Sasol Ltd. acquires 50% stake in Talisman Energy’s shale natural gas assets

15-Jun-11
South African petrochemicals group Sasol Ltd has acquired a 50% stake in Canadian energy explorer Talisman Energy Inc’s prolific Montney Basin shale natural gas assets in western Alberta and north-eastern British Columbia for approximately C$1050 mln as per Bloomberg. The transaction – which was declared in March, is the second between the two companies in recent times, and was completed following regulatory and shareholder approvals. Per the agreement, Johannesburg-based Sasol and Alberta-based Talisman will split ownership in 57,000 acres of Talisman's Cypress A properties that are estimated to contain 11.2 trillion cubic feet of natural gas. In the first strategic partnership signed in December 2010 and concluded in March, Sasol made its foray into North American shale gas market by agreeing to pay C$1050 mln to acquire a 50% stake in another of Talisman’s Montney shale properties, Farrell Creek, which holds an estimated 9.6 trillion cubic feet of gas. The company plans to leverage the opportunity to arbitrage between gas and oil prices. Under normal circumstances, the ratio of the price of oil (measured in $ per barrel) to the price of natural gas (in $ per million British thermal units) fluctuates between 6 and 12. However, in recent times, this has risen to around 20.
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