Mitsubishi To Join Talisman’s Papua New Guinea Operations

To farm in an average 20% interest in 9 licenses in Papua New Guinea's onshore Western province.

Mitsubishi Corp., Tokyo, (Tokyo: 8058) plans to enter nine of licenses in Papua New Guinea's onshore Western province via a farmout with Talisman Energy Inc., Calgary, (Toronto, NYSE: TLM) for US$280 million in capital carry.

Pro forma, Talisman and Mitsubishi’s licensed equity positions will average 40% and 20%, respectively, in these nine licenses.

Talisman and MC have agreed to work together closely to aggregate gas in the Western Province with a view to potential LNG export of approximately 3 million metric tonnes per year.

Talisman executive vice president, international operations east, Paul Blakeley says, “MC brings extensive experience in LNG development and marketing and I am confident they will be a key success factor in helping us unlock the value of our Papua New Guinea assets.”

Talisman entered the onshore licenses of the Papuan Foreland in 2009 and now has a portfolio comprising interests in nine petroleum prospecting licenses (PPLs) and five petroleum retention licences (PRLs), covering 13.7 million acres. Talisman has participated in the acquisition of more than 1,550 kilometers of 2-D seismic and the drilling of eight wells in the PNG Foreland Basin to date. Talisman has participated in a new gas discovery at Ubuntu in PRL 28 and the successful appraisal of the Stanley and Elevala gas discoveries in PRL 4 and PRL 21, respectively. Talisman intends to commence a four-well drilling program on PPLs 235 and 261 during 2012, as well as ongoing appraisal in PRL 21.

MC has held interests in LNG operations since 1969 and currently participates in nine major LNG projects. Most recently, MC has commenced construction of the Donggi-Senoro LNG project in Indonesia in its capacity as project lead in planning and operation. MC also has an extensive downstream marketing and LNG tanker business.