, Clyde and Orion, as well as the Shell operated Gannet field. We expect that the combined Fulmar, Auk, Clyde and Orion operations will yield a number of operating efficiencies, which will help us to extend field life and enhance the ultimate recovery from all these assets."

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