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Filed pursuant to
General Instruction
II.K. of Form F-9;
File No. 333-150058
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Prospectus Supplement
May 27, 2009
(To Prospectus dated April 9, 2008)
US$700,000,000
7.750% Notes due 2019
The notes will bear interest at the rate of 7.750% per year. We will pay interest on the notes semi-annually in arrears on June 1 and
December 1 of each year, beginning December 1, 2009. The notes will mature on June 1, 2019 . We may redeem some or all of the notes at any time, at 100% of their principal amount
plus a make-whole premium as described in this prospectus supplement. We may also redeem all (and not less than all) of the notes if certain changes affecting Canadian withholding
taxes occur. The notes do not have the benefit of any sinking fund.
The
notes will be our unsecured obligations and rank equally with all of our existing and future unsecured and unsubordinated indebtedness.
Investing in the notes involves risks that are described in the "Risk Factors" section beginning on page 22 of the accompanying
prospectus.
We are permitted, under a multi-jurisdictional disclosure system adopted by the United States and Canada, to prepare this prospectus supplement and the
accompanying prospectus in accordance with Canadian disclosure requirements which are different from those of the United States. We prepare our financial statements in accordance with Canadian
generally accepted accounting principles and are subject to Canadian auditing and auditor independence standards. As a result, they may not be comparable to financial statements of
United States companies in certain respects. Information regarding the impact upon our financial statements of significant differences between Canadian and U.S. generally accepted
accounting principles is contained in the notes to the annual consolidated financial statements incorporated by reference in the accompanying prospectus.
Owning the notes may subject you to tax consequences both in the United States and in Canada. This prospectus supplement and the accompanying prospectus may
not describe these tax consequences fully. You should read the tax discussion in this prospectus supplement.
Your ability to enforce civil liabilities under the U.S. federal securities laws may be affected adversely because we are incorporated in Canada, some or
all of our officers and directors and some or all of the experts named in this prospectus supplement and the accompanying prospectus are residents of Canada, and a substantial portion of our assets
and all or a substantial portion of the assets of such persons are located outside of the United States.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offence.
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Per Note
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Total
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Public offering price
(1)
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99.596%
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US$
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697,172,000
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Underwriting commission
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0.650%
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US$
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4,550,000
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Proceeds, before expenses, to Talisman
(1)
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98.946%
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US$
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692,622,000
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-
(1)
-
Plus
accrued interest from June 1, 2009 if settlement occurs after that date.
The underwriters expect to deliver the notes in book-entry form only through the facilities of The Depository Trust Company and its direct and indirect
participants, including Euroclear Bank S.A./N.V. and Clearstream Banking S.A., against payment in New York, New York on or about June 1, 2009.
Joint
Book-Running Managers
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Banc of America Securities LLC
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BNP PARIBAS
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Citi
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RBC Capital Markets
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Co-Managers
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Canadian Imperial Bank of Commerce
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Daiwa Securities America Inc.
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Desjardins Securities International Inc.
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Mizuho Securities USA Inc.
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IMPORTANT NOTICE ABOUT INFORMATION IN
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
This document is in two parts. The first part, this prospectus supplement, describes the specific terms of the notes we are offering
and also adds and updates certain information contained in the accompanying prospectus and documents incorporated by reference. The second part, the base prospectus, dated April 9, 2008, gives
more general information, some of which may not apply to the notes we are offering. The accompanying base prospectus is referred to as the "prospectus" in this prospectus supplement.
If the description of the notes varies between this prospectus supplement and the prospectus, you should rely on the information in this prospectus
supplement.
You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the prospectus. We have not, and the
underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not,
and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus
supplement and the prospectus, as well as information we previously filed with the U.S. Securities and Exchange Commission and with the Alberta Securities Commission and incorporated by
reference, is accurate as of the date of such information only. Our business, financial condition, results of operations and prospects may have changed since
those dates.
In
this prospectus supplement, all capitalized terms used and not otherwise defined herein have the meanings provided in the prospectus. In the prospectus and this prospectus supplement,
unless
otherwise specified or the context otherwise requires, all dollar amounts are expressed in Canadian dollars, and all financial information included and incorporated by reference in the prospectus and
this prospectus supplement is determined using Canadian generally accepted accounting principles ("Canadian GAAP"). "U.S. GAAP" means generally accepted accounting principles in the
United States. For a discussion of the principal differences between our financial results as calculated under Canadian GAAP and under U.S. GAAP, you should refer to note 24 of
our audited consolidated financial statements for the year ended December 31, 2008, incorporated by reference in the prospectus.
Unless
otherwise specified or the context otherwise requires, all references in this prospectus supplement and the prospectus to "we", "us", "our" or "Talisman" refer to Talisman
Energy Inc. and its subsidiaries on a consolidated basis. In the sections entitled "Summary of the Offering" and "Description of the Notes" in this prospectus supplement and "Description of
Debt Securities" in the prospectus, "we", "us", "our" or "Talisman" refer to only Talisman Energy Inc., without any of its subsidiaries.
This
prospectus supplement is deemed to be incorporated by reference into the prospectus solely for the purposes of the offering of the notes offered hereby. Other documents are also
incorporated or deemed to be incorporated by reference into the prospectus. See "Documents Incorporated by Reference" in this prospectus supplement and "Where You Can Find More Information" in
the prospectus.
S-2
TABLE OF CONTENTS
Prospectus Supplement
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Page
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Forward-Looking Information
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S-4
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Exchange Rate Information
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S-5
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Summary of the Offering
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S-6
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Talisman Energy Inc.
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S-9
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Use of Proceeds
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S-9
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Selected Financial Information
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S-10
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Consolidated Capitalization
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S-11
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Pro-Forma Interest Coverage
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S-11
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Description of the Notes
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S-12
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Credit Ratings
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S-16
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Certain Income Tax Considerations
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S-17
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Underwriting
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S-19
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Legal Matters
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S-22
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Documents Incorporated by Reference
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S-23
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Prospectus
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About This Prospectus
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2
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Where You Can Find More Information
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3
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Special Note Regarding Forward-Looking Information
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5
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Talisman Energy Inc.
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7
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Use of Proceeds
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7
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Description of Debt Securities
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7
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Risk Factors
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22
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Certain Income Tax Consequences
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23
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Plan of Distribution
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23
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Interest Coverage
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24
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Price Range and Trading Volume of the Common Shares
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25
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Legal Matters
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25
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Experts
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26
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Documents Filed as Part of the Registration Statement
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26
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Auditors' Consent
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27
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S-3
FORWARD-LOOKING INFORMATION
This document contains or incorporates statements that constitute "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995. Any statements that express or involve discussions with respect to predictions, business strategy, budgets, exploration and
development opportunities or projects, acquisitions and dispositions, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, using words or
phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "projects", "believes", "forecasts", "estimates", "intends", "possible", "probable",
"scheduled", "likely" or "positioned", or stating that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved) are not statements of
historical fact and may be "forward-looking statements". Such statements are included, among other places, in the prospectus under the heading "Risk Factors", in our Annual Information Form dated
March 9, 2009 under the headings "General Development of the Business", "Description of the Business", "Corporate Responsibility and Environmental Protection", "Legal Proceedings" and "Risk
Factors", in the Management's Discussion and Analysis for the year ended December 31, 2008 under the headings "Outlook for 2009" and "Risk Factors" and in the Management's Discussion and
Analysis for the three months ended March 31, 2009. Information regarding business plans, drilling and exploration is based on our 2009 capital program as announced on January 13, 2009.
The material assumptions supporting the 2009 capital program are: (1) 2009 annual production of approximately 430,000 boe/d; (2) a US$40/bbl WTI oil price for 2009; and
(3) a US$5/mmbtu NYMEX natural gas price for 2009. 2009 production estimates are subject to the timing of development activities and include the anticipated completion of planned dispositions.
The completion of any contemplated disposition is contingent on various factors, including market conditions, our ability to negotiate acceptable terms for sale and receipt of any required approvals
for such dispositions. Statements concerning oil and gas reserves contained in the Annual Information Form and in the Management's Discussion and Analysis may be deemed to be forward-looking
statements as they involve the implied assessment, based on certain estimates and assumptions, that the resources described can be profitably produced in the future.
You
are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are based on current expectations, estimates and projections at the time the
statements are made that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by us. These risks and uncertainties include, but are
not limited to:
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the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and
natural gas and market demand, including unpredictable facilities outages;
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risks and uncertainties involving geology of oil and gas deposits;
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the uncertainty of reserves estimates, reserves life and underlying reservoir risk;
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the uncertainty of estimates and projections relating to production, costs and expenses;
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the impact of the economy and credit crisis on the ability of the counterparties to our commodity price derivative
contracts to meet their obligations under the contracts;
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fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;
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potential delays or changes in plans with respect to exploration or development projects or capital expenditures;
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the outcome and effects of any future acquisitions and dispositions;
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health, safety and environmental
risks;
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uncertainties as to the availability and cost of financing and changes in the capital markets;
S-4
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uncertainties related to the litigation process, such as discovery of new evidence or acceptance of novel legal theories
and the difficulties in predicting the decisions of judges and juries;
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risks in conducting foreign operations (for example, political and fiscal instability or the
possibility of civil
unrest or military action);
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changes in general economic and business conditions;
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the possibility that
government policies or laws may change or governmental approvals may be delayed or withheld;
and
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results of our risk mitigation strategies, including insurance and hedging activities.
We
caution that the foregoing list of risks is not exhaustive. Events or circumstances could cause our actual results to differ materially from those estimated or projected and expressed
in, or implied by, these forward-looking statements. Additional information concerning certain of these and other factors which could affect our operations or financial results are included under the
heading "Risk Factors" in the prospectus, including information incorporated by reference thereunder, in our Management's Discussion and Analysis incorporated by reference in the prospectus, under the
heading "Risk Factors" in our Annual Information Form as well as in our other reports on file with Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission.
Forward-looking
statements are based on estimates and opinions of our management at the time the statements are made. We undertake no obligation to update forward-looking statements
should circumstances or management's estimates or opinions change, except as required by law.
EXCHANGE RATE INFORMATION
We publish our consolidated financial statements in Canadian dollars. In this prospectus supplement, unless otherwise specified or the
context otherwise requires, all dollar amounts are expressed in Canadian dollars and references to "dollars" or "$" are to Canadian dollars and references to "US$" are to
United States dollars.
The
following table sets forth the Canada/U.S. exchange rates on the last day of the periods indicated as well as the high, low and average rates for such periods. The high, low
and average exchange rates for each period were identified or calculated from spot rates in effect on each trading day during the relevant period. The exchange rates shown are expressed as the number
of U.S. dollars required to purchase one Canadian dollar. These exchange rates are based on those published on the Bank of Canada's website as being in effect at approximately noon on each
trading day (the "Bank of Canada noon rate"). On May 27, 2009, the Bank of Canada noon rate was US$0.8993 equals $1.00.
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Year Ended December 31,
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Three Months
Ended March 31,
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2008
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2007
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2006
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2009
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2008
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Period End
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0.8166
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1.0120
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0.8581
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0.7935
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0.9729
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High
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1.0289
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1.0905
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0.9099
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0.8458
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1.0289
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Low
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0.7711
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0.8437
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0.8528
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0.7692
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0.9686
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Average
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0.9381
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0.9348
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0.8820
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0.8028
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0.9958
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S-5
SUMMARY OF THE OFFERING
The following is a brief summary of some of the terms of this offering. For a more complete description of the
terms of the notes, see "Description of the Notes" in this prospectus supplement and "Description of Debt Securities" in the prospectus. In this summary, "we", "us", "our" or "Talisman" refer
to Talisman Energy Inc. without any of its subsidiaries through which it operates.
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Issuer
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Talisman Energy Inc.
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Securities Offered
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US$700 million aggregate principal amount of 7.750% notes.
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Interest Payment Dates
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June 1 and December 1 of each year, beginning, December 1, 2009.
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Maturity Date
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June 1, 2019.
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Ranking
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The notes will be our direct, unsecured and unsubordinated obligations and will rank equally with all of our existing and future unsecured and unsubordinated indebtedness. We conduct a substantial portion of our
business through corporate and partnership subsidiaries. The notes will be structurally subordinate to all existing and future indebtedness and liabilities of any of our corporate and partnership subsidiaries. See "Description of the
NotesRanking and Other Indebtedness" in this prospectus supplement and "Description of Debt SecuritiesRanking and Other Indebtedness" in the prospectus. As at March 31, 2009, our subsidiaries had approximately $1,863 million of
indebtedness and other liabilities to third parties, including accounts payable and accrued liabilities and income and other taxes payable.
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Optional Redemption
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We may redeem the notes, in whole or in part, at any time, at the "make-whole" price described in this prospectus supplement. See "Description of the NotesOptional Redemption" in this prospectus supplement. We may
also redeem the notes in whole, but not in part, at the redemption prices described in the accompanying prospectus at any time in the event certain changes affecting Canadian withholding taxes occur. See "Description of Debt SecuritiesTax
Redemption" in the prospectus.
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Sinking Fund
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None.
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Certain Covenants
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The indenture pursuant to which the notes will be issued contains certain covenants that, among other things, limit:
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our ability and the ability of our Restricted Subsidiaries (as defined in the indenture) to create liens; and
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our ability (but not the ability of our corporate and partnership subsidiaries) to merge, amalgamate or consolidate with, or sell all or substantially all of our assets to, any other person other than our Restricted Subsidiaries.
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These covenants are subject to important exceptions and qualifications that are described under the caption "Description of Debt SecuritiesCertain Covenants" in the prospectus.
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S-6
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Further Issuances
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We may, from time to time, without notice to or the consent of holders of the notes, create and issue additional notes ranking equally with the notes offered hereby in all respects (or in all respects except for
the payment of interest accruing prior to the issue date of the new notes or except for the first payment of interest following the issue date of the new notes). These additional notes may be consolidated and form a single series with the notes
offered hereby and have the same terms as to status, redemption or otherwise as the notes offered hereby.
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Use of Proceeds
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The net proceeds to us from this offering will be US$691.5 million, after deducting the underwriting commission and after deducting estimated expenses payable by us of approximately US$1.1 million. The net
proceeds received by us from the sale of the notes will be initially invested in short-term marketable securities and later used to fund operations and repay fixed-debt maturities. We may also use the funds to reduce borrowings under our credit
facilities. See "Use of Proceeds" in this prospectus supplement.
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Credit Ratings
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The notes have been assigned a rating of "Baa2" with a negative outlook by Moody's Investors Service, Inc., a rating of "BBB" by Standard & Poor's, a Division of The McGraw-Hill Companies, Inc. and a
rating of "BBB(high)" with a stable trend by DBRS Limited. The credit ratings assigned to the notes by the rating agencies are not recommendations to buy, sell or hold the notes and may be revised or withdrawn entirely at any time by the rating
agency issuing such rating. There can be no assurance that a rating will remain in effect for a given period of time or that a rating will not be revised or withdrawn entirely by the rating agency issuing such rating in the future.
