Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) reported its operating
and (unaudited) financial results for 2011. All values in this
release are in US$ unless otherwise stated.
-- Cash flow(1) was $3.4 billion, up 16% year over year. Fourth quarter
cash flow was up 25% over the same period last year, due to higher oil
prices.
-- Net income was $776 million, down 18% due to higher DD&A, lower gains on
asset sales, and higher operating expenses and taxes.
-- Earnings from operations(1) increased 9% year over year, to $604
million.
-- Production averaged 426,000 boe/d, an increase in underlying production
of 9% over the previous year.
-- Proved reserves replacement was 157%, at a cost of less than $20/boe.
The company's three-year replacement cost trend continues to improve.
-- Shale volumes in North America more than doubled year over year, to 500
mmcfe/d.
-- The company commenced drilling in the Duvernay shale play.
-- The non-operated Kitan project was commissioned and started producing
oil in October.
-- The company drilled a successful well in PNG at year-end as part of its
gas aggregation strategy and continues its active drilling program in
Colombia.
(1) The terms "cash flow" and "earnings from operations" are
non-GAAP measures. Please see the advisories and reconciliations
elsewhere in this news release.
"2011 saw its share of successes as well as challenges for the
company," said John A. Manzoni, President and Chief Executive
Officer. "North American natural gas prices fell by a third, ending
the year below $3, and we saw a significant tax increase in the UK.
In addition, our own delivery, particularly in the North Sea, fell
short of expectations.
"There were also a large number of positives during the year.
Oil prices remained high and helped drive annual cash flow up by
16%. The company grew underlying production by 9% with record shale
volumes, two new projects in Southeast Asia and production from
Colombia. We have built out our Eagle Ford organization to full
capacity from a standing start and started piloting the
liquids-rich Duvernay shale, which we will test through this
year.
"We have an active exploration and appraisal drilling program in
Colombia, which continues to demonstrate success. We drilled two
encouraging development wells in Piedemonte and continue to
appraise Block 6 and the Akacias discovery in Block 9. In Southeast
Asia, gas prices averaged $9.30/mcf in 2011, and the business is
expected to grow at an average rate of approximately 8% per year
over the next few years.
"Talisman drilled a successful gas condensate well at year-end
in Papua New Guinea (PNG), providing ongoing confidence in our gas
aggregation strategy. We are also making excellent progress towards
bringing in a strategic partner. In the Kurdistan Region of
northern Iraq, we have confirmed a substantial natural gas and
condensate discovery with our recent Topkhana well.
"We have reduced replacement costs by 50% over the last three
years, improving our long-term profitability. In 2011, our reserves
replacement cost was less than $20/boe, with costs in North America
less than $10/boe. We replaced 157% of production with proved
reserves last year.
"In setting our plans for 2012, our expectation is that North
American gas prices will remain low, but that oil will be
underpinned at $85/bbl or more. Our priorities are profitability
versus headline growth, while preserving our balance sheet. We will
reduce exploration and development spending from approximately $4.5
billion to around $4 billion, with 80% of this investment directed
towards liquids-rich opportunities. Areas of increased investment
this year will include the liquids-rich Eagle Ford and Duvernay
shale plays, as well as Colombia.
"We will continue to focus our portfolio and seek to divest some
non-core assets in our North American business, reduce our exposure
in the North Sea, and take decisions on exiting some exploration
areas as we drill them over the course of the next 12 months.
Talisman's balanced portfolio provides options to redirect capital,
and to adjust focus as external conditions change.
"As a result of the reduction in spending and the shift to
liquids, we expect underlying production growth of 0 - 5% this
year. However, we are setting Talisman up for an increase in
liquids production in 2013 and beyond. For example, we expect to
grow liquids production in North America from approximately 25,000
bbls/d in 2012 to over 60,000 bbls/d by 2015. And we remain
confident in our projection of 5 - 10% average annual production
growth through the medium term."
