Looking to 2009

Talisman’s priorities in 2009 are to:

• Preserve financial strength and flexibility in a low-price environment;
• Advance the strategy for profitable long-term growth and build on the success from last year; and
• Continue to focus on efficiency and costs.

Capital spending of $3.6 billion ^1,2

• The Company plans to balance capital spending with cash receipts in 2009

Spending in North America of $1.2 billion. Approximately 80% will be directed toward unconventional natural gas projects with a focus on:

• The Marcellus Shale play – Pennsylvania (drilling 36 gross wells)
• The Montney Core and Shale plays – Alberta and BC (drilling 49 gross wells)

Spending in the North Sea of $1.4 billion ²

• $1.1 billion on development
• In Norway, progress development of Yme
• In the UK, progress development of Burghley and Auk North and redevelopment of Auk South

Spending in Southeast Asia of $730 million ²

• $580 million in development spending
• First oil from Northern Fields in PM-3 CAA, with 16 development wells
• In Vietnam, sanction development of Block 15-2/01

Spending $660 million on international exploration

• Drill 24 exploration and appraisal wells in total
• Continuation of the appraisal and exploration program in Vietnam
• Up to 10 exploration wells in the North Sea
• Continuation of the exploration program in the Kurdistan region of northern Iraq
• Progress evaluation of recently awarded blocks in Colombia and continue drilling in the Niscota Block
• Complete evaluation of an earlier discovery on Block 64 in Peru