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Additional Amounts
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Any payments made by us with respect to the notes will be made without withholding or deduction for Canadian taxes unless required to be withheld or deducted by law or by the interpretation or administration thereof. If
we are so required to withhold or deduct for Canadian taxes with respect to a payment to the holders of notes, we will pay the additional amounts necessary so that the net amount received by the holders of notes after such withholding or deduction is
not less than the amount that such holders would have received in the absence of the withholding or deduction. However, no additional amount will be payable in excess of the additional amounts that would be payable if the holder was a resident of the
United States for purposes of the Canada-U.S. Income Tax Convention (1980), as amended. See "Description of Debt SecuritiesCertain CovenantsAdditional Amounts" in the prospectus.
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S-7
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Form and Denomination
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The notes will be represented by one or more fully registered global notes deposited in book entry form with, or on behalf of, The Depository Trust Company, and registered in the name of its nominee,
Cede & Co. Beneficial interests in any registered global note will be in denominations of US$2,000 and integral multiples of US$1,000. See "Description of the NotesBook Entry System" in this prospectus supplement. Except as
described under "Description of the Notes" in this prospectus supplement and "Description of Debt Securities" in the prospectus, notes in certificated form will not be issued.
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Trustee
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The Bank of Nova Scotia Trust Company of New York.
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Governing Law
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The notes and the indenture governing the notes will be governed by the laws of the State of New York.
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S-8
TALISMAN ENERGY INC.
We are a diversified, global, upstream oil and gas company with operations in Canada and, through our subsidiaries, in the United
States, Southeast Asia, the North Sea, North Africa, Peru and Colombia. Our subsidiaries are also active in a number of other international areas.
We
continually investigate our portfolio of assets and other business opportunities in the oil and gas business and may make acquisitions, investments or dispositions, some of which may
be material. In connection with any acquisition or investment, we may incur debt or issue equity.
Our
common shares are listed for trading on the Toronto Stock Exchange and on the New York Stock Exchange under the trading symbol "TLM".
USE OF PROCEEDS
The net proceeds to us from this offering will be US$691.5 million, after deducting the underwriting commission and after
deducting estimated expenses of the offering of approximately US$1.1 million. The net proceeds received by us from the sale of the notes will be initially invested in short-term marketable
securities and later used to fund operations and repay fixed-debt maturities. We may also use the funds to reduce borrowings under our credit facilities.
S-9
SELECTED FINANCIAL INFORMATION
The following table sets forth selected financial information for the years ended December 31, 2008, 2007 and 2006 derived from
our comparative consolidated financial statements for the year ended December 31, 2008 which have been audited by Ernst & Young LLP and for the three months ended March 31,
2009 and 2008 derived from our unaudited interim consolidated financial statements. Our consolidated financial statements are prepared in accordance with Canadian GAAP, which differs in certain
respects from U.S. GAAP. For a discussion of the principal differences between our financial results as calculated under Canadian GAAP and under U.S. GAAP, you should refer to
note 24 of our consolidated financial statements for the year ended December 31, 2008, incorporated by reference into the prospectus. You should read this selected consolidated financial
information in conjunction with our audited annual consolidated financial statements and the related notes, our unaudited interim consolidated financial statements, and other information included in
the documents incorporated by reference in the prospectus. Our historical results are not necessarily indicative of the results that may be expected for any future period or for a full year.
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Years Ended December 31,
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Three Months Ended March 31,
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2008
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2007
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2006
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2009
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2008
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(millions of dollars)
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Income statement items:
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Net sales (net of hedging and royalties)
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9,660
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7,407
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7,121
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1,542
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1,975
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Net income (loss) from continuing operations
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3,336
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1,020
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1,296
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(84
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)
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412
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Net income from discontinued operations
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183
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1,058
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|
709
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539
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54
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Net income
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3,519
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2,078
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|
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2,005
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455
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466
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Cash flow statement items:
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Cash provided by continuing operations
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5,949
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3,727
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3,602
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|
1,072
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|
|
1,216
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Cash provided by discontinued operations
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|
|
205
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|
|
343
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|
|
772
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14
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|
|
96
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|
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Cash provided by operating activities
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6,154
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4,070
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4,374
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1,086
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1,312
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Cash used in investing activities
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|
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(4,974
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)
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(3,239
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)
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(3,770
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)
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|
(609
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)
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(1,021
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)
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Cash used in financing activities
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(1,721
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)
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(369
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)
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(680
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)
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|
(314
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)
|
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(619
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)
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Balance sheet items (at period end):
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|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
24,275
|
|
|
21,420
|
|
|
21,481
|
|
|
24,307
|
|
|
22,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
13,125
|
|
|
13,457
|
|
|
14,174
|
|
|
12,516
|
|
|
13,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
11,150
|
|
|
7,963
|
|
|
7,307
|
|
|
11,791
|
|
|
8,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We have entered into transactions to dispose of certain non-core oil and gas producing assets and accordingly, those assets and the results and
cash flows thereof have been classified as discontinued operations. Further information concerning these discontinued operations is included in our audited consolidated financial statements for the
year ended December 31, 2008. See "Documents Incorporated by Reference" in this prospectus supplement.
During
the first quarter of 2009, we classified certain non-core oil and gas producing assets in southeast Saskatchewan and certain midstream assets in Western Canada as discontinued
operations. Since the impact of these discontinued operations is not material, the financial results for the years ended December 31, 2008, 2007 and 2006 have not been restated. The net income
of these assets for the years ended December 31, 2008, 2007 and 2006 was $124 million, $71 million and $72 million respectively.
S-10
CONSOLIDATED CAPITALIZATION
The following table summarizes our consolidated capitalization at March 31, 2009, and as adjusted to give effect to the issuance
of the notes. You should read this table together with the unaudited interim consolidated financial statements for the three months ended March 31, 2009 incorporated by reference in the
prospectus. In the "As Adjusted" column, the U.S. dollar amount of the notes offered hereby has been converted to Canadian dollars using the Bank of Canada noon buying rate of US$0.7935 per
$1.00 at March 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
As at
March 31, 2009
|
|
|
|
Actual
|
|
As Adjusted
|
|
|
|
(millions of dollars)
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
3,717
|
|
|
3,717
|
|
|
Notes offered hereby
|
|
|
|
|
|
882
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
3,717
|
|
|
4,599
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
2,373
|
|
|
2,373
|
|
|
Contributed surplus
|
|
|
96
|
|
|
96
|
|
|
Retained earnings
|
|
|
9,421
|
|
|
9,421
|
|
|
Accumulated other comprehensive loss
|
|
|
(99
|
)
|
|
(99
|
)
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
11,791
|
|
|
11,791
|
|
|
|
|
|
|
|
Total capitalization
|
|
|
15,508
|
|
|
16,390
|
|
|
|
|
|
|
|
PRO-FORMA INTEREST COVERAGE
The interest coverage ratios set out below have been prepared and included in this prospectus supplement in accordance with Canadian
disclosure requirements and have been calculated based on information prepared in accordance with Canadian GAAP.
For
further information regarding interest coverage, reference is made to "Interest Coverage" in the accompanying prospectus.
The
following interest coverages are calculated on a consolidated basis for the twelve month periods ended December 31, 2008 and March 31, 2009. In calculating the ratios,
the interest expense has been adjusted to give effect to the issuance of the notes and the repayment of borrowings under our credit facilities subsequent to December 31, 2008. See "Use
of Proceeds".
|
|
|
|
|
|
|
|
|
|
|
December 31,
2008
|
|
March 31,
2009
|
|
Interest coverage (times)
|
|
|
|
|
|
|
|
|
Income
(1)
|
|
|
21.56
|
|
|
19.30
|
|
|
Income from continuing operations
(2)
|
|
|
20.29
|
|
|
15.82
|
|
-
(1)
-
Net
income plus income taxes and interest expense; divided by the sum of interest expense and capitalized interest.
-
(2)
-
Net
income from continuing operations plus income taxes and interest expense from continuing operations; divided by the sum of interest expense and
capitalized interest from continuing operations.
S-11
DESCRIPTION OF THE NOTES
The following description of the terms of the notes supplements the description set forth in the prospectus and
should be read in conjunction with "Description of Debt Securities" in the prospectus. In addition, such description is qualified in its entirety by reference to the Indenture under which the notes
are to be issued, referred to in the prospectus. Capitalized terms used but not defined in the prospectus supplement have the meanings ascribed to them in the prospectus. In this section only, "we",
"us", "our" or "Talisman" refer to Talisman Energy Inc. without any of its subsidiaries through which it operates.
General
Payment of the principal, premium, if any, and interest on the notes will be made in United States dollars.
The
notes initially will be issued in an aggregate principal amount of US$700 million and will mature on June 1, 2019. The notes will bear interest at the rate of 7.750%
per year. Interest will be payable on the notes from June 1, 2009 or from the most recent date to which interest has been paid or provided for, payable semi-annually in arrears on
June 1 and December 1 of each year, commencing December 1, 2009 to the persons in whose names the notes are registered at the close of business on the preceding May 15 or
November 15, respectively. The notes will be sold in denominations of US$2,000 and integral multiples of US$1,000.
We
may from time to time without notice to, or the consent of, the holders of the notes, create and issue additional notes under the Indenture. Unless otherwise set forth in a prospectus
supplement, such additional notes will rank equally and have the same terms as the notes offered hereby in all respects (or in all respects except for the payment of interest accruing prior to
the issue date of the new notes, or except, in some cases, for the first payment of interest following the issue date of the new notes) so that the additional notes may be consolidated and
form a single series with these notes, and have the same terms as to status, redemption and otherwise as these notes. In the event that additional notes are issued, we will prepare a new
prospectus supplement.
The
notes will not be entitled to the benefit of any sinking fund. We may issue debt securities and incur additional indebtedness other than through the offering of notes pursuant to
this prospectus supplement.
The
provisions of the Indenture relating to the payment of Additional Amounts in respect of Canadian withholding taxes in certain circumstances (described under the caption "Description
of Debt SecuritiesCertain CovenantsAdditional Amounts" in the prospectus) and the provisions of the Indenture relating to the redemption of notes in the event of specified
changes in Canadian withholding tax law on or after the date of this prospectus supplement (described under the caption "Description of Debt SecuritiesTax Redemption" in the prospectus)
will apply to the notes. These provisions state that any payments made by us with respect to the notes will be made without withholding or deduction for Canadian taxes unless required to be withheld
or deducted by law or by the interpretation or administration thereof. If we are so required to withhold or deduct for Canadian taxes with respect to a payment to the holders of notes, we will pay the
additional amount necessary so that the net amount received by the holders of notes after such withholding or deduction is not less than the amount that such holders would have received in the absence
of the withholding or deduction. However, no additional amount will be payable in excess of the additional amount that would be payable if the holder was a resident of the United States for
purposes of the Canada-U.S. Income Tax Convention (1980), as amended. See "Description of Debt SecuritiesCertain CovenantsAdditional Amounts" in
the prospectus.
S-12
Ranking and Other Indebtedness
The notes will be our direct, unsecured and unsubordinated obligations and will rank equally with all of our existing and future
unsecured and unsubordinated indebtedness. The notes will be effectively subordinated to all of our secured debt to the extent of the assets securing such debt and will be structurally subordinate to
all existing and future indebtedness and liabilities of
any of our corporate and partnership subsidiaries, including trade payables and other indebtedness. We conduct a substantial portion of our operations through our corporate and partnership
subsidiaries. As at March 31, 2009 our subsidiaries had approximately $1,863 million of indebtedness and other liabilities to third parties, including accounts payable and income and
other taxes payable.
Certain Covenants
The accompanying prospectus describes certain covenants restricting Talisman and its Restricted Subsidiaries. As at March 31,
2009, Talisman's Restricted Subsidiaries were Talisman Energy Canada and Talisman North Sea Limited.
Optional Redemption
The notes will be redeemable, in whole or in part, at our option at any time at a redemption price equal to the
greater of:
-
-
100% of the principal amount of the notes to be redeemed, and
-
-
as determined by the Quotation Agent (as defined below),
the sum of the present values of the remaining scheduled
payments of principal and interest on the notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate (as defined below) plus 50 basis points.
in
either case, plus accrued interest thereon to the date of redemption.
"
Adjusted Treasury Rate
" means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"
Comparable Treasury Issue
" means the U.S. Treasury security or securities selected by the Independent Investment Banker as having
an actual or interpolated maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes.
"
Comparable Treasury Price
" means, with respect to any redemption date, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if fewer than four such Reference Treasury Dealer Quotations are obtained, the
average of all such quotations.
"
Independent Investment Banker
" means one of the Reference Treasury Dealers, which is appointed by the Trustee after consultation
with us.
"
Quotation Agent
" means one of the Reference Treasury Dealers, which is appointed by us.
"
Reference Treasury Dealers
" means Banc of America Securities LLC, BNP Paribas Securities Corp., Citigroup Global
Markets Inc., RBC Capital Markets Corporation or their respective affiliates, plus one other which is a primary U.S. Government securities dealer (each a "Primary Treasury Dealer") and
their respective successors; provided, however, that if any of the foregoing or their
S-13
affiliates
shall cease to be a Primary Treasury Dealer in the United States, we shall substitute for it another Primary Treasury Dealer.
"
Reference Treasury Dealer Quotations
" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Reference Treasury Dealer, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted by such Reference
Treasury Dealers at 3:30 p.m., New York Time, on the third business day preceding such redemption date.
Notice
of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of the notes to be redeemed. Unless we default
in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the notes or the portions of the notes called for redemption. In the case of a partial redemption
of notes, selection of such notes for redemption will be made pro rata, by lot or such other method as the Trustee in its sole discretion deems appropriate and just.
Book-Entry System
The Depository Trust Company ("DTC" or the "Depository"), New York, NY, will act as securities depository for the notes. The
notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized
representative of DTC. One or more fully-registered global notes (hereinafter referred to as the "Global Notes") will be issued for the notes, in the aggregate principal amount of such issue, and will
be deposited with DTC. The provisions set forth under "Description of Debt SecuritiesDebt Securities in Global Form" in the prospectus will be applicable to the notes.
DTC
is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market
instruments that DTC's direct participants deposit with DTC. DTC also facilitates the post-trade settlement among direct participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry transfers and pledges between direct participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC
is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and
non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either
directly or indirectly ("indirect participants"). The DTC Rules applicable to its participants are on file with the Securities and Exchange Commission.
Purchases
of notes under the DTC system must be made by or through direct participants, which will receive a credit for the notes on DTC's records. The ownership interest of each actual
purchaser of each note ("beneficial owner") is in turn to be recorded on the direct and indirect participants' records. Beneficial owners will not receive written confirmation from DTC of their
purchase. Beneficial owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect
participant through which the beneficial owner entered into the transaction. Transfers of ownership interests in the Global Notes are
S-14
to
be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership
interests in the Global Notes, except in the event that use of the book-entry system for the notes is discontinued.
To
facilitate subsequent transfers, all securities deposited by direct participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such
other name as may be requested by an authorized representative of DTC. The deposit of the Global Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee
do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the Global Notes; DTC's records reflect only the identity of the direct participants to whose
accounts such securities are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of
their customers.