Financial Results
The financial information contained in this release is
unaudited. The company expects to file its audited Consolidated
Financial Statements for the year ended December 31, 2011, along
with the related Management's Discussion and Analysis, Annual
Information Form and Annual Report on Form 40-F, by March 5,
2012.
The company announced its capital spending plans for 2012 on
January 10, 2012. For additional information, please visit
Talisman's website at www.talisman-energy.com.
Financial Results
----------------------------------------------------------------------------
December 31 Three Months Ended Year Ended
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
Cash flow(2) ($ million) 824 659 3,434 2,954
----------------------------------------------------------------------------
Cash flow per share(2) 0.81 0.65 3.36 2.90
----------------------------------------------------------------------------
Net income (loss) ($
million) (117) (350) 776 945
----------------------------------------------------------------------------
Net income (loss) per share (0.11) (0.34) 0.76 0.93
----------------------------------------------------------------------------
Earnings from operations(2)
($ million) 114 129 604 552
----------------------------------------------------------------------------
Earnings from operations per
share(2) 0.11 0.13 0.59 0.54
----------------------------------------------------------------------------
Average shares outstanding -
basic (million) 1,021 1,018 1,023 1,018
----------------------------------------------------------------------------
(2) The terms "cash flow," "cash flow per share," "earnings from
operations," "earnings from operations per share," "exploration and
development spending" and "net debt" are non-GAAP measures. Please
see the advisories and reconciliations elsewhere in this news
release.
Cash flow was $3.4 billion for the year, up from $3.0 billion in
2010, with higher oil prices offsetting higher royalties, operating
expenses and cash taxes. Cash flow for the quarter was $824 million
versus $659 million a year ago.
Net income was $776 million versus $945 million in 2010,
reflecting higher DD&A with new projects in Southeast Asia and
the acquisition of producing assets in Colombia; lower gains on
asset sales in 2011; higher operating expenses and taxes; and lower
mark-to-market gains on derivatives. The company recorded a net
loss of $117 million in the fourth quarter, compared to a net loss
of $350 million in 2010.
Earnings from operations, which exclude non-operational items,
were $604 million in 2011, compared to $552 million in 2010.
Exploration and development spending(2) for the year totaled
$4.6 billion. North America accounted for 49% of spending, the
North Sea 27%, and Southeast Asia 15%. Year-end net debt(2) was
$4.5 billion.
Production
----------------------------------------------------------------------------
December 31 Three Months Ended Year Ended
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
Oil and liquids (mbbls/d)
----------------------------------------------------------------------------
North America 26 21 23 23
------------------------------------------------
North Sea 91 121 98 113
------------------------------------------------
Southeast Asia 38 33 34 39
------------------------------------------------
Other 25 15 23 14
----------------------------------------------------------------------------
Total oil and liquids
(mbbls/d) 180 190 178 189
----------------------------------------------------------------------------
Natural gas (mmcf/d)
----------------------------------------------------------------------------
North America 969 780 899 778
------------------------------------------------
North Sea 56 109 52 104
------------------------------------------------
Southeast Asia 508 469 506 485
------------------------------------------------
Other 39 - 34 -
----------------------------------------------------------------------------
Total natural gas (mmcf/d) 1,572 1,358 1,491 1,367
----------------------------------------------------------------------------
Total (mboe/d) 442 417 426 417
----------------------------------------------------------------------------
Assets sold - North America
(mboe/d) - 8 - 27
----------------------------------------------------------------------------
Production from ongoing
operations (mboe/d) 442 409 426 390
----------------------------------------------------------------------------
Production averaged 426,000 boe/d, an increase of 9% from
ongoing operations over the previous year, due principally to
increased volumes in North America and Colombia. The increase was
partially offset by lower North Sea production.
