Independent energy firm Talisman Energy Inc. – through its U.K. arm – awarded a multi-year contract, worth £300 million, to French multinational company Sodexo.
The five-year agreement – involving food and facilities management services – covers 11 offshore installations in North Sea along with the Flotta terminal, Orkney and the Gyda installation off the coast of Norway. The company’s offices in Aberdeen are also part of the deal.
A service solutions company – Sodexo has business ties with Talisman over the past eight years. Sodexo stated that this new contract – won through a competitive bidding process – will generate about 300 jobs.
Calgary, Alberta-based Talisman exhibits a solid base business in Western Canada and in the U.K. North Sea, as well as, has exposure to some of the most prolific natural gas plays in North America and high-impact exploration prospects worldwide.
In the U.K., Talisman operates in two core regions: the Northern Business Area and the Central Business Area. The company’s 2012 capital spending for U.K.-based projects is expected to be approximately $800 million, with the primary targets being the Monarb and Auk Area redevelopments.
In late July, Talisman entered into a deal with China Petroleum and Chemical Corporation (SNP - Free Report) , aka Sinopec for the sale of its 49% stake in the North Sea assets for about $1.5 billion. The sale proceeds will raise Talisman’s divestment proceeds to around $2.5 billion, to be partly utilized for repurchasing shares.
Over the last few years, Talisman has been disposing its non-core oil and gas properties around the world, thereby freeing up capital to concentrate on longer-term oil and gas prospects in prolific regions across the globe such as Canada, the U.S. and Southeast Asian belt.
Talisman holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Moreover, considering the fundamentals on the long run, we maintain our Neutral recommendation on the stock.