TLM

Talisman Energy (TLM.T) and Ecopetrol S.A. (EC) said Wednesday they have agreed to buy BP PLC's (BP.LN) unit, BP Exploration Company (Colombia) Limited, or BPXC, for $1.9 billion.

MAIN FACTS:

-Talisman will complete its transaction through an indirect wholly owned subsidiary.

-Purchase price includes a working capital adjustment, estimated at $145 million.

-Talisman will acquire a 49% interest in BPXC for $858 million (excluding its share of working capital), while Ecopetrol will take the remaining 51% interest.

-The transaction is expected to close by the end of 2010, subject to Colombian and U.S. regulatory approval and other customary conditions.

-Talisman and Ecopetrol are currently partners in several blocks in Colombia and Peru.

-The transaction includes BPXC's interests in the Tauramena (31%), Rio Chitamena (31%), Recetor (50%) and Piedemonte (50%) association contracts.

-BPXC also holds a 40.56% interest in the RC4 and RC5 exploration blocks offshore Cartagena.

-The transaction also includes BPXC's interests in the Cusiana gas processing facility and interests in four pipelines, totaling some 1,600 kilometers of crude and 400 kilometers of gas pipelines, including a 24.8% interest in the OCENSA crude oil pipeline.

-Talisman will hold a 49% indirect interest.

-BPXC currently have 470 employees, and it is expected that the majority of these will transfer with BPXC to the new owners.

-The transaction adds immediate production and cash flow to Talisman's Latin American asset base.

-Current BPXC production is approximately 25,000 barrels of oil equivalent, or boe, per day of which 65% is liquids production.

-Liquids production is exported or sold to domestic refineries and the natural gas production is sold domestically.

-Talisman estimates 2P reserves for BPXC, before royalties, of 123 million boe, with proved reserves of 95 million boe (approx.60% oil and liquids).

-Net of royalties, these numbers are 98 million boe (2P reserves) and 75 million boe (proved reserves).

-Talisman's indirect interest will be 49%.

-The acquisition includes an interest in strategic infrastructure, providing access to export markets.

-The transaction includes an interest in the OCENSA pipeline, which is critical to moving production from the Llanos basin to the Covenas Terminal on the coast.

-Current capacity on the pipeline is 450,000 barrels of oil per day.

-The pipeline is currently running at capacity and an ownership position will provide strategic egress, with liquids volumes in Colombia expected to rise.

-Transport via pipeline offers significant cost savings compared to trucking.

-Talisman will continue to maintain a separate office in Bogota to run its ongoing activities.

-BP shares closed Wednesday at 421.7 pence.

By Iain Packham, Dow Jones Newswires; 44-20-7842-9269; iain.packham@dowjones.com

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