HOUSTON ( TheStreet ) -- Under pressure from activist investor Carl Icahn , Talisman Energy (TLM) said Friday that it plans to sell part of its Montney acreage in northeast British Columbia to Progress Energy Canada, a unit of Malaysia's Petroliam Nasional Bhd , for C$1.5 billion ($1.4 billion), less than what some analysts said they expected the land would generate.
The sale comes a month after Icahn raised his Talisman stake to almost 7% and said he might talk to management about strategic alternatives and board seats.
Shares of Calgary-based Talisman were rising 1.7% to $11.91 in mid-day trading. Talisman has added 4.9% in 2013, trailing the Standard & Poor's 500 Index which has advance 24% this year.
The transaction includes 75% of Talisman's Montney position in the Farrell Creek and Cypress areas, or about 127,000 net acres, and 65 million cubic feet equivalent per day of Farrell Creek production as of Oct. 1. That figure is expected to increase in the fourth quarter as Talisman finishes its 2013 completion program, and related facilities.
The deal also includes C$800 million in estimated development costs being carried by South Africa's Sasol Ltd. as part of a joint venture through year's end, or around C$870 million at the deal's Oct. 1 effective date.
Talisman CEO Hal Kvisle said in a statement the sale represents a strong return on the company's Montney investment and brings it closer to achieving the $2 billion to $3 billion asset disposition target it set in March. "It is priced in line with recent major Montney transactions, further simplifies the company and enables us to strengthen our focus on our Edson-Duvernay producing and development assets," he said.