Conveyance
of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial owners of notes may wish to take certain steps
to ensure timely transmission to them of notices of significant events with respect to the notes, such as redemptions, tenders, defaults, and proposed amendments to the documents under which the notes
are issued. For example, a beneficial owner of the notes may wish to ascertain that the direct or indirect participant holding the notes for its benefit has agreed to obtain and transmit notices to
beneficial owners.
None
of DTC, Cede & Co., or any other DTC nominee will consent or vote with respect to the Global Notes unless authorized by a direct participant in accordance with DTC's
procedures. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those direct participants to whose accounts the securities are credited on the record date. These participants are identified in a listing attached to the omnibus proxy.
Redemption
proceeds, distributions, and dividend payments on the Global Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized
representative of DTC. DTC's practice is to credit direct participants' accounts upon DTC's receipt of funds and corresponding
detail information from us, on the applicable payment date in accordance with their respective holdings shown on DTC's records. Payments by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with notes held for the accounts of customers in bearer form or registered in street name. These payments will be the responsibility of
these participants and not of DTC or its nominee, us, the trustee, or any other agent or party, subject to any statutory or regulatory requirements that may be in effect from time to time. Payment of
dividends or principal and any premium or interest to Cede & Co., or any other nominee as may be requested by an authorized representative of DTC, is our responsibility. Disbursement of
the payments to direct participants is the responsibility of DTC, and disbursement of the payments to the beneficial owners is the responsibility of the direct or indirect participants.
We
will send any redemption notices to DTC. If less than all of the notes of a series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each direct
participant in the issue to be redeemed.
A
beneficial owner must give any required notice of its election to have its notes repurchased through the participant through which it holds its beneficial interest in the Global Notes
to the applicable trustee or tender agent. The beneficial owner shall effect delivery of its notes by causing the direct participant to transfer its interest in the securities on DTC's records. The
requirement for physical delivery of notes in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the securities are transferred by the
direct participant on
S-15
DTC's
records and followed by a book-entry credit of tendered notes to the applicable trustee or agent's DTC account.
The
information in this section concerning DTC and DTC's book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for
its accuracy.
Certificated Notes
The Depository may discontinue providing its services as depository with respect to the notes at any time by giving reasonable notice
to us and the Trustee. Under these circumstances, and in the event that a successor depository is not appointed, notes in certificated form are required to be printed and delivered. In addition, we
may decide to discontinue use of the system of book-entry transfers through the Depository (or a successor depository). In that event, notes in certificated form will be printed and
delivered. If at any time the Depository ceases to be a clearing agency registered under the Exchange Act and a successor depository is not appointed by us within 60 days or if there shall have
occurred and be continuing an Event of Default under the
Indenture with respect to the notes and the Trustee has received a request from a beneficial holder of outstanding notes to issue notes in certificated form to such holder, we will issue individual
notes in certificated form in exchange for the Global Notes.
CREDIT RATINGS
The notes have been assigned a rating of "Baa2" with a negative outlook by Moody's Investors Service, Inc. ("Moody's"), a rating
of "BBB" by Standard & Poor's, a Division of The McGraw-Hill Companies, Inc. ("S&P") and a rating of "BBB(high)" with a stable trend by DBRS Limited ("DBRS"). Credit ratings
are intended to provide investors with an independent measure of credit quality of any issue of securities and are indicators of the likelihood of payment and of the capacity of a company to meet its
financial commitment on the rated obligation in accordance with the terms of the rated obligation. The credit ratings assigned to the notes by the rating agencies are not recommendations to buy, sell
or hold the notes and may be revised or withdrawn entirely at any time by a rating agency. Credit ratings may not reflect the potential impact of all risks on the value of the notes. In addition, real
or anticipated changes in the rating assigned to the notes will generally affect the market value of the notes. There can be no assurance that a rating will remain in effect for a given period of time
or that a rating will not be revised or withdrawn entirely by a rating agency in the future.
Moody's
credit ratings are on a long term debt rating scale that ranges from Aaa to C, representing the range from least credit risk to greatest credit risk of such
securities rated. Moody's applies numerical modifiers 1, 2 and 3 in each generic rating classification from Aa through Caa in its long term debt rating system. The modifier
1 indicates that the issue ranks in the higher end of its generic rating category, the modifier 2 indicates a mid range ranking and the modifier 3 indicates that the issue ranks
in the lower end of that generic rating category. According to the Moody's rating system, debt securities rated within the Baa category are subject to moderate credit risk. They are considered medium
grade and as such, may possess certain speculative characteristics.
S&P's
credit ratings are on a long term debt rating scale that ranges from AAA to D, representing the range from highest to lowest quality of such securities rated. The
ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. According
to S&P's rating system, debt securities rated BBB exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitments on the obligations.
S-16
DBRS'
credit ratings are on a long term debt rating scale that ranges from AAA to D, representing the range from highest to lowest quality of such securities rated. Each
rating category between AA and B is denoted by subcategories "high" and "low" to indicate the relative standing of a credit within a particular rating category. The absence of either a
"high" or "low" designation indicates that the rating is in the "middle" of the category. According to DBRS' rating system, long term debt securities rated BBB are of adequate credit quality.
Protection of interest and principal is considered acceptable, but entities so rated are fairly susceptible to adverse changes in financial and economic conditions, or there may be other adverse
conditions present which reduce the strength of the entity and its rated securities.
CERTAIN INCOME TAX CONSIDERATIONS
United States
The following summary describes certain U.S. federal income tax consequences that may be relevant to the purchase, ownership and
disposition of notes by United States persons (as defined below) who purchase notes in this offering at the issue price set forth on the cover of this Prospectus Supplement and who hold
the notes as capital assets ("U.S. Holders") within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This summary does not purport to
deal with all aspects of U.S. federal income taxation that may be relevant to particular holders in light of their particular circumstances nor does it deal with persons that are subject to
special tax rules, such as dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings,
financial institutions, insurance companies, tax-exempt organizations, persons holding the notes as a part of a straddle, hedge, or conversion transaction or a synthetic security or other
integrated transaction, U.S. expatriates, U.S. Holders whose "functional currency" is not the U.S. dollar, and holders who are not U.S. Holders. In addition, this summary
does not address the tax consequences applicable to subsequent purchasers of the notes, and does not address any aspect of gift, estate or inheritance, or state, local or foreign tax law. Furthermore,
the summary below is based upon the provisions of the Code and U.S. Treasury regulations, rulings and judicial decisions under the Code as of the date of this Prospectus Supplement, and those
authorities may be repealed, revoked or modified (possibly with retroactive effect) so as to result in U.S. federal income tax consequences different from those discussed below. There can be no
assurance that the Internal Revenue Service ("IRS") will take a similar view as to any of the tax consequences described in this summary.
Persons
considering the purchase, ownership or disposition of notes should consult their own tax advisors concerning the U.S. federal income tax consequences in light of their
particular situations as well as any consequences arising under the laws of any state or of any local or foreign taxing jurisdiction.
As
used in this section, the term "United States person" means a beneficial owner of a note that is (i) a citizen or individual resident of the United States,
(ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any political
subdivision of the United States, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust (A) if a
court within the United States is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all
substantial decisions of the trust, or (B) that was in existence on August 20, 1996, was treated as a United States person under the Code on the previous day, and validly elected
to continue to be so treated under applicable U.S. Treasury regulations.
If
a partnership (or an entity taxable as a partnership for U.S. federal income tax purposes) holds a note, the U.S. federal income tax treatment of a partner
generally will depend on the status of the
S-17
partner
and the activities of the partnership. A partner of a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holding a note should consult its
own tax advisors.
Interest on a note will generally be includible by a U.S. Holder as ordinary income at the time the interest is paid or accrued,
depending on the U.S. Holder's method of accounting for U.S. federal income tax purposes. For U.S. foreign tax credit purposes, interest income on a note generally will constitute
foreign source income and will be considered either "passive category income" or "general category income" for such purposes. The rules governing the foreign tax credit are complex and investors are
urged to consult their tax advisors regarding the availability of the credit under their particular circumstances.
Sale, Exchange or Retirement of the notes
Upon the sale, exchange or retirement of a note, a U.S. Holder generally will recognize capital gain or loss equal to the
difference between the amount realized (reduced by any amounts attributable to accrued but unpaid interest, which will be taxable as ordinary income) and the U.S. Holder's adjusted tax basis in
the note. Such gain or loss generally will constitute long-term capital gain or loss if the note was held by such U.S. Holder for more than one year and otherwise will be
short-term capital gain or loss. Under current law, net
capital gains of non-corporate taxpayers (including individuals) are, under some circumstances, taxed at lower rates than items of ordinary income. The deductibility of capital losses is
subject to limitations. In the case of a U.S. Holder who is a United States resident (as defined in Section 865 of the Code), any such gain or loss will be treated as
U.S. source, unless it is attributable to an office or other fixed place of business outside the United States and certain other conditions are met.
In general, information reporting requirements will apply to payments of principal and interest on a note and payments of the proceeds
of sale to U.S. Holders other than certain exempt recipients (such as corporations). In addition, a backup withholding tax (currently at a rate of 28%) may apply to such payments if such a
U.S. Holder fails to provide an accurate taxpayer identification number or otherwise fails to comply with applicable requirements of the backup withholding rules. Any amounts withheld under
those rules will be allowed as a credit against the U.S. Holder's U.S. federal income tax liability or refundable to the extent it exceeds such liability. A U.S. Holder who does
not provide a correct taxpayer identification number may be subject to penalties imposed by the IRS.
The discussion of U.S. federal income tax consequences set forth above is for general information only. Prospective purchasers should consult their tax
advisors with respect to the tax consequences to them of the purchase, ownership and disposition of the notes, including the tax consequences under state, local, foreign and other tax laws and the
possible effects of changes in U.S. federal or other tax laws.
Canada
The following describes the principal Canadian federal income tax considerations as of the date of this prospectus supplement,
generally applicable to a purchaser of notes (a "Non-Resident Holder") who, for the purposes of the
Income Tax Act
(Canada)
(the "ITA") at all relevant times, is not, and is not deemed to be, resident in Canada, does not use or hold and is not deemed to use or hold the notes in carrying on a business in Canada,
deals at arm's length with Talisman, is not an authorized foreign bank and is not an insurer that carries on an insurance business in Canada and elsewhere.
S-18
This
summary takes into account the current provisions of the ITA and the regulations passed pursuant to the ITA (the "ITA Regulations") in force as of the date of this prospectus
supplement, and proposals to amend the ITA and ITA Regulations publicly announced by the date of this prospectus supplement by the federal Minister of Finance and the current published administrative
practices of the Canada Revenue Agency. This description is not exhaustive of all Canadian federal income tax considerations and does not anticipate any changes in law whether by legislative,
government or judicial action other than the passage of such publicly announced proposed amendments to the ITA or ITA Regulations, nor does it take into account provincial, territorial or foreign tax
considerations which may differ from the Canadian federal income tax considerations described in this prospectus supplement.
This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder of notes. Prospective holders should consult
their own Canadian tax advisors with respect to the Canadian income tax considerations associated with their participation in this offering.
Pursuant
to the ITA, interest paid or credited or deemed to be paid or credited by Talisman on the notes as the case may be, to a Non-Resident Holder will be exempt from
Canadian withholding tax. No other taxes on income (including taxable capital gains) will be payable pursuant to the ITA by a Non-Resident Holder in respect of the acquisition, ownership
or disposition of the notes.
UNDERWRITING
We intend to offer the notes through the underwriters. Banc of America Securities LLC, BNP Paribas Securities Corp., Citigroup
Global Markets Inc. and RBC Capital Markets Corporation are acting as representatives of the underwriters named below. Subject to the terms and conditions contained in an underwriting
agreement between us and the underwriters, we have agreed to sell to the underwriters and the underwriters severally have agreed to purchase from us, the principal amount of the notes listed opposite
their names below.
|
|
|
|
|
|
Underwriters
|
|
Principal Amount
of Notes
|
|
Banc of America Securities LLC
|
|
US$
|
122,500,000
|
|
BNP Paribas Securities Corp.
|
|
|
122,500,000
|
|
Citigroup Global Markets Inc.
|
|
|
122,500,000
|
|
RBC Capital Markets Corporation
|
|
|
122,500,000
|
|
CIBC World Markets Corp.
|
|
|
30,800,000
|
|
HSBC Securities (USA) Inc.
|
|
|
30,800,000
|
|
Scotia Capital (USA) Inc.
|
|
|
30,800,000
|
|
TD Securities (USA) LLC
|
|
|
30,800,000
|
|
RBS Securities Inc.
|
|
|
30,800,000
|
|
Daiwa Securities America Inc.
|
|
|
17,780,000
|
|
SG Americas Securities, LLC
|
|
|
17,780,000
|
|
Desjardins Securities International Inc.
|
|
|
10,220,000
|
|
Mizuho Securities USA Inc.
|
|
|
10,220,000
|
|
|
|
|
|
|
Total
|
|
US$
|
700,000,000
|
|
|
|
|
|
Daiwa
Securities America Inc. has entered into an agreement with Sumitomo Mitsui Banking Corporation of Canada ("SMBCC") pursuant to which SMBCC provides certain advisory and/or other
services to Daiwa Securities America Inc., including services with respect to this offering. In return for the provision of such services by SMBCC to Daiwa Securities America Inc., Daiwa Securities
America Inc. will pay to SMBCC a mutually agreed-upon fee.
S-19
In
the underwriting agreement, the underwriters have severally agreed, subject to the terms and conditions set forth therein, to purchase all the notes offered hereby if any of the notes
are purchased. In the event of default by an underwriter, the underwriting agreement provides that, in certain circumstances, purchase commitments of the non-defaulting underwriters may be
increased or the underwriting agreement may be terminated. The obligations of the underwriters under the underwriting agreement may also be terminated upon the occurrence of certain
stated events.
We
have agreed to severally indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the
underwriters may be required to make in respect of those liabilities.
The
underwriters are offering the notes, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the
validity of the notes, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer's certificates and legal opinions. The underwriters reserve the
right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Commissions and Discounts
The representatives of the underwriters have advised us that the underwriters propose initially to offer the notes to the public at the
public offering prices set forth on the cover of this prospectus supplement and to certain dealers at such prices less a concession not in excess of 0.40% of the principal amount of the notes. The
underwriters may allow, and such dealers may reallow, a discount not in excess of 0.25% of the principal amount of the notes to certain other dealers. After the initial public offering, the public
offering prices, concessions and discounts may be changed by the underwriters.
The
expenses of the offering, not including the underwriting commission, are estimated to be approximately US$1.1 million and are payable by us.
No Sales of Similar Securities
We have agreed not to, prior to the closing of this offering, offer, sell, contract to sell, or otherwise dispose of any of our debt
securities which mature more than one year after the closing of this offering and which are substantially similar to the notes, or publicly announce an intention to effect such transaction, without
the prior written consent of the representatives of the underwriters.
New Issue of Notes
The notes are a new issue of securities with no established trading market. We do not intend to apply for listing of the notes on any
national securities exchange or for quotation of the notes on any automated dealer quotation system. We have been advised by the underwriters that they presently intend to make a market in the notes
after completion of the offering. However, they are under no obligation to do so and may discontinue any market-making activities at any time without any notice. We cannot assure the liquidity of the
trading market for the notes or that an active public market for the notes will develop. If an active public trading market for the notes does not develop, the market price and liquidity of the notes
may be adversely affected.
