(Adds Repsol declined to comment, background)
July 22 (Reuters) - Spanish oil company Repsol SA is considering a bid for Canada-based Talisman Energy Inc , Bloomberg reported, citing people familiar with the matter.
Repsol has identified Talisman as a top target and is working with JPMorgan Chase & Co, one of the people said.
Repsol declined to comment. "We do not comment on market speculation," Repsol spokesman Kristian Rix said.
U.S.-listed shares of Talisman Energy, which has a market cap of $10.20 billion, were up about 14 percent at $11.25 in extending trading on Tuesday.
Repsol is looking for acquisition opportunities in OECD countries that offer extra growth capacity, Chief Financial Officer Miguel Martinez said in May after it exited the Argentine market.
The company raised $6.3 billion from selling bonds given by Argentina in compensation for the nationalisation of its majority stake in energy firm YPF and the sale of its remaining stake in the Argentine company.
Repsol has said it could spend around $10 billion on acquisitions and has named Norway, Canada and the United States as its first countries of choice. It hired JP Morgan as an advisor earlier this year.
Talisman, Canada's No. 5 independent oil and gas producer, has been restructuring its operations and cutting debt in an effort to boost its share price to satisfy disgruntled and activist investors such as Carl Icahn.
Talisman was not immediately available for comment. (Reporting by Mridhula Raghavan and Narottam Medhora in BANGALORE and Tracy Rucinski in MADRID; Editing by Mohammad Zargham)