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South African energy and chemicals group Sasol, announced it signed an agreement with the Canadian-based Talisman Energy to acquire a 50% stake in their Farrell Creek shale gas assets located in the Montney basin, of British Columbia.
The CAD$1 050 million (ZAR7 119 million) acquisition, will see Talisman Energy retain the remaining 50% interest and continue as operator of the Farrell Creek assets, that include associated gas gathering systems and processing facilities. “The acquisition of this high quality natural gas asset will accelerate our upstream growth while also potentially advancing Sasol’s already strong GTL value proposition utilising our proprietary technology”, said Sasol chief executive, Pat Davies. “We’re very pleased to be partnering with an experienced international shale gas operator such as Talisman, allowing us to reap the dual benefit of leveraging their experience, as we grow our own shale gas expertise,” Davies said. Assets included in the transaction cover over 51,000 acres of land represents an estimated contingent resource of 9.6 trillion cubic feet (TCF). “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, President & CEO of Talisman. “We believe this transaction reflects the quality and potential of our broader Montney position. We are delighted to have Sasol as a partner. They are a world-class company and their expertise will enable us to jointly explore the option of a GTL facility in western Canada.” The location of the Farrell Creek assets, with its low operational risk and the proximity of, and access to, the existing North American pipeline infrastructure makes the Farrell Creek assets sustainable, on a long-term, stand-alone basis. The existing pipeline infrastructure in North America also allows for other gas monetisation options in the future, such as providing for the potential to use the gas as feedstock in an integrated GTL project in the region. As part of the agreement, Sasol and Talisman have agreed to conduct a feasibility study around the economic viability of a facility in western Canada to convert natural gas to liquid fuels using Sasol’s Gas to Liquids (GTL) technology. This could provide a strategic alternative to traditional North American pipeline or LNG marketing. The two companies have also agreed to collaborate on other western Canadian natural gas opportunities. The transaction is conditional upon the exchange control approvals required by the South African Reserve Bank and other regulatory approvals required. Sasol expects the transaction to close within the first half of 2011. |