FINRA Regulation
Certain of the underwriters and/or their affiliates have performed certain investment banking, commercial banking and advisory services
for us from time to time for which they have received customary fees and expenses. The underwriters may, from time to time, engage in transactions with and perform services for us in the ordinary
course of their business. Also, certain of the underwriters are
S-20
affiliates
of banks which are lenders to us and to which we may be indebted from time to time. As a consequence of their participation in the offering, the underwriters affiliated with such banks will
be entitled to share in the underwriting commission relating to the offering of the notes. The decision to distribute the notes hereunder and the determination of the terms of the offering were made
through negotiations between us and the underwriters. Although the banks did not have any involvement in such decision or determination, a portion of the proceeds of the offering may be used by us to
repay indebtedness to one or more of such banks and may be used to repay certain other lenders. See "Use of Proceeds". As a result, one or more of such banks may receive more than 10% of the net
proceeds from the offering of the notes in the form of the repayment of such indebtedness. Accordingly, the offering of the notes is being made pursuant to Rule 5110(b)(7) of the Securities
Offering and Trading Standards and Practices of the Financial Industry Regulatory Authority. Pursuant to that rule, the appointment of a qualified independent underwriter is not necessary in
connection with this offering, as the offering is of a class of securities rated Baa or better by Moody's rating service or BBB or better by S&P's rating service.
Price Stabilization and Short Positions
In connection with the offering, the underwriters are permitted to engage in transactions that stabilize the market price of the notes.
Such transactions consist of bids or purchases to peg, fix or maintain the price of the notes. If the underwriters create a short position in the notes in connection with the offering,
(i.e., if they sell more notes than are on the cover page of this prospectus supplement), the underwriters may reduce that short position by purchasing notes in the open market. Purchases of a
security to stabilize the price or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases.
Neither
we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price
of the notes. In addition, neither we nor any of the underwriters makes any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not
be discontinued without notice.
Sales Outside the United States
Each Underwriter has represented and agreed that:
-
1.
-
it
has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the United Kingdom Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of the
notes in circumstances in which Section 21(1) of the FSMA would not apply to Talisman; and
-
2.
-
it
has complied with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the
United Kingdom.
In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member
State"), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State it has not made and
will not make an offer of notes described in this prospectus supplement to the public in that Relevant Member State prior to the publication of a prospectus, in relation to the notes, that has been
approved by the competent authority in that
S-21
Relevant
Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, except that it may, with effect from and
including such date, make an offer of notes to the public in that Relevant Member State at any time:
-
-
to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in securities;
-
-
to any legal entity which has two or more of (1) an average of at least 250 employees during
the last
financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual
or consolidated accounts;
-
-
to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject
to obtaining the prior consent of the representatives for any such offer; or
-
-
in any other circumstances falling within Article 3 of the Prospectus Directive,
provided
that no such offer of notes shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to
Article 16 of the Prospectus Directive.
For
the purposes of the above, the expression an "offer of notes to the public" in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes, as the expression may be varied in that Member State by
any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each
Relevant Member State.
The
notes offered hereby have not been qualified for sale under the securities laws of any province or territory of Canada and are not being and may not be offered or sold in Canada in
contravention of the securities laws of any province or territory of Canada. Each Underwriter participating in the distribution of the notes has agreed that it will not offer to sell, directly or
indirectly, any notes acquired by it in connection with the distribution, in Canada or to residents of Canada in contravention of the securities laws of Canada or any province or territory thereof.
LEGAL MATTERS
Certain legal matters relating to Canadian law will be passed upon for us by Macleod Dixon LLP, Calgary, Alberta, Canada.
Certain legal matters relating to United States law will be passed upon for us by Dorsey & Whitney LLP, Seattle, Washington. In addition, certain legal matters relating to
United States law will be passed upon for the underwriters by Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York.
S-22
DOCUMENTS INCORPORATED BY REFERENCE
This prospectus supplement is deemed to be incorporated by reference into the prospectus solely for the purposes of the notes offered
hereby. Other documents are also incorporated or deemed to be incorporated by reference into the prospectus. The following documents which have been filed with the securities commission or similar
authority in each of the provinces and territories of Canada are also specifically incorporated by reference in and form an integral part of the prospectus and this prospectus
supplement:
-
(a)
-
our
Annual Information Form dated March 9, 2009;
-
(b)
-
our
comparative audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2008, together with the
auditors' report thereon;
-
(c)
-
our
Management's Discussion and Analysis for the year ended December 31, 2008;
-
(d)
-
our
comparative unaudited interim consolidated financial statements, including the notes thereto, for the three months ended March 31, 2009,
and the related Management's Discussion and Analysis; and
-
(e)
-
our
Management Proxy Circular dated March 4, 2009.
Any statement contained in the prospectus, in this prospectus supplement or in any document (or part thereof) incorporated by reference, or deemed to be
incorporated by reference, into the prospectus for the purpose of the offering of the notes offered hereby shall be deemed to be modified or superseded to the extent that a statement contained in this
prospectus supplement or in any other subsequently filed document (or part thereof) that also is, or is deemed to be, incorporated by reference in the prospectus modifies or supersedes that
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this prospectus supplement or the prospectus. The modifying or superseding statement need not state that it has modified or superseded a
prior statement or include any other information set forth in the document which it modifies or supersedes.
You
may obtain a copy of our Annual Information Form and other information identified above by writing or calling us at the following address and telephone number:
Talisman
Energy Inc.
Suite 2000, 888 - 3
rd
Street S.W.
Calgary, Alberta T2P 5C5
(403) 237-1234
Attention: Corporate Secretary
S-23
Base Shelf Prospectus
US$2,000,000,000
Debt Securities
We
may from time to time sell up to US$2,000,000,000 (or the equivalent in other currencies) aggregate principal amount of our debt securities, or if any debt securities are
offered at an original issue discount, such greater amount as shall result in an aggregate offering price of up to US$2,000,000,000 during the 25 month period that this base shelf prospectus,
including any amendments hereto, remains valid. These debt securities may consist of debentures, notes or other types of debt and may be issuable in series. We will provide specific terms of these
securities in supplements to this prospectus. The debt securities will be our direct, unsecured and unsubordinated obligations and will be issued under a trust indenture. You should read this
prospectus and any prospectus supplement carefully before you invest.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offence.
We are permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this prospectus in accordance with Canadian
disclosure requirements, which are different from those of the United States. We prepare our financial statements, which are incorporated by reference herein, in accordance with Canadian
generally accepted accounting principles, and they are subject to Canadian auditing and auditor independence standards. They may not be comparable to financial statements of United States
companies.
Owning the debt securities may subject you to tax consequences both in the United States and Canada. This prospectus or any applicable prospectus
supplement may not describe these tax consequences fully. You should read the tax discussion in any applicable prospectus supplement.
Your ability to enforce civil liabilities under the United States federal securities laws may be affected adversely because we are incorporated in Canada,
most of our officers and directors and the experts named in the prospectus are Canadian residents, and most of our assets or the assets of our officers and directors and the experts are located
outside the United States.
The debt securities offered hereby have not been qualified for sale under the securities laws of any province or territory of Canada and are not being and may not
be offered or sold, directly or indirectly, in Canada or to any resident of Canada in contravention of the securities laws of any province or territory of Canada.
There is no market through which the securities may be sold and purchasers may not be able to resell securities purchased under this prospectus. This may affect
the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation.
See "Risk Factors".
Talisman's
registered and principal office is located at Suite 3400, 888 - 3rd Street S.W., Calgary, Alberta, Canada, T2P 5C5.
The
date of this prospectus is April 9, 2008
TABLE OF CONTENTS
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|
|
|
|
Page
|
ABOUT THIS PROSPECTUS
|
|
2
|
WHERE YOU CAN FIND MORE INFORMATION
|
|
3
|
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
|
5
|
TALISMAN ENERGY INC.
|
|
7
|
USE OF PROCEEDS
|
|
7
|
DESCRIPTION OF DEBT SECURITIES
|
|
7
|
RISK FACTORS
|
|
22
|
CERTAIN INCOME TAX CONSEQUENCES
|
|
23
|
PLAN OF DISTRIBUTION
|
|
23
|
INTEREST COVERAGE
|
|
24
|
PRICE RANGE AND TRADING VOLUME OF THE COMMON SHARES
|
|
25
|
LEGAL MATTERS
|
|
25
|
EXPERTS
|
|
26
|
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
|
|
26
|
AUDITORS' CONSENT
|
|
27
|
ABOUT THIS PROSPECTUS
In this prospectus and in any prospectus supplement, unless otherwise specified or the context otherwise requires, all dollar amounts
are expressed in Canadian dollars, and references to "dollars" or "$" are to Canadian dollars and all references to "US$" are to United States dollars. Except under "Description of Debt
Securities", and unless the context otherwise requires, all references in this prospectus and any prospectus supplement to "Talisman", "we", "us" and "our" mean Talisman Energy Inc. and its
subsidiaries on a consolidated basis.
This
prospectus is part of a registration statement on Form F-9 relating to the debt securities that we filed with the U.S. Securities and Exchange Commission
(the "SEC"). Under the registration statement, we may, from time to time, sell any combination of the debt securities described in this prospectus in one or more offerings up to an aggregate
principal amount of US$2,000,000,000. This prospectus provides you with a general description of the debt securities that we may offer. Each time we sell debt securities under the registration
statement, we will provide a prospectus supplement that will contain specific information about the terms of that offering of debt securities. The prospectus supplement also may add, update or change
information contained in this prospectus. Before you invest, you should read both this prospectus and any applicable prospectus supplement together with additional information described under the
heading "Where You Can Find More Information".
This prospectus does not contain all of the information set forth in the registration statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. You may refer to the registration statement and the exhibits to the registration statement for further information with respect to us
and the debt securities.
Unless
otherwise indicated, all financial information included and incorporated by reference in this prospectus or included in any prospectus supplement is determined using Canadian
generally accepted accounting principles, which we refer to as "Canadian GAAP". "U.S. GAAP" means generally accepted accounting principles in the United States. We prepare our financial
statements in accordance with Canadian GAAP, which differs from U.S. GAAP. Therefore, our comparative consolidated financial
2
statements
incorporated by reference in this prospectus may not be comparable to financial statements prepared in accordance with U.S. GAAP. You should refer to the notes to our comparative
audited consolidated financial statements for a discussion of the principal differences between our financial results calculated under Canadian GAAP and under U.S. GAAP.
WHERE YOU CAN FIND MORE INFORMATION
We file with the Alberta Securities Commission (the "ASC"), a commission of authority in the Province of Alberta similar to the
SEC, annual and interim reports, material change reports and other information. You may access our disclosure documents and any reports, statements or other information that we file with the Canadian
provincial securities commissions or other similar regulatory authorities through the internet on the Canadian System for Electronic Document Analysis and Retrieval, which is commonly known by the
acronym SEDAR and which may be accessed at www.sedar.com. We are subject to the informational requirements of the
U.S. Securities Exchange Act of
1934
, as amended (the "Exchange Act") and, in accordance with the Exchange Act, we also file reports with and furnish other information to the SEC. Under the
Canada-U.S. multijurisdictional disclosure system adopted by the United States, these reports and other information (including financial information) may be prepared in
accordance with the disclosure requirements of Canada, which differ from those in the United States. You may read any document we furnish to the SEC at the SEC's public reference room at
Room 1580, 100 F Street, N.E., Washington, D.C. 20549. You also may obtain copies of the same documents from the public reference
room of the SEC at 100 F Street, N.E., Washington D.C. 20549 by paying a fee. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our filings since October 28, 2002 are also electronically available from the SEC's Electronic Document Gathering and Retrieval System, which is
commonly known by the acronym EDGAR and which may be accessed at www.sec.gov, as well as from commercial document retrieval services.
Under
applicable securities laws in the United States and Canada, the SEC and the ASC allow us to incorporate by reference certain information we file with them, which means that
we can disclose important information to you by referring you to those documents. The following documents, which have been filed with the securities commission or similar authority in each of the
provinces and territories of Canada, are specifically incorporated by reference in and form an integral part of this prospectus:
-
(a)
-
our
Annual Information Form dated March 7, 2008;
-
(b)
-
our
comparative audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2007, together with the
auditors' report thereon;
-
(c)
-
our
Management's Discussion and Analysis for the year ended December 31, 2007; and
-
(d)
-
our
Management Proxy Circular dated March 7, 2008.
Any
annual information form, annual audited consolidated financial statements (together with the auditors' report thereon), information circular, material change reports (excluding
confidential material change reports), business acquisition reports and any interim unaudited consolidated financial statements together with the related management's discussion and analysis
subsequently filed by us with securities commissions or similar authorities in the relevant provinces and territories of Canada after the date of this prospectus and prior to the termination of the
offering of debt securities under any prospectus supplement shall be deemed to be incorporated by reference into this prospectus. In addition, to the extent that any document or information
incorporated by reference into this prospectus is included in any report on Form 6-K, Form 40-F, Form 20-F, Form 10-K,
Form 10-Q or Form 8-K (or any respective successor form) that is filed with or furnished to the SEC after the date of this prospectus, such document or
information shall be deemed to be incorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. In addition, we may incorporate by reference into
this prospectus information
3
from
documents that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.
Upon
a new annual information form and related annual audited consolidated financial statements and related management's discussion and analysis being filed by us with, and, where
required, accepted by, the applicable securities regulatory authorities during the currency of this prospectus, the previous annual information form, the previous annual audited consolidated financial
statements and management's discussion and analysis and all interim unaudited consolidated financial statements and management's discussion and analysis, material change reports and business
acquisition reports filed prior to the commencement of our financial year in which the new annual information form is filed shall be deemed no longer to be incorporated into this prospectus for
purposes of future offers and sales of debt securities hereunder. Upon interim unaudited consolidated financial statements and the accompanying management's discussion and analysis being filed by us
with the applicable securities regulatory authorities during the currency of this prospectus, all interim unaudited consolidated financial statements and the accompanying management's discussion and
analysis filed prior to the new interim unaudited consolidated financial statements shall be deemed no longer to be incorporated into this prospectus for purposes of future offers and sales of debt
securities under this prospectus and upon a new management proxy circular relating to an annual meeting of our shareholders being filed by us with the applicable securities regulatory authorities
during the currency of this prospectus, the management proxy circular for the preceding annual meeting of shareholders shall be deemed no longer to be incorporated into this prospectus for purposes of
future offers and sales of debt securities under this prospectus.
Updated
interest coverage ratios will be filed quarterly with the applicable securities regulatory authorities, including the SEC, either as prospectus supplements or exhibits to our
interim unaudited consolidated financial statements and annual audited consolidated financial statements and will be deemed to be incorporated by reference in this prospectus for the purpose of the
offering of the debt securities.
A
prospectus supplement or prospectus supplements containing the specific variable terms for an issue of debt securities will be delivered to purchasers of such debt securities together
with this prospectus and will be deemed to be incorporated by reference into this prospectus as of the date of such prospectus supplement and solely for the purposes of the debt securities issued
thereunder.
