North Africa

In Algeria, Talisman has a 35% non-operated interest in the Greater MLN project in Block 405a, located in eastern Algeria. In addition, the Company has a 2% interest in the unitized Ourhoud Field in Algeria and 5 to 10% non-operated interests in Tunisia. Liquids production in 2006 averaged 13,193 bbls/d, a 14% decrease from 2005 production, primarily due to an extended compressor outage at MLN.

In 2006, the Greater MLN Phase 2 project continued, with full gas injection expected in late 2007. During the year, the Company also continued planning for development of the EMK-TAGI field in the southern portion of Block 405a. First oil from the EMK project is expected in 2010.

In Tunisia, Talisman participated in two exploration wells, which were both successful in January 2007. The Company also entered into an agreement to farm-in to the prospective El Hamra Block in Tunisia.

Exploration and development spending in 2006 totaled $74 million. In 2007, spending is expected to be about $60 million, which includes drilling up to five exploration wells, 19 development wells and sanction of the EMK project.

Trinidad and Tobago

Talisman has a 25% non-operated interest in the Greater Angostura project, an oil and gas development in Block 2(c) offshore Trinidad and Tobago. Development continued in 2006 with the drilling of four additional wells. Liquids production in 2006 averaged 8,366 bbls/d, compared to 10,111 bbls/d in 2005, due in part to a mechanical failure in late November.

Offshore on Block 3a, the Kingbird exploration well was successful. A subsequent well, Ruby-1, was also successful, testing at approximately 5,000 bbls/d of oil. On the onshore Eastern Block, three exploration wells were plugged and abandoned.

Exploration and development spending in 2006 totaled $84 million. In 2007, spending is expected to be $65 million, which includes drilling up to seven exploration and four development wells.

Latin America

In Colombia, Talisman has non-operated interests in a number of blocks. Talisman was successful in bidding for the Niscota exploration block in the Llanos overthrust belt. Capital spending in 2007 is expected to be $17 million.

In Peru, Talisman has a 100% operated interest in Block 101, pending government approval, and a 25% non-operated interest in Block 64. Capital spending in 2007 is expected to be $9 million for seismic acquisition.

Qatar

Talisman holds a 100% interest in Block 10 offshore Qatar. During 2006, the Company drilled an unsuccessful well on the block. In 2007, Talisman plans to spend $25 million in order to drill up to two additional exploration wells.