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A driver exits a Repsol SA gas station after refuelling near La Marbella beach in Barcelona in 2013.David Ramos/Bloomberg

Repsol SA's board of directors evaluated the details of a possible multibillion-dollar takeover of Talisman Energy Inc. on Monday following several days of negotiations between the two companies, bringing the Calgary-based firm a step closer to becoming a part of the Spanish multinational.

In a statement to Spain's stock market regulator, Repsol said a potential acquisition of Talisman, rather than the purchase of some of its assets, was on the board's agenda for the Monday meeting. Sources said there was no formal offer yet, and a deal was still not a certainty.

However, the situation is said to be advancing quickly as oil prices sink to new five-year lows daily. West Texas Intermediate crude fell $1.90 (U.S.) a barrel to settle at $55.91 on Monday.

"The company reports that, at the ordinary meeting of its board of directors to be held [Monday], it will submit for consideration, among other matters, the analysis of a possible transaction consisting in the acquisition of the total share capital of the Canadian company Talisman Energy Inc.," Repsol said in the statement to the Comisión Nacional del Mercado de Valores.

Repsol has said in the past it is anxious to deploy a sizable cash war chest on oil and gas operations in developed countries such as Canada and the United States, where Talisman has extensive assets. Sources said executives were in Calgary for negotiations last week.

After hefty gains as word of the talks spread, Talisman shares surged another 18 per cent on Monday to $5.97 (Canadian) on the Toronto Stock Exchange. The company had been under heavy selling pressure as oil prices declined rapidly in recent weeks, reducing its outlook for cash flow and increasing its relative debt burden as a result.

Talisman reiterated in a statement Monday it is in discussions with Repsol about a possible deal and has been approached by other parties regarding potential transactions. Bloomberg reported that Canada Pension Plan Investment Board was one of the other parties weighing potential transactions with Talisman.

The company cautioned there can be no assurances that any deal will be consummated or on what terms.

A bid for Talisman could land in the $6-to-$8 per share range, according to sources. The middle of that range would put a value of about $7.3-billion on Talisman's equity.

That price would represent a large premium to recent values, but would be well under the level of the stock price last year when major shareholder Carl Icahn bought his position as Talisman proceeded with a restructuring that included plans for extensive asset sales. At the time, investors wagered that the activist investor would shake up the company and lift the share price. That has proven to be more difficult than hoped.

Repsol has already made large-scale investments in North America. Its Houston office is its second largest and it has invested in U.S. shale operations as well as the Gulf of Mexico offshore.

It has no current oil and gas production in Canada, but has looked at assets in the past. The company has exploration acreage on the East Coast as well as a 75-per-cent stake in the Canaport liquefied natural gas facility in New Brunswick.