Any statement contained in this prospectus or in a document (or part thereof) incorporated or deemed to be incorporated by reference in this prospectus
shall be deemed to be modified or superseded, for purposes of this prospectus, to the extent that a statement contained in this prospectus or in any subsequently filed document (or part
thereof) that also is, or is deemed to be, incorporated by reference in this prospectus modifies or replaces such statement. Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute part of this prospectus. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other
information set forth in the document which it modifies or supersedes.
You
may obtain a copy of the annual information form and other information mentioned above by writing or calling us at the following address and telephone number:
Talisman
Energy Inc.
Suite 3400
888 - 3rd Street S.W.
Calgary, Alberta T2P 5C5
(403) 237-1234
Attention: Corporate Secretary
4
You should rely only on the information contained in or incorporated by reference in this prospectus or any applicable prospectus supplement and on the other
information included in the registration statement of which this prospectus forms a part. We have not authorized anyone to provide you with different or additional information. We are not
making an offer of these debt securities in any jurisdiction where the offer is not permitted by law. You should not assume that the information contained in or incorporated by reference in this
prospectus or any applicable prospectus supplement is accurate as of any date other than the date of the applicable document.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains or incorporates statements that constitute "forward-looking statements" within the meaning of the
U.S. Private Securities Litigation
Reform Act of 1995
. Any statements that express or involve discussions with respect to predictions, business
strategy, budgets, exploration and development opportunities or projects, infrastructure or construction projects, the expected timing of commencement of production and anticipated amount of
production of projects under development, acquisitions, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as
"expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans" or "planned", "projects" or "projected", "believes", "forecasts" or "forecasted", "estimates" or
"estimated", "intends", "possible", "probable", "scheduled", "likely" or "positioned", "goal", "objective", or stating that certain actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved) may be "forward-looking statements". Such statements are included, among other places, in this document under the heading "Risk Factors", in our Annual
Information Form under the headings "General Development of the Business", "Description of the Business", "Corporate Responsibility and Environmental Protection", "Legal Proceedings" and "Risk
Factors" and in the Management's Discussion and Analysis for the year ended December 31, 2007. Statements concerning oil and gas reserves contained in the Annual Information Form under
"Description of the Business Reserves Information", "Description of the Business Other Oil and Gas Information" and
"Description of the Business Supplemental Oil and Gas Information" or in the annual consolidated financial statements for the year ended December 31,
2007 and elsewhere also may be deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the resources described can be
profitably produced in the future.
You
are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are based on expectations, estimates and projections that involve a number of
risks, which could cause actual results to vary and, in some instances, to differ materially from those anticipated by us. The material risk factors include, but are not
limited to:
-
-
the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and
natural gas and market demand, including unpredictable facilities outages;
-
-
risks and uncertainties involving geology of oil and gas deposits;
-
-
the uncertainty of reserves estimates, reserves life and underlying reservoir risk;
-
-
the uncertainty of estimates and projections relating to production, costs and expenses;
-
-
potential delays or changes in plans with respect to exploration or development projects or capital expenditures;
-
-
the risk that adequate pipeline capacity to transport gas to market may not be available;
-
-
fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;
-
-
the outcome and effects of any future acquisitions and dispositions;
5
-
-
our ability to integrate any assets we have acquired or may acquire or the performance of those assets;
-
-
health, safety and environmental risks;
-
-
uncertainties as to the availability and cost of financing and
changes in the capital markets;
-
-
uncertainties related to the litigation process, such as possible discovery of new evidence or acceptance of novel legal
theories and the difficulties in predicting the decisions of judges and juries;
-
-
risks in conducting foreign operations (for example, political and fiscal instability
or the possibility of civil
unrest or military action);
-
-
competitive actions of other companies, including increased competition from other oil and gas companies;
-
-
changes to general economic and business conditions;
-
-
the effect of acts of, or actions against,
international terrorism;
-
-
the possibility that government policies or laws may change or governmental approvals may be delayed or withheld;
-
-
results of our risk mitigation strategies, including insurance and any hedging activities; and
-
-
our ability to implement our business strategy.
We
caution that the foregoing list of risk factors is not exhaustive. Additional information on these and other factors which could affect our operations or financial results are
included in our Management's Discussion and Analysis incorporated by reference in this document, under the heading "Risk Factors" in our Annual Information Form as well as in our other reports on file
with Canadian securities regulatory authorities and the SEC.
Forward-looking
statements are based on estimates and opinions of our management at the time the statements are made. We undertake no obligation to update forward-looking
statements should circumstances or management's estimates or opinions change, except as required by law.
6
TALISMAN ENERGY INC.
We are a large, independent oil and gas producer with operations in Canada and, through our subsidiaries, the North Sea, Southeast
Asia, Australia, North Africa, the United States and Trinidad and Tobago. Our subsidiaries are also active in a number of other international areas.
We
continually investigate our portfolio of assets and other business opportunities in the oil and gas business and may make acquisitions, investments or dispositions, some of which may
be material. In connection with any acquisition or investment, we may incur debt or issue equity.
We
are incorporated under the
Canada Business Corporations Act
. Our registered and principal office is located at Suite 3400,
888 - 3rd Street S.W., Calgary, Alberta, T2P 5C5, Canada.
Our
common shares are listed for trading on the Toronto Stock Exchange (the "TSX") and on the New York Stock Exchange (the "NYSE") under the trading symbol "TLM".
USE OF PROCEEDS
Unless otherwise indicated in an applicable prospectus supplement relating to a series of debt securities, we will use the net proceeds
we receive from the sale of the debt securities for the repayment of existing indebtedness and for general corporate purposes. The amount of net proceeds to be used for any such purpose will be
described in an applicable prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
In this section only, "we", "us", "our" or "Talisman" refer only to Talisman Energy Inc. without any of its subsidiaries. The
following description sets forth certain general terms and provisions of the debt securities. We will provide the particular terms and provisions of a series of debt securities and a description of
how the general terms and provisions described below may apply to that series in a supplement to this prospectus.
The
debt securities will be issued under an indenture, as may be supplemented from time to time, between us and The Bank of Nova Scotia Trust Company of New York, as "Trustee"
(hereinafter referred to as the "Indenture") dated January 27, 2006. The Indenture is subject to and governed by the
U.S. Trust Indenture Act of
1939
, as amended. A copy of the Indenture has been filed as an exhibit to the registration statement filed with the SEC. The following summaries of the Indenture and the debt
securities are brief summaries of certain provisions of the Indenture and do not purport to be complete; these statements are subject to the detailed provisions of the Indenture, including the
definition of capitalized terms used under this caption.
We
may issue debt securities and incur additional Indebtedness other than through the offering of debt securities pursuant to this prospectus.
General
The Indenture does not limit the aggregate principal amount of debt securities (which may include debentures, notes and other unsecured
and unsubordinated evidences of indebtedness) that we may issue under the Indenture. It provides that debt securities may be issued
from time to time in one or more series and may be denominated and payable in U.S. dollars or any other currency. Special Canadian and U.S. federal income tax considerations applicable
to any of our debt securities denominated in such foreign currency will be described in the prospectus supplement relating to any offering of debt securities denominated in a foreign currency. The
debt securities offered pursuant to this prospectus will be issued in an amount up to US$2,000,000,000 or the equivalent in other currencies. The Indenture also permits us to increase the principal
amount of any series of our debt securities previously issued and to issue that increased principal amount.
7
The
applicable prospectus supplement will set forth the specific terms of the debt securities or a series of debt securities being offered and may include, but may not be limited to,
the following:
-
-
the specific designation and the aggregate principal amount of the debt securities of such series;
-
-
the percentage or percentages of principal amount at which our debt securities of such series will be issued;
-
-
the date or dates on which the principal of (and premium, if any, on) our debt securities of such series will be
payable and the portion (if less than the principal amount) of the debt securities of such series to be payable upon a declaration of acceleration of maturity and/or the method by which such
date or dates shall be determined;
-
-
the rate or rates (whether fixed or variable) at which our debt securities of such series will bear interest, if any, and
the date or dates from which such interest will accrue;
-
-
the dates on which any interest will be payable and the regular record dates for the payment of interest on our debt
securities of such series in registered form;
-
-
the place or places where the principal of (and premium, if any) and interest, if any, on our debt securities will
be payable and each office or agency where our debt securities of such series may be presented for registration of transfer or exchange;
-
-
if other than U.S. dollars,
the currency in which our debt securities of such series are denominated or in which
currency payment of the principal of (and premium, if any) and interest, if any, on such debt securities of such series will be payable;
-
-
whether our debt securities of
such series will be issuable in the form of one or more global securities and if so the
identity of the depository for the global securities;
-
-
any mandatory or optional redemption or sinking fund provisions;
-
-
the period or periods, if any, within which, the price or prices at which, the currency in which and the terms and
conditions upon which our debt securities of such series may be redeemed or purchased by us;
-
-
the terms and conditions, if any, upon which you may redeem our debt securities
of such series prior to maturity and the
price or prices at which and the currency in which our debt securities of such series are payable;
-
-
any index, formula or other method used to determine the amount of
payments of principal of (and premium, if any)
or interest, if any, on our debt securities of such series;
-
-
the terms, if any, on which our debt securities may be converted or exchanged for other of our securities or
securities of
our subsidiaries;
-
-
any other terms of our debt securities of such series including covenants and events of default which differ from the
covenants or events of default in the general provisions of the Indenture, apply solely to a particular series of our debt securities being offered which do not apply generally to other debt
securities, or any covenants or events of default generally applicable to our debt securities, including our covenant to pay Additional Amounts and our option to redeem the debt securities of such
series rather than pay Additional Amounts, which do not apply to a particular series of our debt securities;
-
-
any applicable Canadian and U.S. federal income tax
consequences;
-
-
whether the series of our debt securities are to be registered securities, unregistered securities (with or without
coupons) or both; and
8
-
-
if other than denominations of US$1,000 and any integral multiple thereof, the denominations in which any registered
securities of the series shall be issuable and, if other than the denomination of US$5,000, the denomination or denominations in which any unregistered securities of the series shall
be issuable.
Our
debt securities may be issued under the Indenture bearing no interest or interest at a rate below the prevailing market rate at the time of issuance, or be offered and sold at a
discount below their stated principal amount. The Canadian and U.S. federal income tax consequences and other special considerations applicable to any such discounted debt securities or other
debt securities offered and sold at par which are treated as having been issued at a discount for Canadian and/or U.S. federal income tax purposes will be described in the prospectus supplement
relating to the debt securities.
Unless
otherwise indicated in a prospectus supplement, the Indenture does not afford holders of our debt securities the right to tender such debt securities to us for repurchase or
provide for any increase in the rate or rates of interest at which our debt securities will bear interest in the event we should become involved in a highly leveraged transaction or in the event we
have a change in control.
Ranking and Other Indebtedness
Our debt securities will be unsecured obligations and will rank equally and
pari passu
in right of payment priority with all of our
other unsecured and unsubordinated Indebtedness. The debt securities will be structurally
subordinated to all existing and future liabilities of any of our corporate or partnership subsidiaries, including trade payables and other indebtedness.
Debt Securities in Global Form
The Depository, Book-Entry and Settlement
Unless otherwise specified in a prospectus supplement, a series of our debt securities will be issued in global form as a "global
security" and will be registered in the name of and be deposited with a depository, or its nominee, each of which will be identified in the prospectus supplement relating to that series. Unless and
until exchanged, in whole or in part, for our debt securities in definitive registered form, a global security may not be transferred except as a whole by the depository for such global security to a
nominee of the depository, by a nominee of the depository to the depository or another nominee of the depository or by the depository or any such nominee to a successor of the depository or a nominee
of the successor.
The
specific terms of the depository arrangement with respect to any portion of a particular series of our debt securities to be represented by a global security will be
described in a prospectus supplement relating to such series. We anticipate that the following provisions will apply to all depository arrangements.
Upon
the issuance of a global security, the depository therefor or its nominee will credit, on its book entry and registration system, the respective principal amounts of our debt
securities represented by the global security to the accounts of such persons, designated as "participants", having accounts with such depository or its nominee. Such accounts shall be designated by
the underwriters or agents participating in the distribution of our debt securities or by us if such debt securities are offered and sold directly by us. Ownership of beneficial interests in a global
security will be limited to participants or persons that may hold beneficial interests through participants. Ownership of beneficial interests in a global security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the depository therefor or its nominee (with respect to interests of participants) or by participants or persons that hold
through participants (with respect to interests of persons other than participants).
So
long as the depository for a global security or its nominee is the registered owner of the global security, such depository or such nominee, as the case may be, will be considered the
sole owner or holder of the debt securities represented by the global security for all purposes under the Indenture. Except as
9
provided
below, owners of beneficial interests in a global security will not be entitled to have a series of our debt securities represented by the global security registered in their names, will not
receive or be entitled to receive physical delivery of such series of our debt securities in definitive form and will not be considered the owners or holders thereof under the Indenture.
Any
payments of principal, premium, if any, and interest on global securities registered in the name of a depository or its nominee will be made to the depository or its nominee, as the
case may be, as the registered owner of the global security representing such debt securities. None of us, the Trustee or any paying agent for our debt securities represented by the global securities
will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of the global security or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
We
expect that the depository for a global security or its nominee, upon receipt of any payment of principal, premium or interest, will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the records of such depository or its nominee. We also expect that payments by
participants to owners of beneficial interests in a global security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities
held for the accounts of customers registered in "street name", and will be the responsibility of such participants.
If a depository for a global security representing a particular series of our debt securities is at any time unwilling or unable to
continue as depository and a successor depository is not appointed by us within 60 days, we will issue such series of our debt securities in definitive form in exchange for a global security
representing such series of our debt securities. If an event of default under the Indenture has occurred and is continuing, debt securities in definitive form will be printed and delivered upon
written request by the holder to the Trustee. In addition, we may at any time and in our sole discretion determine not to have a series of our debt securities represented by a global security and, in
such event, will issue a series of our debt securities in definitive form in exchange for all of the global securities representing that series of debt securities.
Debt Securities in Definitive Form
A series of our debt securities may be issued in definitive form, solely as registered securities, solely as unregistered securities or
as both registered securities and unregistered securities. Registered securities will be issuable in denominations of US$1,000 and integral multiples of US$1,000 and unregistered securities will be
issuable in denominations of US$5,000 and integral multiples of US$5,000 or, in each case, in such other denominations as may be set out in the terms of the debt securities of any particular series.
Unless otherwise indicated in the applicable prospectus supplement, unregistered securities will have interest coupons attached.
Unless
otherwise indicated in the applicable prospectus supplement, payment of principal of (and premium, if any) and interest, if any, on our debt securities (other than global
securities) will be made at the office or agency of the Trustee, at One Liberty Plaza, New York, New York, or we can pay principal, interest and any premium by check mailed or delivered
to the address of the person entitled at the address appearing in the security register of the Trustee or electronic funds wire or other transmission to an account of the person entitled to receive
payments. Unless otherwise indicated in the applicable prospectus supplement, payment of any interest will be made to the persons in whose name our debt securities are registered at the close of
business on the day or days specified by us.
