Key positions traded by Paulson & Co. in 4Q14 (Part 3 of 11)
Paulson adds a new stake in Talisman Energy
Paulson took a new position in Talisman Energy (TLM) last quarter. The position accounts for 2.84% of Paulson’s fourth-quarter portfolio.
Overview of Talisman Energy
Talisman Energy is a global upstream oil and gas company headquartered in Canada . Its main business activities include exploration, development, production, transportation, and marketing of crude oil, natural gas, and natural gas liquids. It has two core operating areas:
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the Americas – North America and Colombia
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Asia-Pacific
It’s active in two shale gas plays in the US—the Marcellus and Eagle Ford.
Talisman Energy to be acquired by Repsol
In December, Talisman said that Spanish global energy company Repsol (REPYF) is acquiring it for $8, or 9.33 Canadian dollars, per share in cash. The purchase price represents a 75% premium on Talisman’s seven-day volume weighted average share price and a 60% premium on the 30-day volume weighted average price. The total transaction value is around $13 billion, including Talisman’s current debt. A release said the “combination of the two companies creates a global E&P company with improved scale, enhanced capabilities and more attractive opportunities for future growth.”
Talisman plans non-core asset sales
Talisman, which saw activist pressure from Carl Icahn last year, was the subject of speculation in November that it was in discussions to sell its Marcellus Shale pipeline operations to Regency Energy Partners (RGP). RGP is a part of several ETFs including the Alerian MLP ETF (AMLP), of which it makes up 4.76%.
In 2014, a Market Realist article noted that Regency Energy, as well as Williams Partners (WPZ), Crestwood Midstream (CMLP), MarkWest Energy Partners (MWE) are all interested in the Marcellus. For more on this topic, read Why midstream names are bullish on the Marcellus Shale gas play.
In November, Talisman said that it plans to sell off assets to achieve a $2 billion divestment goal by mid-2015. It also said it may see write-downs on its unprofitable United Kingdom North Sea assets in the fourth quarter.
Fourth-quarter net loss widens, brings impairment charges
Talisman’s 4Q14 net loss rose to $1.6 billion, or $1.54 per share, up from $1 billion, or $0.98 per share, in the corresponding quarter a year ago. Revenue plunged to $44 million, down from $929 million in the same quarter in 2013. The company’s latest earnings release notes that it recorded after-tax impairments during the fourth quarter of approximately $1.37 billion, due to a “deterioration in forward commodity prices.”