Netbacks
----------------------------------------------------------------------------
December 31 Three Months Ended Year Ended
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
Total company netback
($/boe) 33.81 34.29 37.25 31.42
----------------------------------------------------------------------------
Oil and liquids netback
($/bbl) 57.66 52.55 60.34 44.94
----------------------------------------------------------------------------
Natural gas netback ($/mcf) 2.90 3.16 3.46 3.36
----------------------------------------------------------------------------
During 2011, the company's average gross netback was $37.25/boe,
19% higher than in 2010 due primarily to higher global oil and
liquids prices.
WTI oil prices averaged $95.13/bbl for the year, up 20% from
2010. NYMEX natural gas averaged $4.07/mmbtu, compared to
$4.39/mmbtu a year ago.
Gross Proved Reserves(3) Proved
Reserves
SEC Pricing
mmboe
December 31, 2010 1,382.5
Discoveries, extensions and additions 240.7
Net acquisitions and dispositions 9.5
Price revisions 7.6
Other revisions 2.7
Production (155.4)
December 31, 2011 1,487.6
(3) The reserves data and other oil and gas information included
herein is determined in accordance with SEC standards. Reserves are
Talisman share working interest plus royalty interest before
royalties payable. Please see advisories elsewhere in this news
release.
The company increased gross proved reserves by 8% in 2011.
Talisman added 243 million boe of proved reserves (excluding price
revisions) compared to production of 155 million boe, replacing
157% of 2011 production. North America accounted for the largest
increase in reserves as a result of successful drilling programs in
the Marcellus, Montney and Eagle Ford shale plays. Price-related
revisions increased proved reserves by 8 million boe, principally
related to the company's North Sea operations.
At year-end, North America, Southeast Asia and the North Sea
accounted for 48%, 26% and 21% respectively of the company's gross
proved reserves. Proved undeveloped reserves accounted for 37% of
the company total.
North America
Production
----------------------------------------------------------------------------
December 31 Three Months Ended Year Ended
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
Shale (mmcfe/d)
----------------------------------------------------------------------------
Marcellus 486 272 413 181
----------------------------------------------------------------------------
Montney/other 56 62 56 32
----------------------------------------------------------------------------
Eagle Ford 54 8 31 4
----------------------------------------------------------------------------
Total shale (mmcfe/d) 596 342 500 217
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Conventional total (mboe/d) 88 94 90 117
----------------------------------------------------------------------------
Assets sold (mboe/d) - 8 - 27
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total NAO production
(mboe/d) 187 151 173 153
----------------------------------------------------------------------------
We are shifting our focus to the liquids-rich parts of our
portfolio. We expect to grow our liquids production in North
America from approximately 25,000 bbls/d in 2012, to over 60,000
bbls/d by 2015.
North American exploration and development spending for the year
was $2.2 billion, the majority of which was spent in the Marcellus
and Eagle Ford shale plays.
Production from ongoing operations increased by 37%, with
natural gas production increasing by 41% due principally to
successful development in the Marcellus and Eagle Ford. Shale
production doubled year over year, averaging 500 mmcfe/d.
In the Marcellus we ended the year with 10 operated rigs.
Production is expected to remain relatively flat going forward as
we reduce activity in light of low natural gas prices. The company
may reduce to as few as three rigs over the course of the year.
In the liquids-rich Eagle Ford we ended the year with 10
operated rigs. In 2012, we expect this to increase to 14 rigs.
Production is expected to at least double from approximately 30
mmcfe/d as we build out our drilling programs and secure access to
additional egress.
In the Montney, we plan to reduce our program to four rigs, from
11 in the fourth quarter of last year, primarily due to low gas
prices. We will continue our program to optimize recovery in the
thick Montney shale.
In the second quarter of the year, Talisman acquired a
significant amount of acreage in the liquids-rich Duvernay shale in
Alberta, where we now hold approximately 360,000 net acres. We
commenced a pilot program last year and plan to drill at least six
wells in 2012.
The company continued to develop its conventional assets with
exploration and development spending of more than $400 million.
This year we will focus on expanding our liquids-rich Wild River
play, as well as continuing the pilot programs in the Cardium oil
and wet gas windows.