A
prospectus supplement may indicate the places to register a transfer of our debt securities in definitive form. Except for certain restrictions set forth in the Indenture, no service
charge will be payable
10
by
the holder for any registration of transfer or exchange of our debt securities in definitive form, but we may, in certain instances, require a sum sufficient to cover any tax or other governmental
charges payable in connection with these transactions.
We
shall not be required to:
-
-
issue, register the transfer of or exchange any series of our debt securities in definitive form during a period beginning
at the opening of business 15 days before any selection of securities of that series of our debt securities to be redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption;
-
-
register the transfer of or exchange any registered security in definitive form, or portion thereof, called for
redemption, except the unredeemed portion of any registered security being redeemed in part; or
-
-
issue, register the transfer of or exchange any of our debt securities in
definitive form which have been surrendered for
repayment at the option of the holder, except the portion, if any, thereof not to be so repaid.
Certain Covenants
The Indenture provides that, so long as any of our debt securities of any series remain outstanding, we will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or suffer to exist any Liens securing the Indebtedness of any person, except for Permitted Encumbrances, upon or with respect to our or their
respective properties, assets or undertaking whether now owned or hereafter acquired, unless at the time thereof or prior thereto, the debt securities then outstanding under the Indenture are equally
and ratably secured with such Indebtedness.
Consolidation, Amalgamation, Merger and Sale of Assets
We may not enter into any transaction, or series of transactions, whereby all or substantially all of our undertaking, property and
assets would become the property of any successor company whether by way of reconstruction, reorganization, consolidation, amalgamation, merger, transfer, sale, conveyance, lease or otherwise
unless:
-
-
the successor entity expressly assumes or assumes by operation of law all of our obligations under our debt securities and
under the Indenture;
-
-
at the time of and after giving effect to such transaction, no event of default, and no condition which, after notice or
lapse of time or both, would become an event of default, shall have happened and be continuing as to us or the successor company; and
-
-
certain other conditions are met;
provided
that the above restriction shall not apply to any transaction whereby we, or any Restricted Subsidiary, remain or become the successor company, although any Restricted Subsidiary which
becomes the successor company shall, in any event, expressly assume all of our obligations under our debt securities and under the Indenture if it does not assume them by operation of law.
Unless otherwise specified in the applicable prospectus supplement, all payments made by us under or with respect to the debt
securities will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including
penalties, interest and other liabilities related thereto) imposed or levied by or on behalf of the
11
Government
of Canada or any province or territory thereof or by any authority or agency therein or thereof having power to tax (hereinafter "Canadian Taxes"), unless we are required to withhold or
deduct Canadian Taxes by law or by the interpretation or administration thereof. If we are so required to withhold or deduct any amount for or on account of Canadian Taxes from any payment made under
or with respect to the debt securities, we will pay as additional interest such additional amounts ("Additional Amounts") as may be necessary so that the net amount received by each holder of debt
securities after such withholding or deduction (and after deducting any Canadian Taxes on such Additional Amounts) will not be less than the amount such holder would have received if such
Canadian Taxes had not been withheld or deducted.
However,
no Additional Amounts will be payable with respect to a payment made to a debt securities holder (such holder, an "Excluded Holder") in respect of the beneficial
owner thereof:
-
-
with which we do not deal at arm's length (within the meaning of the Income Tax Act (Canada)) at the time of making
such payment;
-
-
which is subject to such Canadian Taxes by reason of the debt securities holder's failure to comply with any
certification, identification, information, documentation or other reporting requirement, if compliance is required by law, regulation, administrative practice or an applicable treaty as a
precondition to exemption from, or a reduction in the rate of deduction or withholding of, such Canadian Taxes; or
-
-
which is subject to such Canadian Taxes by reason of the
debt securities holder being a resident, domicile or national of,
or engaged in business or maintaining a permanent establishment or other physical presence in or otherwise having some connection with Canada or any province or territory thereof otherwise than by the
mere holding of the debt securities or the receipt of payments thereunder.
In
any event, no Additional Amounts will be payable in excess of Additional Amounts which would be required if the holder of debt securities was a resident of the United States
for purposes of the Canada-U.S. Income Tax Convention (1980), as amended.
We
also will:
-
-
make such withholding or deduction; and
-
-
remit the full amount deducted or withheld to the relevant authority in accordance
with applicable law.
We
will furnish to the holders of the debt securities, within 60 days after the date the payment of any Canadian Taxes is due pursuant to applicable law, certified copies of tax
receipts evidencing such payment by us.
We
will, upon demand by a holder of debt securities (other than an Excluded Holder), indemnify such holder of debt securities for:
-
-
any Canadian Taxes so levied or imposed and paid by such holder as a result of payments made under or with respect to the
debt securities;
-
-
any liability (including penalties, interest and expenses) arising therefrom or with respect thereto; and
-
-
any Canadian Taxes imposed with respect to any reimbursement under the two preceding clauses, but excluding any such
Canadian Taxes on such holder's net income.
Wherever
in the Indenture there is mentioned, in any context, the payment of principal and premium, if any, interest or any other amount payable under or with respect to a debt security,
such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
12
We will:
-
-
furnish to the Trustee, within 10 days after we are required to file or furnish them with or to the SEC, copies
(which may be electronic copies) of our annual and interim reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may
from time to time by rules and regulations prescribe) which we may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the SEC, in accordance with the rules and regulations prescribed from
time to time by the SEC, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;
-
-
notwithstanding that we may not be required to
remain subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to
rules and regulations promulgated by the SEC we will continue to furnish to the Trustee:
-
-
within 10 days after the time periods required for the filing of Annual
Information Forms and annual audited
consolidated financial statements by the Canadian securities regulatory authorities, the information required to be provided in an Annual Information Form, annual audited consolidated financial
statements or similar annual filings under the securities laws of Canada or any province thereof to security holders of a corporation with securities listed on the Toronto Stock Exchange or its
successor, whether or not we have any of our securities so listed; and
-
-
within 10 days after the time periods required for the filing of interim reports by the Canadian
securities
regulatory authorities, the information required to be provided in interim reports under the securities laws of Canada or any province thereof to security holders of a corporation with securities
listed on the Toronto Stock Exchange or its successor, whether or not we have any of our securities so listed.
Tax Redemption
Unless otherwise specified in a prospectus supplement, a series of our debt securities will be subject to redemption at our option at
any time, in whole but not in part, on not more than 60 days' and not less than 30 days' notice at a redemption price equal to the principal amount thereof together with accrued and
unpaid interest to the date fixed for redemption if:
-
-
as a result of any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of
Canada or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in official position regarding the application or interpretation of such laws,
regulations or rulings (including a holding by a court of competent jurisdiction), which change or amendment is announced or becomes effective on or after the date specified in the applicable
prospectus supplement, we have or will become obligated to pay, on the next succeeding date on which interest is due, Additional Amounts with respect to any debt security of such series as described
under "Additional Amounts"; or
-
-
on or after the date specified in the applicable prospectus supplement, any action has been taken by any taxing authority
of, or any decision has been rendered by a court of competent jurisdiction in, Canada or any political subdivision or taxing authority thereof or therein, including any of those actions specified in
the clause immediately above, whether or not such action was taken or decision
13
was
rendered with respect to us, or any change, amendment, application or interpretation shall be officially proposed, which, in any such case, in the written opinion to us of legal counsel of
recognized standing, will result in a material probability that we will become obligated to pay, on the next succeeding date on which interest is due, Additional Amounts with respect to any debt
security of such series
and
in any such case, we, in our business judgment, determine that such obligation cannot be avoided by the use of reasonable measures available to us.
In
the event that we elect to redeem a series of our debt securities pursuant to the provisions set forth in the preceding paragraph, we shall deliver to the Trustee a certificate,
signed by an authorized officer, stating that we are entitled to redeem such series of our debt securities pursuant to their terms.
Events of Default
Unless otherwise specified in the applicable prospectus supplement, the following are events of default under the Indenture in relation
to the debt securities of any series:
-
-
default in payment of the principal of or premium, if any, on debt securities of that series when due and if the default
in payment continues for a period of four days after written notice of the default has been provided to us by the Trustee;
-
-
default in payment of any interest due on any of
the debt securities or of any sinking fund payment due with respect to
debt securities of that series and if the
default in payment continues for a period of 30 days after written notice of the default has been provided to us by the Trustee;
-
-
our winding up or liquidation, except
in the course of a transaction resulting in a successor company;
-
-
certain events of bankruptcy, insolvency or analogous proceedings;
-
-
if any process of execution is
enforced or levied upon any of our property or the property of a Restricted Subsidiary and
such property has a net book value in excess of the greater of $100,000,000 and 2% of our Equity, or the equivalent thereof in any other currency, and the process remains unsatisfied for a period of
60 days, as to movable or personal property, or 90 days, as to immovable or real property, provided that the process of execution is not in good faith disputed by us or the Restricted
Subsidiary, or, if disputed, we have not given evidence satisfactory to the Trustee that we or the Restricted Subsidiary has available a sum sufficient to pay in full the amount claimed in the event
that the claim shall be held to be a valid claim;
-
-
failure by us or a Restricted Subsidiary to make any principal payment at maturity, including any applicable grace period,
in respect of any issue of Indebtedness for Borrowed Money in any aggregate amount in excess of the greater of $100,000,000 and 2% of our Equity, or the equivalent thereof in any other currency, and
such failure shall have continued for a period of 30 days after written notice of the failure has been given to us by the Trustee, or to us and the Trustee by the holders of not less than 25%
in aggregate principal amount of the outstanding debt securities;
-
-
if a default with respect to any Indebtedness for Borrowed Money of ours or any Restricted Subsidiary occurs,
which
default results in the acceleration of any such Indebtedness for Borrowed Money of ours or any Restricted Subsidiary in an aggregate amount in excess of the greater of $100,000,000 and 2% of our
Equity, or the equivalent thereof in any other currency, without the Indebtedness for Borrowed Money having been discharged or such acceleration having been cured, waived, rescinded or annulled for a
period of 30 days after written notice of the default has been given to us by the Trustee, or to us and the Trustee by the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities; and
14
-
-
if we neglect to carry out or observe any other covenant or condition contained in the Indenture to be observed and
performed by us and after notice in writing has been given by the Trustee to us specifying such default and requiring us to put an end to the same and we fail to make good such default within a period
of 60 days or a shorter period as would, at any time, if continued, render any of our property or the property of any Restricted Subsidiary liable to forfeiture, unless the Trustee (having
regard to the subject matter of the neglect or non-observance) shall have agreed to a longer period and in such event, within the period agreed by the Trustee.
Additional
events of default may be established for a particular series of debt securities issued under the Indenture.
If
an event of default under the Indenture occurs and is continuing with respect to a series of our debt securities, then and in every such case the Trustee or the holders of at least
25% in aggregate principal amount of the outstanding debt securities of such affected series may declare the entire principal amount of all debt securities of such series and all accrued interest
thereon to be due and payable immediately. However, at any time after a declaration of acceleration with respect to a series of our debt securities has been made, but before a judgment or decree for
payment of the money due has been obtained, the holders of a majority in principal amount of the outstanding debt securities of that series, by written notice to us and the Trustee under certain
circumstances, shall rescind and annul such acceleration.
Reference
is made to the applicable prospectus supplement or supplements relating to each series of our debt securities which are original issue discount debt securities for the
particular provisions relating to acceleration of the maturity of a portion of the principal amount of such original issue discount securities upon the occurrence of any event of default and the
continuation thereof.
Subject
to certain limitations set forth in the Indenture, the holders of a majority in principal amount of the outstanding debt securities of all series affected by an event of default
shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the debt securities of all series affected by such event of default.
No
holder of a debt security of any series will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or a trustee,
or for any other remedy thereunder, unless:
-
-
such holder has previously given to the Trustee written notice of a continuing event of default with respect to the debt
securities of such series affected by such event of default;
-
-
the holders of at least 25% in aggregate principal amount of the outstanding debt securities of such series
affected by
such event of default have made written request, and such holder or holders have offered reasonable indemnity, to the Trustee to institute such proceeding as Trustee; and
-
-
the Trustee has failed to institute such proceeding, and has not received from the holders of a majority in aggregate
principal amount of the outstanding debt securities of such series affected by such event of default a direction inconsistent with such request, within 60 days after such notice, request
and offer.
However,
the limitations described above do not apply to a suit instituted by the holder of a debt security for the enforcement of payment of the principal of or any premium or interest
on such debt security on or after the applicable due date specified in such debt security. The Indenture requires that we will annually furnish to the Trustee a statement by certain of our officers as
to whether or not we, to the best of their knowledge, are in compliance with all conditions and covenants of the Indenture and, if not, specifying all such known defaults. So long as any debt
securities are outstanding, we are also required under the Indenture to notify the Trustee as soon as practicable upon becoming aware of any event of
15
default
or any event which would, with notification or with the lapse of time or otherwise, constitute an event of default.
Defeasance and Covenant Defeasance
Unless otherwise specified in the applicable prospectus supplement, the Indenture provides that, at our option, we will be discharged
from any and all obligations in respect of the outstanding debt securities of any series upon irrevocable deposit with the Trustee, in trust, of money and/or government securities which will provide
money in an amount sufficient in the opinion of a nationally recognized firm of independent chartered accountants to pay the principal of and premium, if any, and each installment of interest, if any,
on the outstanding debt securities of such series ("defeasance") (except with respect to the authentication, transfer, exchange or replacement of our debt securities or the maintenance of a place of
payment and certain other obligations set forth in the Indenture). Such trust may only be established if among other things:
-
-
we have delivered to the Trustee an opinion of counsel in the United States stating that (a) we have
received from, or there has been published by, the Internal Revenue Service a ruling, or (b) since the date of the Indenture, there has been a change in the applicable U.S. federal
income tax law, in either case to the effect that the holders of the outstanding debt securities of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had
not occurred;
-
-
we have delivered to the Trustee an opinion of counsel in Canada or a ruling from Canada Revenue Agency to the effect that
the holders of the outstanding debt securities of such series will not recognize income, gain or loss for Canadian federal income tax purposes as a result of such defeasance and will be subject to
Canadian federal income tax on the same amounts, in the same manner and at the same times as would have been the case had such defeasance not occurred (and for the purposes of any opinion, such
Canadian counsel shall assume that holders of the outstanding debt securities of such series include holders who are not resident in Canada);
-
-
no default or event of default
with respect to the debt securities of such series with the passing of time or the giving
of notice, or both, shall have occurred and be continuing on the date of such deposit or, with respect to events of default noted in the sixth and seventh bullet points under "Events of Default", at
any time during the period ending on the 91st day after the date of such deposit;
-
-
we are not an "insolvent person" within the meaning of the Bankruptcy and Insolvency
Act (Canada) on the date of such
deposit or at any time during the period ending on the 91st day following such deposit;
-
-
we have delivered to the Trustee an opinion of counsel to the effect that such
deposit shall not cause the Trustee or the
trust so created to be subject to the U.S. Investment Company Act of 1940, as amended; and
-
-
other customary conditions precedent are satisfied.
