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.

While analysts at Tudor, Pickering, Holt & Co. Securities applauded the company's ability to sell the position at a tough time for the Canadian asset and divestiture market, the valuation came in slightly below its $2 billion mark. However, they said the minor net asset value hit, which they estimate at around 45 cents per share, was outweighed by Talisman's positive move to clean up its portfolio.

"[The] company should easily be able to replace production through acceleration of Marcellus and Duvernay drilling," they said, referring to Talisman's properties in Pennsylvania and central Alberta.

On Wednesday Kvisle said on a conference call that the company took its properties in the northern part of central Alberta's Duvernay shale field off the block, opting to seek a 50% joint venture partner instead.

Closing is expected in the first quarter after regulatory approvals, which includes Industry Canada. The company plans to use the proceeds to pay down debt and strengthen its balance sheet.

Talisman is keeping its Groundbirch and Saturn assets, including about 48,000 net acres of prospective Montney land, which Tudor Pickering said it thinks may be sold at a later date for around $250 million.

Last fall, Talisman brought back former CEO Kvisle to dump assets or find partners for some of its properties after the sudden departure of CEO John Manzoni over poor stock performance.

In July the company started the sale process for its 12% stake in the Ocensa pipeline in Colombia, the Norwegian portion of its North Sea assets and its Montney and North Duvernay assets in Canada.

In a separate statement, Progress said the deal's assets include 11,000 barrels of oil equivalent per day and wells, pipelines and processing plants in the Greater Farrell and Great Cypress areas.

Progress CEO Michael Culbert said in a statement the natural gas interests are an attractive complement to the company's existing North Montney asset base and are among the largest remaining North Montney lands not dedicated to a potential liquefied natural gas project.

"The location, resource potential and operational synergies of these assets make this an ideal fit that expands our British Columbia resource base and increases our land position to 1.2 million acres," he said.

Progress said the deal includes Talisman's 50% interest in Greater Farrell; Talisman's partner, Sasol, owns the remaining 50%. Progress plans to use the C$870 million "carry" by Sasol to fund part of its share of capital investments in the Greater Farrell area over the coming years, which will offset the deal's acquisition cost.

Progress also noted that it's picking up Talisman's partnership interest in the Greater Cypress area where the two already have joint operations. Last month Malaysian prime minister Najib Razak said Petroliam Nasional plans to build a liquefied natural gas plant and pipeline in Canada at a cost of C$36 billion.

Petroliam Nasional bought Progress last year for C$5.2 billion after the Canadian government initially opposed it.

Jefferies LLCandScotiabankadvised Talisman on the sale.

--By Claire Poole in Houston.