Repsol/Talisman

Overview

Under a CBCA Plan of Arrangement, common shareholders of the Company (other than dissenting shareholders) will receive U.S.$8.00 in cash for each common share, which will be transferred to AcquisitionCo. Preferred shareholders (other than dissenting shareholders) will receive $25.00 in cash plus all accrued but unpaid dividends for each Preferred Share, which will be transferred to AcquisitionCo. Aggregate consideration is approximately U.S.$8.5B. This amount will be reduced by $Cdn.$200M plus accrued but unpaid dividends if Preferred Shareholder approval is not obtained to participate.

The Company

A Canadian oil and gas corporation whose core operations are in the U.S., Canada, Columbia and Asia-Pacific. Its Common shares trade on the TSX and NYE and its Preferred Shares trade on the TSX. It is not quickly apparent from the published materials whether it is a s. 212.3(10)(f) corporation.

Repsol

A Spanish oil and gas corporation whose ordinary shares are listed on four Spanish stock exchanges as well as on the Buenos Aires Stock Exchange and whose ADRs trade on the OTCQX market in the U.S.

AcquisitionCo

An indirect wholly-owned CBCA subsidiary of Repsol.

Dividend

A dividend of U.S.$0.1125 per Common Share will be declared and paid as of a record date before the Plan of Arrangement.

Canadian tax consequences

Acquisition of Company shares will occur on a taxable basis.

U.S. tax consequences

Taxable transaction.