Struggling Canadian oil and gas producer, Talisman Energy (NYSE:TLM) continues to see its share price decline as management struggles to turn things around.

What's more, it appears as if Talisman's management is selling the family silver in an attempt to stop the flow of red ink. Indeed, Talisman continues to shed key assets, and some investors are beginning to ask where will the company stop?

The most shocking rumor came out last month when the market heard that the company was planning to sell its Asian assets, considered to be Talisman's crown jewels. Since then, other disposals have been announced.

Talisman's most recent disposal is the $1.3 billion sale of its stake in the Australian Laminaria-Corallina project, operated by Woodside Petroleum.

Talisman owns around 40% of the Laminaria-Corallina project; the rest is owned by Woodside, and the partnership has been in place since 1999. Production from the project started back during the late 90s and has steadily declined as the fields have aged.

Now, the project is considered no longer essential to Talisman's long-term growth plan, so the company is seeking to sell its share, as part of the debt reduction plan. 

Debt reduction
Talisman's current goal is to reduce debt down to a more meaningful level, after years of overspending. Multiple asset sales have been announced and undertaken since Talisman begun this turnaround more than a year ago.

At the end of March, Talisman's debt stood at $3.8 billion, and management is planning $2 billion of asset sales over the next 18 months to help pay down debt and fund capital spending.

However, things have hit a snag recently after the company failed to find buyers for its North American joint venture within international oil major, Statoil (NYSE:STO).

No buyers
Talisman and Statoil's North American venture is a 50/50 joint venture within the Eagle Ford region, which they had planned to sell to the highest bidder. The operations were once again considered non-core to both Statoil's and Talisman's long term plan.

The partners had hoped to raise as as much as $4 billion for the acreage. It was hoped that larger peers would show an interest.

Unfortunately, other operators failed to find any value in these properties and offered, according to inside sources, low-ball bids for the land. Apparently, the oil produced from the region is light condensate, or ultralight oil, an unwanted commodity as while it is technically oil, light condensate is worth materially less than crude oil on the open market. As a result, buyers wanted to pay less for the acreage than Statoil and Talisman were prepared to accept.

According to information supplied by Statoil, the venture produces around 27,700 barrels of oil equivalent per day.

The bottom line
Talisman continues to sell assets, but it would appear as if the whole company is on the chopping block. 

However, the company's North American assets failed to find any buyers, putting pay to Talisman's plan to raise around $2 billion from the sale. Still, selling its asset portfolio piece by piece could unlock value for Talisman and its shareholders -- only time will tell. But right now, the company's main income stream is asset sales. 

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Rupert Hargreaves owns shares of Talisman Energy (USA). The Motley Fool recommends Statoil (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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