ugnet_: AFRICANS I HAVE GOOD NEW_ Talisman still came out a winner!

[Fransis Tawoda]

Talisman Sells Sudan Oil Project for C$1.2 Bln


CALGARY, Alberta (Reuters) - Talisman Energy Inc. <TLM.TO> said on Wednesday it will sell its stake in a controversial Sudan oil project to India's Oil and Natural Gas Corp. <ONGC.BO> for C$1.2 billion ($758 million), removing uncertainty about its plans and pressure from critics that has dragged down its shares.

The announcement, made after markets closed, was accompanied by third-quarter financial results showing a 25 percent jump in earnings because of higher oil prices and increased oil and gas production.

Talisman expects to book a C$340 million accounting gain from selling its stake in the oil project, now producing about 250,000 barrels of oil per day.

"We received other proposals, but we consider this to be the most attractive opportunity, generating a full-cycle, after-tax rate of return of approximately 30 percent," Chief Executive Jim Buckee said in a statement.

It will use the proceeds to buy back enough shares to ensure 5 percent growth in production, on a per share basis, in 2003 over to this year.

The sale came after months of rumors. Buckee promised on Oct. 10 to clarify the stance of Canada's No. 2 oil explorer and producer on Sudan within a month.

Talisman owns 25 percent of the Greater Nile Petroleum Operating Co. The four-year-old investment, a crown jewel because of steadily growing output and high profits, has attracted widespread criticism from human rights activists, who say oil revenues are helping to fund the Sudanese government's 19-year civil war with southern rebels.

Talisman maintains its presence attracts international attention and helps promote economic development.

The firm posted a profit of C$151 million ($96 million), or C$1.06 per diluted share, in the three months ended Sept. 30. Earnings per basic share were C$1.08.

A year earlier, it earned C$121 million, or 85 Canadian cents a diluted share.

Cash flow, which offers insight into a firm's ability to fund projects, rose to C$657 million, or C$4.80 a share, up from year-ago C$587 million, or C$4.28 per share.

Oil and gas liquids production increased 4 percent to average 267,400 barrels a day this year. Gas volumes also grew 4 percent, averaging just over 1 million cubic feet per day.

The firm's quarterly oil price advanced to C$39.64 per barrel, down from C$35.35 a year ago. Gas prices dropped to C$3.32 per thousand cubic feet from C$3.66 in 2001.

Shares of Talisman rose C$1.33 to C$56.17 on Wednesday in Toronto. The stock has fallen 18 percent since the start of the third quarter.

($1=$1.57 Canadian)


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