Repsol, which is exploring a deal with Canadian oil and gas producer Talisman Energy, will be better off with an acquisition of Talisman's trophy assets than a buyout of the entire firm, according to an energy banker.
Repsol, which is eyeing acquisitions to boost growth outside its home market Spain, should consider Talisman's Southeast Asian oil and gas assets that are expected to account for a large part of the Canadian firm's 2014 cash flow, the unnamed energy banker told Reuters.
The assets are spread across Indonesia, Malaysia and Vietnam.
Pursued by the news agency, Talisman could not be reached for comment.
Talisman, which has a market capitalisation of nearly C$11bn ($10.2bn, £6bn, €7.6bn) operates in some of North America's most sought-after petroleum areas -- the Eagleford shales in Texas and the Marcellus shale region in Northeast America, and in Northeast and Western Canada's up-and-coming Duvernay and Montney shale blocks.
The firm also has oil assets in Iraq's Kurdistan region and in the North Sea, the latter are held in a joint venture with China's Sinopec.
"Everyone is looking at tuck-in assets like conventional oil and conventional gas and deepwater oil that they can add to their portfolio and keep the growth curve going," according to the energy banker familiar with Talisman.
"I think that a sale of the company is not going to happen, because I don't think the final price per share would be fair for them, or particularly attractive."
"The assets that people want are the assets that everybody wants."
"I'd say some of their assets could go in a heartbeat but Talisman also knows that, and Talisman wants to extract maximum value for the whole thing, so that's where the dance now goes on," the energy banker added.
Talisman's stock finished at C$11.76 in Toronto on 24 July and is down 4.85% this year.
Spain's largest oil company, which has been on the lookout for assets to boost its exploration and production business, said it will return cash to shareholders if it fails to identify a company or assets that meet its acquisition goals.
Talisman shares surged 13% on 23 July after it confirmed that it had been approached by cash-rich Repsol "with regards to various transactions," but the stock is well off its record highs of over C$25 a share in 2008.
In May 2014, Talisman Chief Executive Hal Kvisle said the weakness of the North Sea business had delayed the company's turnaround.