Southeast Asia
Production
----------------------------------------------------------------------------
December 31 Three Months Ended Year Ended
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
Malaysia liquids (mbbls/d) 15 17 17 21
----------------------------------------------------------------------------
Malaysia gas (mmcf/d) 99 102 113 98
----------------------------------------------------------------------------
Malaysia total (mboe/d) 31 35 36 37
----------------------------------------------------------------------------
Indonesia liquids (mbbls/d) 11 11 10 12
----------------------------------------------------------------------------
Indonesia gas (mmcf/d) 409 367 393 387
----------------------------------------------------------------------------
Indonesia total (mboe/d) 80 72 76 76
----------------------------------------------------------------------------
Vietnam (mboe/d) 2 2 2 2
----------------------------------------------------------------------------
Australia (mboe/d) 10 3 5 4
----------------------------------------------------------------------------
Total (mboe/d) 123 112 119 119
----------------------------------------------------------------------------
Southeast Asia is a self-funding growth area with natural gas
prices averaging $9.30/mcf in 2011. The majority of our gas sales
contracts in the region are linked to oil price benchmarks. We
achieved solid delivery against production and profitability
objectives in 2011 and expect more of the same this year.
Natural gas sales totaled 506 mmcf/d, an increase of 4% year
over year as a result of improved production efficiency at PM-3 and
the startup of Jambi Merang. Overall annual oil and gas production
was flat compared to the prior year due to turnarounds, natural
declines and a one-time re-determination in 2010 of the South Angsi
field in Malaysia. Talisman's exploration and development spending
in the region was $695 million.
In Malaysia, overall annual production from ongoing operations
was unchanged year over year. In PM-3 CAA, the company focused on
optimization initiatives to support strong regional natural gas
demand, increasing gas production by 15%.
In Indonesia, fourth quarter gas production was 11% higher over
the same period last year, due to Jambi Merang producing for a full
quarter and higher uptime at Tangguh. Ongoing facilities
development at Corridor continues to secure gas production for
long-term supply contracts.
In December, the Suban field was unitized with an adjacent PSC,
reducing Talisman's share in the field from 36% to approximately
32%. This reduced year-end reserves and will impact production by
approximately 4,500 boe/d; this has been factored into 2012
guidance.
In Vietnam, production averaged 1,900 bbls/d. The Hai Su Trang
and Hai Su Den (HST/HSD) development was sanctioned in December
2011, with first production planned for the second half of
2013.
Production in Australia averaged 4,600 bbls/d, an increase of
31% over the previous year, with the commissioning of the Kitan
field completed in the fourth quarter.
North Sea
Production (mboe/d)
----------------------------------------------------------------------------
December 31 Three Months Ended Year Ended
----------------------------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
UK 64 85 71 77
----------------------------------------------------------------------------
Norway 36 54 35 54
----------------------------------------------------------------------------
Total (mboe/d) 100 139 106 131
----------------------------------------------------------------------------
We continue to invest in the North Sea to maintain the integrity
of a mature set of assets and to improve operational efficiency in
order to sustain steady production.
North Sea exploration and development spending was $1.2 billion
in 2011, focused on developments at Auk South and Auk North in the
UK, Yme in Norway and the Claymore replacement compression project
in the UK.
The region contributed $600 million for reinvestment elsewhere
in the business in a high netback environment. Production decreased
19% year over year, averaging 106,000 boe/d as a result of extended
turnarounds and natural reservoir declines.
In the UK, a planned turnaround at Claymore was extended to
complete remediation work in the third quarter; production
recommenced early in the fourth quarter. The UK Tartan platform,
which was shut down throughout the fourth quarter for
safety-related upgrades, is expected to recommence production by
the end of the first quarter of 2012.
