Talisman Energy, an independent oil and gas company based in Canada, recorded after-tax impairments during the fourth quarter 2014 of approximately $1.37 billion, primarily as a result of declining oil prices.
In the fourth quarter 2014, Talisman reported a net loss of $1.54 billion, down from $1.01 billion in the corresponding quarter of 2013.
The company has said it partially impaired its investment in the Eagle Ford in the U.S. by $614 million due entirely to price declines, and fully impaired its investment in Block K44 in the Kurdistan region of Iraq by $234 million after determining that future investment in a capital constrained environment was unlikely.
In addition, the company fully wrote off its North Sea goodwill balance of $287 million, and partially wrote down its investment in Equion field in Colombia by $133 million. Talisman has said that price related impairments were partially offset by the booking of a mark-to-market gain on the company’s hedge positions of $1.2 billion in the quarter.
Talisman, which in December 2014 signed an agreement to be acquired by the Spanish oil company Repsol, has said that, subject to approval by two-thirds of shareholders at the special meeting, and other regulatory approvals, the takeover is expected to be completed in the second quarter of 2015.
Hal Kvisle, President and CEO of Talisman said: “During the quarter, we announced a transaction with Repsol S.A., which will deliver significant and immediate value return to shareholders and create a bigger, more diversified global energy company. Talisman’s assets and people will have an important place in the combined enterprise, as we will roughly double Repsol’s upstream business.”
“Repsol is dedicated to maintaining a strong commitment to Canada and the local and regional economies in which Talisman operates globally. The transaction remains on track to close during the second quarter of this year.”