We
may exercise our defeasance option notwithstanding our prior exercise of our covenant defeasance option described in the following paragraph if we meet the conditions described in the
preceding sentence at the time we exercise the defeasance option.
The
Indenture provides that, at our option, unless and until we have exercised our defeasance option described above, we may omit to comply with the "
Limitations
on Liens
" and "
Consolidation, Amalgamation, Merger and Sale of Assets
" covenants and certain other covenants and such omission
shall not be deemed to be an event of default under the Indenture upon irrevocable deposit with the Trustee, in
16
trust,
of money and/or government securities which will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent chartered accountants to pay the principal
of and premium, if any, and each installment of interest, if any, on the outstanding debt securities ("covenant defeasance"). If we exercise our covenant defeasance option, the obligations under the
Indenture and the events of default, other than the obligations and events of default with respect to "
Limitations on Liens
",
"
Consolidation, Amalgamation, Merger and Sale and Assets
" and such other covenants, shall remain in full force and effect. Such trust may only be
established if, among other things:
-
-
we have delivered to the Trustee an opinion of counsel in the United States to the effect that the holders of our
outstanding debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not occurred;
-
-
we have delivered to the Trustee an opinion of counsel in Canada to the effect that the
holders of our outstanding debt
securities will not recognize income, gain or loss for Canadian federal income tax purposes as a result of such covenant defeasance and will be subject to Canadian federal income tax on the same
amounts, in the same manner and at the same times as would have been the case had such covenant defeasance not occurred (and for the purposes of such opinion, such Canadian counsel shall assume
that holders of our outstanding debt securities include holders who are not resident in Canada);
-
-
no default or event of default with respect to the debt securities of such
series with the passing of time or the giving
of notice, or both, shall have occurred and be continuing on the date of such deposit or, with respect to events of default noted in the sixth and seventh bullet points under "Events of Default", at
any time during the period ending on the 91st day after the date of such deposit;
-
-
we are not an "insolvent person" within the meaning of the Bankruptcy and Insolvency
Act (Canada) on the date of such
deposit or at any time during the period ending on the 91st day following such deposit;
-
-
we have delivered to the Trustee an opinion of counsel to the effect that such
deposit shall not cause the Trustee or the
trust so created to be subject to the U.S. Investment Company Act of 1940, as amended; and
-
-
other customary conditions precedent are satisfied.
Modification and Waiver
Modifications and amendments of the Indenture may be made by us and the Trustee with the consent of the holders of not less than a
majority in principal amount of the outstanding debt securities of each series issued under the Indenture affected by such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding debt security of such affected series:
-
-
change the stated maturity of the principal of, or extend the scheduled time of payment of any installment of interest, if
any, on any debt security;
-
-
change our obligation to pay Additional Amounts or indemnity payments due to Canadian Taxes;
-
-
reduce the principal amount of, or the premium, if any, or rate of interest, if any, on any debt security;
-
-
reduce the amount of principal of a debt security payable upon acceleration of the maturity thereof;
-
-
change the place of payment;
17
-
-
change the currency of payment of principal of, or premium, if any, or interest, if any, on any debt security;
-
-
impair the right to institute suit for the enforcement of any payment on or with respect to any debt security;
-
-
reduce the percentage of principal amount of outstanding debt securities of such series, the consent of the holders of
which is required for modification or amendment of Indenture provisions or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults and their
consequences; or
-
-
modify any provisions of the Indenture relating to the modification and amendment of the Indenture or the waiver of past
defaults or covenants, except as otherwise specified in the Indenture.
The
holders of a majority in principal amount of our outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive, insofar as that
series is concerned, compliance by us with certain restrictive provisions of the Indenture. The holders of a majority in
principal amount of outstanding debt securities of any series may waive any past default under the Indenture with respect to that series, except a default in the payment of the principal of
(or premium, if any) and interest, if any, on any debt security of that series or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding debt security of that series. The Indenture or the debt securities may be amended or supplemented, without the consent of any holder of such debt securities, in order to
cure any ambiguity or inconsistency or to make any change that, in each case, does not have a materially adverse effect on the rights of any holder of such debt securities.
Definitions
The following is a summary of certain definitions contained in the Indenture. Reference is made to the Indenture for the full
definition of all these terms:
"
Canadian GAAP
" means generally accepted accounting principles which are in effect from time to time in Canada;
"
company
" includes corporations, associations, partnerships, limited liability companies and business trusts;
"
Consolidated Assets
" means the aggregate amount of our assets as set forth in our most recent consolidated financial statements prepared
in accordance with Canadian GAAP and filed with a securities commission or similar regulatory authority;
"
Current Assets
" means current assets as determined in accordance with Canadian GAAP;
"
Equity
" means, as to any company, the shareholders' equity appearing in the company's most recent consolidated financial statements
prepared in accordance with Canadian GAAP;
"
Indebtedness
" as to any company, means, without duplication, all items of indebtedness or liability which in accordance with Canadian
GAAP would be considered to be indebtedness or liabilities of such company as at the date as of which indebtedness is to be determined, including Indebtedness for Borrowed Money;
"
Indebtedness for Borrowed Money
" as to any company, means, without duplication, the full amount of all liabilities of such company for
the repayment, either in money or in property, of borrowed money, and the full amount of liabilities of others for the repayment, either in money or in property, of borrowed money that is guaranteed
or endorsed (otherwise than for purposes of collection) by such company, or which such company is obligated, contingently or otherwise, to purchase, or on which such company is otherwise contingently
liable, provided that a contingent liability for borrowed money shall only constitute
18
Indebtedness
for Borrowed Money where the amount thereof is recorded as a liability in the most recent consolidated financial statements of such company in accordance with Canadian GAAP;
"
Lien
" means any security by way of an assignment, mortgage, charge, pledge, lien, encumbrance, title retention agreement or other
security interest whatsoever, howsoever created or arising, whether absolute or contingent, fixed or floating, perfected or not;
"
Permitted Encumbrances
" means any of the following:
-
-
liens for taxes, assessments or governmental charges which are not due or delinquent, or the validity of which we or any
Restricted Subsidiary shall be contesting in good faith;
-
-
liens for any judgments rendered, or claims filed, against us or any Restricted Subsidiary which we or such
Restricted
Subsidiary shall be contesting in good faith;
-
-
liens, privileges or other charges imposed or permitted by law such as carriers' liens, builders' liens, materialmen's
liens and other liens, privileges or other charges of a similar nature which relate to obligations which are not due or delinquent or the validity of which we or the Restricted Subsidiary shall be
contesting in good faith;
-
-
undetermined or inchoate liens arising in the ordinary course of and incidental to construction or our current operations
or the current operations of any Restricted Subsidiary which relate to obligations which are not due or delinquent, or the validity of
which we or the Restricted Subsidiary shall be contesting in good faith;
-
-
encumbrances incurred or created in the ordinary course of business and in accordance with sound
industry practice in
respect of the joint development, operation or present or future abandonment of properties or related production or processing facilities as security in favour of any other owner or operator of such
assets for our or any Restricted Subsidiary's portion of the costs and expenses of such development, operation or abandonment, provided that such costs or expenses are not due or delinquent;
-
-
liens for penalties arising under non-participation provisions of operating or similar agreements in respect
of our or any Restricted Subsidiary's properties;
-
-
easements, rights-of-way, servitudes, zoning or other similar rights or restrictions in respect of
land held by us or any Restricted Subsidiary (including, without limitation, rights-of-way and servitudes for railways, sewers, drains, pipe lines, gas and water mains,
electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) which are in existence on the date of execution of the Indenture or which do not, either
alone or in the aggregate, materially detract from the value of such land or materially impair its use in the operation of our or any Restricted Subsidiary's business;
-
-
liens incurred in the ordinary course of the oil and gas business in respect of take or pay obligations under gas sales
contracts;
-
-
royalties, gross overriding royalties or other similar burdens on production in the ordinary course of business affecting
our or any Restricted Subsidiary's properties, or encumbrances in respect of such royalties, gross overriding royalties or other similar burdens;
-
-
security given to a public
utility or any municipality or governmental or other public authority when required by such
utility, municipality or authority in connection with our operations or the operations of any Restricted Subsidiary, to the extent such
security does not materially detract from the value of any material part of our property or the property of any Restricted Subsidiary;
19
-
-
cash or marketable securities deposited in connection with bids or tenders, or deposited with a court as security for
costs in any litigation, or to secure workmen's compensation or unemployment insurance liabilities;
-
-
reservations, limitations or provisos expressed in or affecting any grant of
real or immovable property or any interest
therein;
-
-
liens on cash or marketable securities of Talisman or any Restricted Subsidiary granted in the ordinary course of business
in connection with:
-
-
any currency swap agreements, forward exchange rate agreements, foreign currency futures or options, exchange rate
insurance and other similar agreements or arrangements;
-
-
any interest rate swap agreements, forward rate agreements, interest rate cap or collar agreements or other similar
financial agreements or arrangements; or
-
-
any agreements or arrangements entered into for the purpose of hedging product prices;
-
-
pre-existing encumbrances on assets when acquired or when the owner thereof becomes a Restricted Subsidiary,
or encumbrances given by such Restricted Subsidiary on other assets of such Restricted Subsidiary in compliance with obligations under trust deeds or other instruments entered into prior to its
becoming a Restricted Subsidiary;
-
-
Purchase Money Mortgages;
-
-
security in respect of Current Assets given
in the ordinary course of business to any financial institution to secure any
Indebtedness payable on demand or maturing (including any right of extension or renewal) 18 months or less after the date the Indebtedness is incurred or the date of any renewal or extension
thereof;
-
-
security given by us in favour of a Restricted Subsidiary or by a Restricted Subsidiary in favour of us or another
Restricted Subsidiary;
-
-
security in respect of transactions such as the sale (including any forward sale) or other transfer, in the ordinary
course of business, of:
-
-
oil, gas or other minerals, whether in place or when produced, for a period of time until, or in an amount such that, the
purchaser will realize from the oil, gas or other minerals a specified amount of money (however determined) or a specified amount of such oil, gas or minerals; or
-
-
any other interests in property of a character commonly referred to as a "production payment";
-
-
security in respect of Indebtedness incurred, assumed or guaranteed by us or any Restricted Subsidiary that is incurred,
assumed or guaranteed in connection with the acquisition, construction or development of a particular asset or assets, including security in respect of the shares or Indebtedness of a Subsidiary
engaged directly or indirectly in the acquisition, construction or development of a particular asset or assets, provided that the grantees of such security have no recourse generally against any
assets, property or undertaking of ours or any Restricted Subsidiary except for the assets acquired, constructed or developed (and other de minimus assets associated therewith) or shares or
Indebtedness of a Subsidiary, other than a Restricted Subsidiary, engaged directly or indirectly in such acquisition, construction or development;
-
-
extensions, renewals or replacements of all or part of any security permitted under the preceding clauses provided that
such security relates to the same property plus improvements, if any, and provided that the amount of Indebtedness secured thereby will not exceed the principal amount of such Indebtedness immediately
prior to such extension, renewal or replacement including but not limited to all fees and expenses incurred in connection therewith; and
20
-
-
security that would otherwise be prohibited (including any extensions, renewals or replacements thereof or successive
extensions, renewals or replacements thereof), provided that the aggregate Indebtedness outstanding and secured under this clause does not (calculated at the time of giving of security on the
Indebtedness and not at the time of any extension, renewal or replacement thereof) exceed an amount equal to the greater of 10% of Consolidated Assets and $100,000,000 (or the equivalent
thereof in any other currency);
"
Purchase Money Mortgage
" means a mortgage, charge or other lien on or against any property securing any Purchase Money Obligation for
such property;
"
Purchase Money Obligation
" means any Indebtedness created or assumed as part of the purchase price of real or tangible personal property,
whether or not secured, any extensions, renewals or refundings of any such Indebtedness, provided that the principal amount of such Indebtedness outstanding on the date of such extension, renewal or
refunding is not increased, and further provided that any security given in respect of such Indebtedness shall not extend to any property other than the property acquired in connection with which such
Indebtedness was created or assumed and fixed improvements, if any, erected or constructed thereon;
"
Restricted Subsidiary
" means:
-
-
any Subsidiary of ours which owns oil or natural gas properties, or interests therein, in Canada, the
United Kingdom or the United States, or refining or manufacturing facilities, or interests therein, in Canada, the United Kingdom or the United States, related to the
refining or manufacture of petroleum hydrocarbons, petrochemicals, the constituents thereof or the derivatives therefrom, which assets represent not less than the greater of 5% of Consolidated Assets
and $100,000,000 (or the equivalent thereof in any other currency), excluding however any Subsidiary if the amount of our share of the Equity therein does not at the time exceed 2% of our
Equity, and
-
-
any Subsidiary of ours designated as a Restricted Subsidiary from time to time in the form of designation provided for
under the Indenture (a "Designation"), which Designation may not be revoked,
provided
that notwithstanding anything in the Indenture to the contrary:
-
-
a Restricted Subsidiary shall cease to be a Restricted Subsidiary when it ceases to be a Subsidiary for any reason,
-
-
any Subsidiary to which assets held by a Restricted Subsidiary, having a value equal to or greater than 5% of the assets
of the Restricted Subsidiary, are, directly or indirectly, transferred, other than for fair value, shall itself be deemed to be a Restricted Subsidiary, and
-
-
a Restricted Subsidiary shall cease to be a Restricted Subsidiary when the assets thereof represent less than the greater
of 5% of Consolidated Assets and $100,000,000 (or the equivalent thereof in any other currency) or if the amount of our share of the Equity therein does not at the time exceed 2% of
our Equity;
We
will specify in a prospectus supplement at the time we issue a series of debt securities which of our Subsidiaries are Restricted Subsidiaries at the time of the prospectus
supplement;
"
Subsidiary
" means with respect to us, any company of which there are owned, directly or indirectly, by or for us or by or for any company
in like relation to us, Voting Shares which in the aggregate, entitle the holders thereof to cast more than 50% of the votes which may be cast by the holders of all the outstanding Voting Shares of
such first mentioned company for the election of its directors, managing general partners or managing members, and includes any company in like relation to a Subsidiary; and
"
Voting Shares
" means shares of capital stock of any class or classes or other interests in the case of partnership, as applicable, having
general voting power under ordinary circumstances to elect directors,
21
managers,
managing partners in the case of a partnership, as applicable, trustees or similar controlling persons of a company.
Consent to Jurisdiction and Service
Under the Indenture, we irrevocably appoint CT Corporation System, 111 - 8th Avenue,
13th Floor, New York, New York, 10011, as our authorized agent for service of process in any suit or proceeding arising out of or relating to our debt securities or the Indenture
and for actions brought under U.S. federal or state securities laws in any U.S. federal or state court located in the City of New York, and irrevocably submit to the
non-exclusive jurisdiction of such courts.
Governing Law
Our debt securities and the Indenture will be governed by and construed in accordance with the laws of the State of New York.
Enforceability of Judgments
Since most of our assets, as well as the assets of a number of our directors and officers, are outside the United States, any
judgment obtained in the United States against us or certain of our directors or officers, including judgments with respect to the payment of principal on any debt securities, may not be
collectible within the United States.