In Norway, after the annual turnaround was completed at Rev,
issues related to the host platform delayed the restart of
production until the end of the third quarter. Natural declines
also contributed to reduced production in the year. Work to ensure
the Yme platform meets contract requirements and Norwegian
specifications continues to be behind schedule. Talisman is in
discussions with the contractor to agree the best path to improving
productivity, and completing the necessary work. We expect to be
able to define a path forward during the first quarter of 2012.
International Exploration
The major focus of the exploration program this year will be
Colombia, where we are in the process of moving discoveries in
CPO-9 and CPE-6 from the evaluation phase into commerciality. We
will continue to high grade the exploration portfolio by seeking
new organic options and rationalizing others at an earlier stage in
the cycle.
In Colombia, production averaged 13,400 boe/d in 2011. In the
Piedemonte development, two development wells were successfully
drilled with encouraging results, and two additional development
wells were spudded in the third quarter. Drilling continues, with
two rigs currently in the field.
In the heavy oil region of Colombia, a portion of CPE-6 was
converted to an Exploration and Production Contract following the
success of our stratigraphic well program. Talisman is
participating in a six-well stratigraphic/appraisal drilling
program, expected to finish in the early part of 2012. In block
CPO-9, the Akacias-1 well has produced over 325,000 boe since May
2011 on a long-term test. In the fourth quarter, the first
appraisal well on the Akacias structure was drilled and will be
tested this year. We intend to continue appraisal activity on the
field and will seek a declaration of commerciality in 2012.
In Papua New Guinea, the Stanley appraisal well confirmed the
existence of a significant gas accumulation. The Horizon-operated
Elevala-2 well that was drilling over year-end 2011 was
side-tracked and then rig released in late January 2012, with
initial gas and liquid results that are very encouraging. Talisman
remains confident in our target to successfully aggregate 2 - 4 tcf
of gas. The company is also making excellent progress to bring in a
strategic partner.
In Peru, Talisman spudded the Situche Norte-4X exploration well,
which is currently drilling. In the Kurdistan Region of northern
Iraq, the Topkhana-1 exploration well finished drilling with a
significant gas and condensate discovery, and the Kurdamir-2
exploration well was spudded. In Poland, Talisman drilled the first
exploration well of a three-well program and spudded the second
well in December. In Indonesia, Talisman drilled the Lempuk-1
deepwater well, which has been plugged and abandoned with gas
shows.
Preferred Share Dividend Declaration
The company has declared the first quarterly dividend on its
Cumulative Redeemable Rate Reset First Preferred Shares, Series 1
(the "Series 1 Preferred Shares") which were issued last December.
A dividend of C$0.3136 per Series 1 Preferred Share will be paid on
April 2, 2012 to shareholders of record at the close of business on
March 12, 2012.
Talisman Energy Inc. is a global, diversified, upstream oil and
gas company, headquartered in Canada. Talisman's three main
operating areas are North America, the North Sea and Southeast
Asia. The company also has a portfolio of international exploration
opportunities. Talisman is committed to conducting business safely,
in a socially and environmentally responsible manner, and is
included in the Dow Jones Sustainability (North America) Index.
Talisman is listed on the Toronto and New York Stock Exchanges
under the symbol TLM. Please visit our website at
www.talisman-energy.com.
Forward-Looking Information
This news release contains information that constitutes
"forward-looking information" or "forward-looking statements"
(collectively "forward-looking information") within the meaning of
applicable securities legislation. This forward-looking information
includes, among others, statements regarding: business strategy,
priorities and plans; planned spending reductions; planned capital
allocation; production and production growth; expected North
American production; planned shift to liquids in North America and
timing of such shift; planned drilling and testing in the Duvernay
shale; planned rigs in the Marcellus, Montney and Eagle Ford shale;
planned development in Wild River and continuing piloting in the
Cardium; expected first production at the HST/HSD development;
expected recommencement at the Tartan platform; expected timing of
plans for Yme; exit from some of the company's exploration areas,
divestitures in North America and reducing exposure in the North
Sea; planned rigs and drilling in Colombia and intention to seek
declaration of commerciality in the Akacias field; target
aggregation in Papua New Guinea; and other expectations, beliefs,
plans, goals, objectives, assumptions, information and statements
about possible future events, conditions, results of operations or
performance.
