(Corrects production figures in second paragraph. Original figure included the company's Norwegian output.)
* Sinopec to pay $1.5 bln for 49 pct of Talisman (UK) Ltd
* Assets produced 89,000 bpd oil, 43 mmcf of gas in Q2
* Joint venture will do new exploration, infill drilling
* Talisman plans $500 mln share buy back
* Talisman shares up 6.7 pct
By Scott Haggett
CALGARY, Alberta, July 23 (Reuters) - Talisman Energy Inc said on Monday that Sinopec Corp, China's top refiner, had agreed to buy a 49 percent stake in its North Sea operations for $1.5 billion as the Canadian company looks to strengthen a balance sheet battered by weak natural gas prices.
Talisman, Canada's No. 6 oil and gas exploration company, will form a joint venture with Sinopec to operate the assets, which produced 63,000 barrels of oil equivalent per day i n the first quarter of 2012.
Talisman has long looked to lower its stake in the North Sea, where it has had little exploration success and where higher taxes have lifted costs. Chief Executive John Manzoni has deployed cash generated in the region into Talisman's promising North American shale fields and its Southeast Asian oil fields.
"Talisman has delivered on two key promises for the year," Manzoni said in a statement.
"We are reducing our working interest and capital spend in the UK business by approximately half, allowing us to focus on and fund growth areas within our portfolio."
It was the second major investment in a Canadian oil explorer by a Chinese company announced on Monday, after CNOOC Ltd agreed to buy Nexen Inc for $15.1 billion. That was China's largest offer for a foreign oil producer since U.S. regulators foiled an $18.5 billion bid for Unocal Corp in 2005.
Sinopec will take a 49 percent stake in Talisman's North Sea assets, which Talisman will operate. With a partner on board, Talisman said it will defer decommissioning of some platforms and look to do additional infill drilling and exploration.
Talisman, whose stock was up almost 7 percent early on Monday, said Sinopec will be able to appoint its employees into key positions within Talisman Energy (UK) Ltd.
Aberdeen, Scotland-based Talisman UK holds an interest in 46 North Sea fields and operates 11 offshore platforms and one onshore platform.
Talisman said $500 million of the proceeds will be used to buy back its own shares, which have fallen 42 percent over the past 12 months because of weak natural gas prices.
The shares were up 71 Canadian cents, or 6.7 percent at C$11.79 on the Toronto Stock Exchange.
Sinopec's investment in the North Sea comes as confidence in the mature North Sea area is reviving despite recent production slumps. In the last two months Kuwait's state oil firm returned to the North Sea after a $500 million deal with EnQuest, and Japanese trading company Mitsui entered the North Sea for the first time.
Britain is set to pump fewer barrels of oil this year than last, even after production fell 19 percent in 2011. It is hoped that new fields coming onstream and rising investment will hope slow the decline in 2013.
Talisman said the deal is expected to close by year end, pending government and regulatory approvals.
(Additional reporting by Sarah Young in London; Editing by Janet Guttsman)
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