TALISMAN Energy looks set to be sold to Spanish state-owned giant Repsol in a $US13 billion deal which should provide relief for shareholders rattled by the company’s steadily declining value.

Talisman’s share price rose 48 per cent on 16 December to close at C$8.84 in response to the takeover bid, having steadily declined from a high of about C$24 in early-2011 to around the four dollar mark in early-December.

Talisman chief executive Hal Kvisle hailed the sale as a “terrific outcome… in a very difficult period for our industry”.

The sale price is comprised of a US$8.3 billion purchase price and the shouldering of US$4.7 billion of Talisman’s debt.

Repsol has been investigating acquisition targets, with a focus on North America, since it secured US$5 billion compensation from the Argentine government, following its seizure of YPF from Repsol in 2012.

The deal will expand Repsol’s reach to North America, Southeast Asia, Britain, Norway and Colombia – a presence in more than 50 countries, employing over 27,000 people.

Repsol’s upstream business will double, its output will be boosted by more than three quarters to 680,000 barrels of oil equivalent (boe) per day, and its reserves would increase by 55% to 2,353 boe.

The company would “bring forward and surpass” exploration goals outlined in its 2012-16 strategic plan as a result of the deal, with upstream business to be the company’s main growth driver as capital spending increases from 35% of the total to 56%.

Half of the company’s exploration capital would be committed to North America, and 22% to Latin America.

Repsol chairman Antonio Brufau said Talisman’s operational knowhow in unconventional and offshore operations, and ability to assist with future development, was a significant contributing factor.

“Talisman…will add its experience and proven track record in production assets that will add to that of Repsol in deep water exploration. This will significantly boost joint development,” Mr Brufau said.

Repsol chief executive Josu Jon Imaz said the deal was the result of an “exhaustive” analysis of over 100 companies and assets worldwide.

“In every area, Talisman has always been the best option, because of the excellent quality of its complementary global assets…there is much value to be realised – it is a win-win situation” Mr Imaz said.

It said the combined management of assets would “represent synergies of more than US$200 million a year…from the optimisation of corporate functions management of businesses and exploration, an increased commercialisation capacity in North America and the application of technology and best operating practices”.