Offshore staff

CALGARY, Alberta -- Talisman Energy Inc. says capital spending will remain level for 2007 at $4.8 billion, 80% of which will be spent in North America and the North Sea. Southeast Asia also will see investment, says Jim Buckee, president and CEO.

In Southeast Asia and Australia, Talisman plans to continue its focus on low-cost oil and natural gas developments and on monetizing its large natural gas reserves in Indonesia. The company also plans to drill three exploration wells in Vietnam and to prepare to drill a deepwater exploration prospect in Indonesia in 2008. Exploration and development spending in the region is expected to be $670 million in 2007.

In Indonesia, Talisman expects to complete and commission the Phase 2 expansion of its gas processing facilities at Corridor. In Malaysia and Vietnam, approximately 40% of spending is intended to be on development of the Northern fields in Block PM-3 CAA, with first oil expected in mid-2008.

"I am very excited about the potential offshore Vietnam where we currently have a well drilling and plan to drill three additional wells next year. We've also added a highly prospective block in Colombia and new deepwater acreage in Indonesia. We drilled successful wells recently at J2 in the UK and a successful oil well offshore Trinidad. In 2007, the company plans to participate in 35 international exploration wells (and eight contingent appraisal wells) with a net unrisked prospective and contingent resource potential of over 750 MMboe," Buckee says.

The company expects to spend $2.4 billion (50%) of its total budget on drilling, with over 600 wells planned, and an additional $1.8 billion on plant and equipment.

Exploration and development spending in the North Sea is expected to total $1.6 billion, with over 80% directed at development projects. The company's North Sea strategy is to develop commercial hubs around core operated properties and infrastructure. Key development projects include Tweedsmuir, Duart, Enoch, Wood, Blane, and Affleck, as well as the tie-back of the Galley field to Tartan. In Norway, development work is planned for the Rev and Yme field developments, the company says.

Talisman also plans to spend $65 million in Trinidad and Tobago, drilling at least two onshore and four offshore wells.

12/12/2006