Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) and Ecopetrol S.A. have agreed to acquire BP Exploration Company (Colombia) Limited. Talisman will complete its transaction through an indirect wholly owned subsidiary.

Talisman and Ecopetrol have reached an agreement to acquire all of the outstanding shares of BP Exploration Company (Colombia) Limited (BPXC), an indirect wholly owned subsidiary of BP plc, for total cash consideration of US$1.9 billion, which includes a working capital adjustment, estimated at approximately US$145 million. Under the terms of the transaction, Talisman will acquire a 49% interest in BPXC for US$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 US regulatory approval and other customary conditions.

"This is an exciting opportunity and an excellent fit with Talisman's strategy of long-term profitable growth," said John A. Manzoni, President & CEO. "These are tremendous assets that our team knows well. They are attractively priced, with excellent running room and we are partnering with the pre-eminent oil and gas company in Colombia.

"Talisman and Ecopetrol are currently partners in several blocks in Colombia and Peru. This acquisition of BPXC by Talisman and Ecopetrol is the most significant business transaction that the two companies have undertaken jointly to date. Talisman is looking forward to building on this strategic relationship between our two companies.

"Completion of this transaction will accelerate our objective of building a material core area in Latin America, with target production of at least 50,000 boe/d. This will add another oil weighted producing area to our asset mix. The acquisition provides over 12,000 boe/d of production net to Talisman, plus immediate cash flow which will fund the expected short-term exploration and development opportunities we see on this acreage.

"This acquisition builds on Talisman's large acreage position in Colombia, in close proximity to our Niscota Block, where we have announced a significant discovery with the Huron well. The acquisition also adds an ownership position in strategic infrastructure which provides a key competitive advantage. The size of the deal is very manageable for Talisman and allows us to preserve a strong balance sheet and maintain spending flexibility."