We
have been advised by Macleod Dixon LLP, our Canadian counsel, that there is doubt as to the enforceability, in original actions in Canadian courts, of liabilities based upon
the U.S. federal securities laws and as to the enforceability in Canadian courts of judgments of U.S. courts obtained in actions based upon the civil liability provisions of the
U.S. federal securities laws. Therefore, it may not be possible to enforce those actions against us, our directors and officers or the experts named in the prospectus.
RISK FACTORS
In addition to the risk factors set forth below, additional risk factors are discussed in our Annual
Information Form and our Management's Discussion and Analysis, which risk factors are incorporated herein by reference.
Prospective purchasers of the debt securities should
consider carefully the risk factors set forth below as well as the other information contained in and incorporated by reference in this prospectus and in the applicable prospectus supplement before
purchasing the debt securities offered hereby. If any event arising from these risks occurs, our business, prospects, financial condition, results of operations or cash flows could be materially
adversely affected.
Changes in interest rates may cause the value of the debt securities to decline.
Prevailing interest rates will affect the market price or value of the debt securities. The market price or value of the debt
securities may decline as prevailing interest rates for comparable debt instruments rise, and increase as prevailing interest rates for comparable debt instruments decline.
Credit ratings may not reflect all risks of an investment in the debt securities and may change.
Credit ratings may not reflect all risks associated with an investment in the debt securities. Any credit ratings applied to the debt
securities are an assessment of our ability to pay our obligations. Consequently, real or anticipated changes in the credit ratings will generally affect the market value of the debt securities. The
credit ratings, however, may not reflect the potential impact of risks related to structure, market or other factors discussed herein on the value of the debt securities. There is no assurance that
any credit rating assigned to the debt securities will remain in effect for any given period of time or that any rating will not be lowered or withdrawn entirely by the relevant rating agency.
22
There can be no assurance as to the liquidity of the trading market for the debt securities or that a trading market for the debt securities will develop.
There is no public market for the debt securities and, unless otherwise specified in the applicable prospectus supplement, we do not
intend to apply for listing of the debt securities on any securities exchanges. If the debt securities are traded after their initial issue, they may trade at a discount from their initial offering
prices depending on prevailing interest rates, the market for similar securities and other factors, including general economic conditions and our financial condition. There can be no assurance as to
the liquidity of the trading market for the debt securities or that a trading market for the debt securities will develop.
Changes in foreign currency exchange rates may cause the value of the debt securities to decline.
Debt securities denominated or payable in foreign currencies may entail significant risk. These risks include, without limitation, the
possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential liquidity in the secondary market. These risks will
vary depending upon the currency or currencies involved and will be more fully described in the applicable prospectus supplement.
The debt securities will be effectively subordinated to certain indebtedness of our corporate and partnership subsidiaries.
We carry on our business through corporate and partnership subsidiaries. The majority of our assets are held in corporate or
partnership subsidiaries. Our results of operations and ability to service indebtedness, including the debt securities, are dependent upon the results of operations of these subsidiaries and the
payment of funds by these subsidiaries to us in the form of loans, dividends or otherwise. Our subsidiaries will not have an obligation to pay amounts due pursuant to any debt securities or to make
any funds available for payment on debt securities, whether by dividends, interest, loans, advances or other payments. In addition, the payment of dividends and the making of loans, advances and other
payments to us by our subsidiaries may be subject to statutory or contractual restrictions.
The
Indenture does not limit our ability or the ability of our subsidiaries to incur unsecured indebtedness. Such indebtedness of our subsidiaries would be structurally senior to the
debt securities. In the event of the liquidation of any subsidiary, the assets of the subsidiary would be used first to repay the obligations of the subsidiary, including indebtedness and trade
payables, prior to being used by us to pay our indebtedness, including any debt securities.
CERTAIN INCOME TAX CONSEQUENCES
The applicable prospectus supplement will describe certain Canadian federal income tax consequences to an investor who is a
non-resident of Canada of acquiring the debt securities offered thereunder, including whether the payments of principal, premium (if any) and interest will be subject to Canadian
non-resident withholding tax. The applicable prospectus supplement also will describe certain United States federal income tax consequences of the acquisition, ownership and
disposition of the debt securities offered thereunder by an initial investor who is a United States person (within the meaning of the United States Internal Revenue Code), including, to
the extent applicable, certain relevant U.S. federal income tax rules pertaining to capital gains and ordinary income, any consequences relating to debt securities payable in a currency other
than U.S. Dollars, issued at an original issue discount for U.S. federal income tax purposes or containing early redemption provisions or other special items.
PLAN OF DISTRIBUTION
We may sell debt securities to or through underwriters or dealers and also may sell debt securities directly to purchasers or
through agents.
23
The
distribution of debt securities of any series may be effected from time to time in one or more transactions:
-
-
at a fixed price or prices, which may be changed,
-
-
at market prices prevailing at the time of sale, or
-
-
at prices related to such prevailing market prices to be individually negotiated with purchasers.
In
connection with the sale of debt securities, underwriters may receive compensation from us or from purchasers of debt securities for whom they may act as agents in the form of
concessions or commissions. Underwriters, dealers and agents that participate in the distribution of debt securities may be deemed to be underwriters and any commissions received by them from us and
any profit on the resale of debt securities by them may be deemed to be underwriting commissions under the United States Securities Act of 1933, as amended (the "Securities Act").
The
prospectus supplement relating to each series of debt securities will set forth the terms of the offering of the debt securities, including to the extent applicable, the initial
offering price, our proceeds
from the offering, the underwriting concessions or commissions, and any other discounts or concessions to be allowed or reallowed to dealers. Underwriters with respect to each series sold to or
through underwriters will be named in the prospectus supplement relating to such series.
Under
agreements which may be entered into by us, underwriters, dealers and agents who participate in the distribution of debt securities may be entitled to indemnification by us against
certain liabilities, including liabilities under the Securities Act or to contribution with respect to payments which those underwriters, dealers or agents may be required to make in respect thereof.
The underwriters, dealers and agents with whom we enter into agreements may be customers of, engage in transactions with or perform services for us in the ordinary course of business.
The
debt securities offered hereby have not been qualified for sale under the securities laws of any province or territory of Canada and are not being and may not be offered or sold in
Canada in contravention of the securities laws of any province or territory of Canada. Each underwriter, each dealer and each agent participating in the distribution of any series of debt securities
must agree that it will not offer to sell, directly or indirectly, any such debt securities acquired by it in connection with such distribution, in Canada or to residents of Canada in contravention of
the securities laws of Canada or any province or territory thereof.
Each
series of debt securities will be a new issue of securities with no established trading market. Unless otherwise specified in a prospectus supplement relating to a series of debt
securities, the debt securities will not be listed on any securities exchange or on any automated dealer quotation system. Certain broker-dealers may make a market in the debt securities, but will not
be obligated to do so and may discontinue any market making at any time without notice. We cannot assure you that any broker-dealer will make a market in the debt securities of any series or as to the
liquidity of the trading market, if any, for the debt securities of any series.
INTEREST COVERAGE
The interest coverage ratios set out below have been prepared and included in this prospectus in accordance with Canadian disclosure
requirements and based on information prepared in accordance with Canadian GAAP. These coverages do not give pro forma effect to any offering of the debt securities offered by this prospectus
since the aggregate principal amount of debt securities that will be issued hereunder and the terms of issue are not presently known. These coverages do not purport to be indicative of interest
coverage ratios for any future periods.
24
The
following interest coverages are calculated on a consolidated basis for the year ended December 31, 2007 based on audited financial information.
|
|
|
|
|
|
|
|
December 31,
2007
|
|
Interest coverage (times)
|
|
|
|
|
|
Income
(1)
|
|
|
11.38
|
|
|
Income from continuing operations
(2)
|
|
|
6.83
|
|
Notes:
-
(1)
-
Net
income plus income taxes and interest expense; divided by the sum of interest expense and capitalized interest.
-
(2)
-
Net
income from continuing operations plus income taxes and interest expense from continuing operations; divided by the sum of interest expense and
capitalized interest from continuing operations.
PRICE RANGE AND TRADING VOLUME OF THE COMMON SHARES
Our outstanding common shares are currently traded on the TSX and the NYSE under the trading symbol "TLM". The following table sets
forth the price range and trading volume of our common shares as reported by the TSX and the NYSE for the periods indicated.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSX
|
|
NYSE
|
|
Period
|
|
High
|
|
Low
|
|
Volume
|
|
High
|
|
Low
|
|
Volume
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
|
|
$
|
22.32
|
|
$
|
20.23
|
|
|
73,545,746
|
|
|
US$19.72
|
|
|
US$17.51
|
|
|
52,425,760
|
|
May
|
|
$
|
22.19
|
|
$
|
20.68
|
|
|
77,039,304
|
|
|
US$20.69
|
|
|
US$18.60
|
|
|
59,332,394
|
|
June
|
|
$
|
22.67
|
|
$
|
19.98
|
|
|
110,303,912
|
|
|
US$21.26
|
|
|
US$18.64
|
|
|
56,373,156
|
|
July
|
|
$
|
21.50
|
|
$
|
19.07
|
|
|
81,847,116
|
|
|
US$20.62
|
|
|
US$17.86
|
|
|
68,241,726
|
|
August
|
|
$
|
19.64
|
|
$
|
16.90
|
|
|
101,426,183
|
|
|
US$18.51
|
|
|
US$15.74
|
|
|
83,028,160
|
|
September
|
|
$
|
19.84
|
|
$
|
18.13
|
|
|
89,760,372
|
|
|
US$19.93
|
|
|
US$17.19
|
|
|
53,014,408
|
|
October
|
|
$
|
20.60
|
|
$
|
19.01
|
|
|
72,930,476
|
|
|
US$21.75
|
|
|
US$19.23
|
|
|
57,614,862
|
|
November
|
|
$
|
20.51
|
|
$
|
17.40
|
|
|
66,232,298
|
|
|
US$22.08
|
|
|
US$17.51
|
|
|
73,198,923
|
|
December
|
|
$
|
19.34
|
|
$
|
17.20
|
|
|
55,469,113
|
|
|
US$18.90
|
|
|
US$17.45
|
|
|
50,927,760
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
|
|
$
|
19.55
|
|
$
|
15.20
|
|
|
120,069,642
|
|
|
US$19.73
|
|
|
US$14.58
|
|
|
127,585,488
|
|
February
|
|
$
|
17.74
|
|
$
|
15.25
|
|
|
89,319,240
|
|
|
US$18.19
|
|
|
US$15.10
|
|
|
105,235,280
|
|
March
|
|
$
|
18.38
|
|
$
|
13.50
|
|
|
83,017,940
|
|
|
US$18.05
|
|
|
US$15.12
|
|
|
97,427,400
|
|
April 1 - 8
|
|
$
|
19.98
|
|
$
|
17.90
|
|
|
34,938,474
|
|
|
US$19.81
|
|
|
US$17.45
|
|
|
37,198,086
|
|
LEGAL MATTERS
Unless otherwise specified in the prospectus supplement relating to a series of debt securities, certain legal matters relating to
Canadian law will be passed upon for us by Macleod Dixon LLP, Calgary, Alberta, Canada. Certain legal matters relating to United States law will be passed upon for us by Dorsey &
Whitney LLP, Seattle, Washington. In addition, certain legal matters in connection with the offering will be passed upon for the underwriters or agents by Paul, Weiss, Rifkind, Wharton &
Garrison LLP, New York, New York, with respect to United States law.
The
partners and associates of Macleod Dixon LLP and Dorsey & Whitney LLP as a group beneficially own, directly or indirectly, less than 1% of any class of
our securities.
25
EXPERTS
The comparative audited consolidated financial statements, including the notes thereto, incorporated by reference in this prospectus
have been so incorporated in reliance on the report of Ernst & Young LLP, Chartered Accountants, given on the authority of said firm as experts in auditing and accounting.
The
information relating to our reserves as at December 31, 2007 incorporated by reference in this prospectus has been compiled by us based on the report dated March 7,
2008 prepared by Mr. Michael Adams, an employee of Talisman, in his capacity as our Internal Qualified Reserves Evaluator. Mr. Adams beneficially owns, directly or indirectly, less than
1% of any class of our securities.
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been filed with the SEC as part of the registration statement of which this prospectus is a part insofar
as required by the SEC's Form F-9:
-
-
the documents listed in the second paragraph under "Where You Can Find More Information" in this prospectus;
-
-
the consent of our accountants Ernst & Young LLP;
-
-
the consent of our counsel Macleod
Dixon LLP;
-
-
the consent of Michael Adams, our Internal Qualified Reserves Evaluator;
-
-
powers of
attorney from directors and officers of Talisman;
-
-
the trust indenture relating to the debt securities; and
-
-
statement of eligibility of the trustee on
Form T-1.
26
AUDITORS' CONSENT
We have read the short form base shelf prospectus of Talisman Energy Inc. (the "Company") dated April 9, 2008
relating to the sale and issue of up to an aggregate principal amount of US$2,000,000,000 of debt securities of the Company from time to time in one or more series (the "Prospectus"). We have
complied with Canadian generally accepted standards for an auditor's involvement with offering documents.
We
consent to the incorporation by reference in the above-mentioned Prospectus of our report to the shareholders of the Company on the consolidated balance sheets of the Company as at
December 31, 2007 and 2006, and the consolidated statements of income, changes to shareholders' equity, comprehensive income and cash flows for each of the years in the three-year
period ended December 31, 2007. Our report is dated February 27, 2008.
|
|
|
Calgary, Canada
April 9, 2008
|
|
(Signed)
ERNST & YOUNG LLP
Chartered Accountants
|
27
US$700,000,000
7.750% Notes Due 2019
PROSPECTUS SUPPLEMENT
May
27, 2009
Banc of America Securities LLC
BNP PARIBAS
Citi
RBC Capital Markets
Canadian Imperial Bank of Commerce
HSBC
Scotia Capital
TD Securities
RBS
Daiwa Securities America Inc.
SOCIETE GENERALE
Desjardins Securities International Inc.
Mizuho Securities USA Inc.
QuickLinks
IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
TABLE OF CONTENTS
FORWARD-LOOKING INFORMATION
EXCHANGE RATE INFORMATION
SUMMARY OF THE OFFERING
TALISMAN ENERGY INC.
USE OF PROCEEDS
SELECTED FINANCIAL INFORMATION
CONSOLIDATED CAPITALIZATION
PRO-FORMA INTEREST COVERAGE
DESCRIPTION OF THE NOTES
CREDIT RATINGS
CERTAIN INCOME TAX CONSIDERATIONS
UNDERWRITING
LEGAL MATTERS
DOCUMENTS INCORPORATED BY REFERENCE
US$2,000,000,000 Debt Securities
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
WHERE YOU CAN FIND MORE INFORMATION
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
TALISMAN ENERGY INC.
USE OF PROCEEDS
DESCRIPTION OF DEBT SECURITIES
RISK FACTORS
CERTAIN INCOME TAX CONSEQUENCES
PLAN OF DISTRIBUTION
INTEREST COVERAGE
PRICE RANGE AND TRADING VOLUME OF THE COMMON SHARES
LEGAL MATTERS
EXPERTS
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
AUDITORS' CONSENT
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