2010-05-19-2010-05-19-2010-05-19

Acquired 37,000 acres in TX Eagle Ford shale, gaining 2,000 BOE/d.

Talisman Energy Inc., Calgary, (Toronto: TLM; NYSE: TLM) has purchased Eagle Ford shale assets from Roger Jarvis' previously held Common Resources LLC, Houston, for approximately $359 million, completing the divestiture of the private-equity-backed company.

The contiguous acreage position comprises 37,000 net acres in the South Texas Eagle Ford shale play in McMullen and LaSalle counties. Current production is approximately 2,000 barrels of oil equivalent per day. Talisman has identified some 400 drilling leads on the properties and expects to begin a single-rig drilling program in June.

Talisman president and chief executive John Manzoni says, "We have made an entry into the South Texas Eagle Ford shale play with agreements to purchase 37,000 net acres in the liquids-rich transition window of the play. These are top tier properties, which are de-risked and ready for commercial production."

Paul Blakeley, executive vice president of international operations, adds, "(The acreage) is in the very heart of the play, with some of the thickest parts, up to 350 feet, of Eagle Ford shale in place."

Common Resources was formed in 2007 with a $500-million line-of-equity commitment from New York-based private-equity firm Pine Brook Road Partners ($125 million) and Houston-based private-equity firm EnCap Investments LP ($375 million), to focus on unconventional resources.

Exco Resources Inc., Dallas, (NYSE: XCO) and Haynesville-shale joint-venture partner BG Group Plc (London: BG) closed the acquisition of Commonfor approximately $441.6 million in May 2010.

The total value paid for Common in the two deals was $805 million.

Common's management team consisted of Jarvis, chairman and chief executive, Elliot Pew, president and chief operating officer, and Robert Snell, chief financial officer.

Jarvis founded Gulf of Mexico-focused E&P company Spinnaker Exploration Co. with private-equity backing from Warburg Pincus. In 2005, Norsk Hydro, now Statoil, bought Spinnaker for $2.6 billion.

Roger Jarvis says, "We are pleased that Common was able to identify, capture and validate meaningful positions in the core of two of the most attractive shale gas plays in North America."

EnCap Investments, Pine Brook Road Partners and Soros Fund Management LLC co-led the funding for Common. Led by George Soros, Soros Fund Management is principal investment advisor to the Quantum Group of Funds.

EnCap managing partner Robert Zorich says, "The company's growth, success and ability to generate exceptional returns for its investors reflect the talent, vision and dedication of the management team led by Roger Jarvis and Elliot Pew."

Pine Brook Road Partners president and chief executive Howard Newman adds, "Not only am I pleased to provide an exceptional return to our limited partners, I particularly look forward to joining again with EnCap to back Roger and his team in forming Common Resources II."

When Common's buyout was announced, analysts at Tudor, Pickering, Holt & Co. Securities projected that Common's Eagle Ford acreage would fetch $400 million, or $10,000 per acre, when sold in a separate transaction.

Talisman has oil and gas operations in North America, the North Sea, southeastern Asia and North Africa.