Talisman scraps Yme project with final settlement of $470MM

Source:Talisman Energy

Talisman Energy Norge AS (Talisman) (TSX:TLM) (NYSE:TLM), on behalf of its joint venture partners, has reached an agreement with SBM Offshore to terminate the Yme Mobile Offshore Production Unit (MOPU) project, including scrapping the existing above-surface structure, and ending all joint activity for an agreed cost.

"This is a good settlement for Talisman, the Yme partners and Norway," said Paul Warwick, Executive Vice-President, Europe-Atlantic. "This arrangement should allow the partners to move forward to examine options for the Yme field, without incurring significant additional costs related to the existing topsides. Recent analysis has concluded that a new topsides solution is needed in order to develop the Yme field. Our first priority will be to remove the existing platform, safely and expeditiously."

Following an extended period of operational and execution delays, the decision has been taken to have Talisman remove the MOPU, which will subsequently be scrapped by SBM Offshore, the unit's owner. Ownership of the in situ subsea structure will be transferred from SBM Offshore to the Yme license holders, as they assess alternative development concepts for the field.

Subject to an upfront settlement payment of US$470 million made by SBM Offshore, Talisman will complete the work necessary to ensure safe re-manning and will then remove the MOPU from the Yme field. SBM Offshore will manage the transportation and ultimate scrapping of the facility.

All parties will terminate the existing agreements and arbitration procedures with respect to the Yme project.

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