The factors or assumptions on which the forward-looking
information is based include: assumptions inherent in current
guidance; projected capital investment levels; the flexibility of
capital spending plans and the associated sources of funding; the
successful and timely implementation of capital projects; the
continuation of tax, royalty and regulatory regimes; ability to
obtain regulatory and partner approval; commodity price and cost
assumptions; and other risks and uncertainties described in the
filings made by the company with securities regulatory authorities.
The company believes the material factors, expectations and
assumptions reflected in the forward-looking information are
reasonable but no assurance can be given that these factors,
expectations and assumptions will prove to be correct.
Forward-looking information for periods past 2012 assumes
escalating commodity prices. Closing of any transactions will be
subject to receipt of all necessary regulatory approvals and
completion of definitive agreements.
Undue reliance should not be placed on forward-looking
information. Forward-looking information is based on current
expectations, estimates and projections that involve a number of
risks which could cause actual results to vary and in some
instances to differ materially from those anticipated by Talisman
and described in the forward-looking information contained in this
news release. The material risk factors include, but are not
limited to: the risks of the oil and gas industry, such as
operational risks in exploring for, developing and producing crude
oil and natural gas, market prices and demand and unpredictable
facilities outages; risks and uncertainties involving geology of
oil and gas deposits; uncertainty related to securing sufficient
egress and markets to meet shale gas production; the uncertainty of
reserves and resources estimates, reserves life and underlying
reservoir risk; the uncertainty of estimates and projections
relating to production, costs and expenses, including
decommissioning liabilities; risks related to capital allocation
decisions, including potential delays or changes in plans with
respect to exploration or development projects or capital
expenditures; fluctuations in oil and gas prices, foreign currency
exchange rates, interest rates and tax or royalty rates; the
outcome and effects of any future acquisitions and dispositions;
health, safety, security and environmental risks, including risks
related to the possibility of major accidents; environmental
regulatory and compliance risks, including with respect to
greenhouse gases and hydraulic fracturing; uncertainties as to the
availability and cost of credit and other financing and changes in
capital markets; risks in conducting foreign operations (for
example, civil, political and fiscal instability and corruption);
risks related to the attraction, retention and development of
personnel; changes in general economic and business conditions; the
possibility that government policies, regulations or laws may
change or governmental approvals may be delayed or withheld,
including with respect to shale gas drilling; and results of the
company's risk mitigation strategies, including insurance and any
hedging activities.
The foregoing list of risk factors is not exhaustive. Additional
information on these and other factors which could affect the
company's operations, financial results or strategy are included in
Talisman's most recent Annual Information Form. In addition,
information is available in the company's other reports on file
with Canadian securities regulatory authorities and the United
States Securities and Exchange Commission. Forward-looking
information is based on the estimates and opinions of the company's
management at the time the information is presented. The company
assumes no obligation to update forward-looking information should
circumstances or management's estimates or opinions change, except
as required by law.
Oil and Gas Information
Reserves
National Instrument 51-101 ("NI 51-101") of the Canadian
Securities Administrators imposes oil and gas disclosure standards
for Canadian public companies engaged in oil and gas activities.
Talisman has obtained an exemption from Canadian securities
regulatory authorities to permit it to provide certain disclosures
in accordance with the US disclosure standards, in addition to the
disclosure mandated by NI 51-101, in order to provide for
comparability of oil and gas disclosure with that provided by US
and other international issuers. Accordingly, the reserves data and
certain other oil and gas information included in this news release
are disclosed in accordance with US disclosure standards.
A separate exemption granted to Talisman also permits it to
disclose internally evaluated reserves data. Any reserves and
resources data contained in this news release reflects Talisman's
estimates of its reserves and resources. While Talisman annually
obtains an independent audit of a portion of its proved and
probable reserves, no independent qualified reserves evaluator or
auditor was involved in the preparation of the reserves and
resources data disclosed in this news release.
