REPSOL OIL & GAS CANADA INC. company history: the story so far

History

Talisman Energy shrank through asset sales, pushed into shale and Papua New Guinea, then was bought by Repsol in 2015 and renamed Repsol Oil & Gas Canada.

2006-2009: Buybacks and asset sales

The record opens in May 2006, when Talisman Energy split each common share into three. The filing gave no reason. By the end of 2007 the company had bought back C$951 million of its own shares, leaving 1,019 million outstanding. It also sold a further 28,000 barrels of oil equivalent a day (boe/d) of non-core assets.

In March 2008 John Manzoni became President and CEO, succeeding Dr. Jim Buckee, who had led the company since 1992. Net income for 2007 was a record C$2.1 billion, but earnings from continuing operations fell to C$978 million from C$1,501 million. Production fell 7% to 452,000 boe/d, which management blamed on asset sales, lower North American spending and North Sea project delays. A strategic review began.

The 2009 annual report showed the effect of low commodity prices. Cash flow fell 36% to C$3,961 million and net income was C$437 million, against C$3.5 billion in 2008. About C$2.7 billion of asset sales cut net debt to C$2.1 billion from C$3.95 billion. Production was 425,000 boe/d, and shares outstanding were still 1,019 million.

2010-2012: Shale and Papua New Guinea

The company then turned to growth. The 2009 report described a push into North American shale (rock that must be fractured to release gas and oil) in the Marcellus and Montney areas, a new Papua New Guinea land position, and planned capital spending up almost C$1 billion in 2010.

In October 2010 Talisman agreed a 50/50 joint venture with Statoil to buy 97,000 net acres of Eagle Ford shale in Texas for US$1.325 billion. After Statoil bought half of Talisman's existing acreage, Talisman's net cost was about US$485 million for about 70,000 net acres. Closing was expected by year end; the filings do not confirm it.

In February 2012 Talisman agreed a farmout (a partner pays to earn a stake) of nine Papua New Guinea licences to Mitsubishi Corporation, worth about US$280 million as a capital carry rather than cash. Talisman would hold an average 40% and Mitsubishi 20%, subject to approvals. A four-well drilling program was planned for 2012. The record does not show the outcome.

2015-2016: Taken over by Repsol

The record is quiet from 2012 until 2015. On May 8, 2015, Repsol, S.A. completed its takeover of Talisman through its subsidiary TAPBC Acquisition Inc., under an agreement dated December 15, 2014. Each common share received $8.00. Series 1 preferred holders were due Cdn. $25.00 plus accrued dividends only if a Preferred Share Acquisition Condition was met. The filings do not show whether it was.

On May 12, 2015, the Series 1 preferred shares were converted one-for-one into common shares, and the Series 1 and Series 2 preferred series were removed from the authorized shares. Talisman was to remain a reporting issuer in Canada. Effective January 1, 2016, it was renamed Repsol Oil & Gas Canada Inc.

Written from the 8 story beats below (2006 to 15 May 2015), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

2015

15 May
Talisman filed articles of amendment dated May 12, 2015, four days after the Repsol arrangement took effect, converting all outstanding Series 1 preferred shares into common shares one-for-one. It also removed the Series 1 and Series 2 preferred share series from the company's authorized shares entirely. The filing does not say why, or give any payment to preferred holders. It follows the arrangement completed May 8, 2015, and ends the Series 1 preferred shares as a separate class.
material agreement
15 May
Talisman filed the Certificate and Articles of Arrangement showing the Repsol takeover took effect on May 8, 2015, as scheduled. Under the plan, each common share receives $8.00 and each Series 1 preferred share receives Cdn. $25.00 plus accrued unpaid dividends; the preferred payout applies only if the Preferred Share Acquisition Condition is met (preferred holders approve and dissent is limited to 10% or waived). The buyer is Repsol, S.A. through its subsidiary TAPBC Acquisition Inc., under an agreement dated December 15, 2014. The filed text is truncated, so the mechanics of how shares are transferred are not visible.
business combination
7 May
Talisman filed governance and executive pay disclosure that would normally go in a proxy circular, because it will not hold an annual meeting. This is due to a Repsol subsidiary (AcquisitionCo) acquiring all of Talisman's shares under an arrangement agreement with Repsol S.A., scheduled to complete May 8, 2015. Talisman will remain a reporting issuer in Canada after completion. This is the filing that sets up the Repsol takeover which later led to the Repsol Oil & Gas Canada name; the filing itself does not state the price or what shareholders receive.
business combination

2012

22 Feb
Talisman agreed to bring Mitsubishi Corporation into nine of its onshore Papua New Guinea licences through a farmout effective January 1, 2012, valued at about US$280 million and paid as a capital carry (not cash to Talisman, as described). After the deal Talisman would hold an average 40% and Mitsubishi 20% in those licences; it needs government and partner approvals. It builds on the Papua New Guinea land position noted in the 2009 annual report, and a four-well drilling program is planned for 2012.
joint venture update

2010

12 Oct
Talisman agreed to a 50/50 joint venture with Statoil to buy 97,000 net acres of Eagle Ford shale in south Texas from Enduring Resources for US$1.325 billion in total. After Statoil buys half of Talisman's existing 37,000 net acres, Talisman's net cost is about US$485 million and it will hold about 70,000 net acres. Closing is expected by year end, subject to regulatory approvals. This extends the 2010 shale push (Marcellus, Montney) described in the 2009 annual report.
business combination
25 Mar
Talisman filed its 2009 annual report. Cash flow was C$3,961 million, down 36% from 2008, which the report attributes mainly to low commodity prices. Net income was C$437 million versus C$3.5 billion in 2008. About C$2.7 billion of non-core asset sales cut net debt to C$2.1 billion from C$3.95 billion, and production was 425,000 boe/d. The report describes a push into North American shale (Marcellus and Montney), a new Papua New Guinea land position, and a planned capital spending increase of almost C$1 billion in 2010. Shares outstanding were 1,019 million.
regulatory community update

2008

25 Mar
Talisman filed its 2007 annual report summary and related reports. John Manzoni was appointed President and CEO, succeeding Dr. Jim Buckee, who had led the company since 1992. Net income was a record C$2.1 billion but earnings from continuing operations were C$978 million, down from C$1,501 million in 2006. Production fell to 452,000 boe/d, 7% below 2006, which management attributes to asset sales, reduced North American capital spending and North Sea project delays. The company sold a further 28,000 boe/d of non-core assets and bought back C$951 million of shares, leaving 1,019 million shares outstanding. A strategic review was initiated.
regulatory community update

2006

15 May
Talisman Energy (the company that was later renamed Repsol Oil & Gas Canada) filed a certificate showing its articles were amended on May 9, 2006 so that each issued common share became three common shares. This is a three-for-one share split; the filing does not state the reason.
material agreement