A man walks past a petrol station owned by Spanish oil major Repsol in central Madrid November 26, 2013.Sergio Perez/Reuters
You have to hand it to the analysts who follow Spain's Repsol SA – they're an obedient bunch.
In a conference call held on Thursday to discuss the Spanish oil company's second-quarter results, chief financial officer Miguel Martinez kicked off the question and answer session by saying executives would not comment on "our M&A activities," that is, that business regarding Talisman Energy Inc.
Calgary-based Talisman said on Wednesday that it had discussed "various transactions" with Repsol but gave no guarantee that a deal would result.
Fifteen analysts from some of the world's best-known investment banks participated in the conference call and, despite the intense interest in the Repsol-Talisman talks, only one broke ranks to even mention Talisman, according to a transcript of the proceedings.
"I wanted to ask you about Talisman's portfolio; obviously I can't," said Thomas Adolff of Credit Suisse. "I'm struggling to see any attraction there, but I guess the industry likes to window shop and the market likes to speculate."
He then asked about Repsol's Libyan operations.
Flush with $5-billion (U.S.) in compensation it received from the nationalization of its operations in Argentina, and another $1.3-billion from the sale of its interests in YPF, the Argentine oil company, Repsol is scouting for opportunities. The company has expressed interest in Canada, the U.S., Norway and other OECD countries. Talisman's operations span many of those.
Asked by another analyst if Repsol currently has the expertise to operate a U.S. or Canadian shale play, or an Alberta oil sands project, Mr. Martinez said: "Right now, there's nothing on the table, so basically what I can tell you is that those capabilities are not in our company."
Talisman shares retraced some of the gains from Wednesday, when the company acknowledged the talks. Investors may have better luck gleaning info about potential deals during Talisman's second-quarter conference call, scheduled for Tuesday.
Jeffrey Jones