Production and Reserves Volumes
Unless otherwise stated, production volumes and reserves
estimates are stated on a company interest basis prior to the
deduction of royalties and similar payments. In the US, net
production volumes and reserve estimates are reported after the
deduction of these amounts.
Reserve Replacement
The reserves replacement ratio was calculated by dividing the
sum of yearly changes (discoveries, extensions and additions and
other revisions, before acquisitions and dispositions and excluding
price revisions) to estimated proved oil and gas reserves during
2011 by the company's production for 2011. The company uses
reserves replacement ratio as an indicator of the company's ability
to replenish annual production volumes and grow its reserves. It
should be noted that reserves replacement ratio is a statistical
indicator that has limitations. As an annual measure, the ratio is
limited because it typically varies widely, based on the extent and
timing of new discoveries, project sanctioning and property
acquisitions. Its predictive and comparative value is also limited
for the same reasons. In addition, since the ratio does not include
cost, value or timing of future production of new reserves, it
cannot be used as a measure of value creation.
Replacement Costs
In this news release, Talisman discloses a reduction in
replacement costs. Replacement costs are used by the company to
determine the cost of reserves additions in a period. Talisman's
reported replacement costs may not be comparable to similarly
titled measures used by other companies. Replacement costs may not
reflect full cycle replacement costs. Replacement costs' predictive
and comparative value is limited for the aforementioned reasons.
Replacement costs are calculated by dividing exploration and
development capital spending (including discontinued operations,
but excluding midstream) by gross proved reserves additions.
BOE Conversion
Throughout this news release, barrels of oil equivalent (boe)
are calculated at a conversion rate of six thousand cubic feet
(mcf) of natural gas for one barrel of oil (bbl). This news release
also includes references to mcf equivalents (mcfes) which are
calculated at a conversion rate of one barrel of oil to six
thousand cubic feet of gas. Boes and Mcfes may be misleading,
particularly if used in isolation. A boe conversion ratio of
6mcf:1bbl and an mcfe conversion ratio of 1bbl:6mcf are based on an
energy equivalence conversion method primarily applicable at the
burner tip and do not represent a value equivalency at the well
head.
Netbacks
Talisman also discloses netbacks for the company in this news
release. Netbacks per boe are calculated by deducting from the
sales price associated royalties, operating and transportation
costs.
US Dollars and IFRS
Dollar amounts are presented in US dollars, except where
otherwise indicated. The financial information in this news release
is presented in accordance with International Financial Reporting
Standards (IFRS). IFRS differs from generally accepted accounting
principles in the US.
Non-GAAP Financial Measures
Included in this news release are references to financial
measures commonly used in the oil and gas industry such as cash
flow, earnings from operations, capital expenditures including
exploration expensed and net debt. These terms are not defined by
IFRS. Consequently, these are referred to as non-GAAP measures.
Talisman's reported results of such measures may not be comparable
to similarly titled measures reported by other companies.
Cash Flow
$ million, except per share amounts
Three months ended Year ended
----------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
----------------------------------------------------------------------------
Cash provided by
operating activities 511 492 2,812 3,144
Changes in non-cash
working capital(1) 272 80 397 (367)
Add: Exploration
expenditure 92 142 427 374
Less: Finance costs
(cash) (51) (55) (202) (197)
----------------------------------------------------------------------------
Cash flow 824 659 3,434 2,954
----------------------------------------------------------------------------
Cash flow per share 0.81 0.65 3.36 2.90
----------------------------------------------------------------------------
Diluted cash flow per
share 0.81 0.65 3.31 2.90
----------------------------------------------------------------------------
(1) The three month period and year ended December 31, 2011
includes a provision for a doubtful account (net of tax) of $22
million.
