NEW YORK (TheStreet) -- Shares of Seadrill (SDRL) are soaring, up 8.63% to $11.58 in midday trading Tuesday, as the energy sector gets a boost after Spanish energy company Repsol SA agreed to buy Talisman Energy (TLM) for $8.3 billion.
Repsol said Talisman will increase its output by 76% to 680,000 barrels of oil per day and boost reserves by 55%, the Associated Press reports.
Madrid-based Repsol said it would also take on $4.7 billion of Talisman debt, valuing the deal at $13 billion.
Under the terms of the deal, Talisman shareholders were being offered $8 per share, representing a 24% premium over the average share price of the last three months.
Separately, TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEADRILL LTD (SDRL) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."