Talisman likes proximity of Highridge energy assets
CALGARY, June 14 (Reuters) - Talisman Energy Inc. (Toronto:TLM.TO - news) was enticed to bid for small oil explorer Highridge Exploration Ltd. (Toronto:HRE.TO - news) by the nearness of Highridge's Canadian properties to its own, Talisman's chief executive said Monday.
Calgary-based Talisman, one of Canada's most prominent oil and gas producers, late last week rode in as a white knight in what had been a hostile takeover attempt for Highridge, also of Calgary, by the Canadian unit of Tulsa, Okla.-based Samson Investment Co.
Following an auction in the wake of the Samson bid, Talisman offered 0.11 of one of its shares for each Highridge share, a deal that would value Highridge at C$4.35 a share. The total value would be about C$90 million, including Highridge's debt.
The friendly offer eclipsed Samson's C$3.55-a-share all-cash offer.
''It's a nice company with 75 percent overlap with our properties,'' Talisman Chief Executive Jim Buckee said after a speech to an oil and gas symposium.
Buckee noted the close proximity, especially of Highridge's properties in the Whitecourt and McLeod areas of western Alberta to Talisman's.
Highridge produces 1,250 barrels of oil and 17.5 million cubic feet of gas a day. It also has 127,300 acres of undeveloped natural gas exploration land.
Meanwhile, Buckee said Talisman was expected to pore over financial and operating data being displayed by fellow international producer Rigel Energy Corp. (Toronto:RJL.TO - news) The two companies share properties in the North Sea, such as the much-watched Blake oil field.
Buckee cautioned, however, that his company -- often speculated as a logical suitor for Rigel -- would tread gingerly and not buy it at any cost.
Rigel placed itself on the auction block last month after getting expressions of interest from undisclosed third parties, and was scheduled to start the process by opening data rooms on Monday.
''As you can see with Highridge, there are lots of ways that we can get rapid access to acreage, and we're already in Blake,'' he said. ''So, it would be nice, but we're certainly not going to chase it.''
However, he said he would ''of course'' consider a friendly deal if Rigel approached Talisman.
''I hope that's an outcome, but they have initiated a long, drawn-out process and it's very hard to tell what the outcome is on that sort of thing.''
Buckee said he expected his company to be producing at least 290,000 barrels of oil equivalent worldwide by the end of this year, up from an expected 1999 average of 255,000.
Up to 37,500 barrels per day of that is slated to come from its 25 percent stake in a major oil development project in Sudan.
Talisman and its international partners in the project are expected to begin exporting crude by early August after a month of filling a new pipeline with 3.5 million barrels of oil from the southern Sudan fields.
Talisman shares on the Toronto Stock Exchange were off 55 Canadian cents to C$40.10 in late trade on Monday.
($1=$1.46 Canadian)
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