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Talisman Energy Inc., the Canadian company on the verge of being folded into a Spanish firm, has become the first major domestic oil and gas outfit to take major write-downs on some of its properties due to the collapse in oil and gas prices – a financial decision its peers may be forced to follow.

The company on Tuesday said it took after-tax impairment charges of about $1.37-billion (U.S.) in the fourth quarter. Talisman's assets in Texas's Eagle Ford shale formation took a significant hit, with the company taking a $614-million writedown on its investment there. The company also made writedowns on its assets in Iraq and Colombia, while completely erasing its goodwill in the North Sea.

Talisman has long admitted that some of its assets, such as some in the North Sea, are exceptionally troublesome. But the company attributed its Eagle Ford writedown solely to falling oil and gas prices over the past seven months, not bumpy operations. Eagle Ford is considered one of North America's prolific energy plays, with companies such as Encana Corp. flocking to the zone in hopes of boosting their production and profit. Talisman's Texas writedown indicates others may have to follow suit.

The Calgary-based firm said in a statement that its total $1.37-billion in impairments are "primarily as a result of a deterioration in forward commodity prices." Its partial writedown in the Eagle Ford is "due entirely to price declines," Talisman said.

Mason Granger, an oil and gas fund manager for Sentry Investments in Toronto, said the Eagle Ford charge is "surprising," and means more companies may have to do the same as they roll out year-end results and information on their reserves.

"I think there could be similar sort of writedowns," he said. "That's quite logical."

Morgan Stanley, the American investment bank, calculates oil must trade between $30 and $60 a barrel for companies to break even in the Eagle Ford. The North American benchmark price of oil closed at $50.02 a barrel Tuesday, compared with about $106 at the end of June.

Spain's Repsol SA in December signed a deal to buy Talisman in a deal worth roughly $8.3-billion. Talisman shareholders vote Feb. 18 on whether to accept the offer, which works out to $8 a share. The deal must be accepted by investors representing two-thirds of Talisman's shares. The two energy firms must also obtain regulatory approval. Analysts expect the deal to close. Mr. Granger does not believe the timing of Talisman's writedowns are related to the deal, given that the Canadian company is still independent.

Talisman lost $1.59-billion or $1.54 a share in the fourth quarter, compared with a loss of $1.01-billion or 98 cents in the fourth quarter of 2013.

In addition to the company's $614-million writedown in the Eagle Ford, Talisman fully impaired its investment in Iraq's Kurdistan region by $234-million "after determining that future investment in a capital-constrained environment was unlikely." It "fully wrote off" its North Sea goodwill of $287-million, and partly wrote down one of its investment in Colombia by $133-million. Talisman also said its North Sea joint venture with and China's Sinopec Corp. recorded a loss, including an after-tax impairment of $633-million to the Canadian company.

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