Cash flow, as commonly used in the oil and gas industry,
represents net income before exploration costs, DD&A, future
taxes and other non-cash expenses. Cash flow is used by the company
to assess operating results between years and between peer
companies using different accounting policies. Cash flow should not
be considered an alternative to, or more meaningful than, cash
provided by operating, investing and financing activities or net
income as determined in accordance with IFRS as an indicator of the
company's performance or liquidity. Cash flow per share is cash
flow divided by the average number of common shares outstanding
during the period. Diluted cash flow per share is cash flow divided
by the diluted number of common shares outstanding during the
period. A reconciliation of cash provided by operating activities
to cash flow is provided above.
Earnings from Operations
$ million, except per share amounts
----------------------------------------------------
Three months ended Year ended
----------------------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
----------------------------------------------------------------------------
Net income (loss) (117) (350) 776 945
----------------------------------------------------------------------------
Loss (gain) on disposal
and income from assets
sold (tax adjusted) 11 (75) (141) (550)
Unrealized loss (gain)
on financial
instruments (tax
adjusted)(1) 39 64 (63) (250)
Share-based payments(tax
adjusted)(2) 35 313 (303) 279
Foreign exchange on debt
(tax adjusted) (1) - (1) -
Impairment losses (tax
adjusted) 65 126 104 158
Provision for doubtful
account (tax adjusted) 22 - 22 -
Deferred tax
adjustments(3) 60 51 210 (30)
----------------------------------------------------------------------------
Earnings from operations 114 129 604 552
----------------------------------------------------------------------------
Earnings from operations
per share 0.11 0.13 0.59 0.54
----------------------------------------------------------------------------
Diluted earnings from
operations per share 0.11 0.13 0.58 0.54
----------------------------------------------------------------------------
1. Unrealized loss (gain) on financial instruments relates to the change in
the period of the mark-to-market value of the company's outstanding
commodity derivatives that are classified as held-for-trading financial
instruments.
2. Share-based payments relate principally to the mark-to-market value of
the company's outstanding stock options and cash units at December 31.
The company uses the Black-Scholes option pricing model to estimate the
fair value of its share-based payment plans.
3. Deferred tax adjustments include deferred taxes relating to unrealized
foreign exchange gains and losses associated with the impact of
fluctuations in the Canadian dollar on foreign denominated debt,
intercompany loans and tax pool balances, as well as a remeasurement of
UK deferred tax assets and liabilities in response to a statutory rate
change.
Earnings from operations are calculated by adjusting the
company's net income (loss) per the financial statements, for
certain items of a non-operational nature, on an after tax basis.
The company uses this information to evaluate performance of core
operational activities on a comparable basis between periods.
Earnings from operations should not be considered an alternative
to, or more meaningful than, net income (loss) as determined in
accordance with IFRS as an indicator of the company's performance
or liquidity. Earnings from operations per share are earnings from
operations divided by the average number of common shares
outstanding during the period. Diluted earnings from operations per
share are earnings from operations divided by the diluted number of
common shares outstanding during the period. A reconciliation of
net income (loss) to earnings from operations is provided
above.
Capital Expenditure Including Exploration Expensed
$ million
Three months ended Year ended
------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
------------------------------------------------
Exploration, development and
other 1,287 1,095 4,303 3,566
Exploration expensed 92 142 427 374
------------------------------------------------
Capital expenditure
including exploration
expensed 1,379 1,237 4,730 3,940
------------------------------------------------
Capital expenditure including exploration expensed is calculated
by adjusting the capital expenditure per the financial statements
for exploration costs that were expensed as incurred.
Exploration and Development Expenditure Including Exploration
Expensed
$ million
Three months ended Year ended
------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
------------------------------------------------
Exploration and development 1,202 1,059 4,142 3,192
Exploration expensed 92 142 427 374
------------------------------------------------
Exploration and development
expenditure including
exploration expensed 1,294 1,201 4,569 3,566
------------------------------------------------
North America Exploration and Development Expenditure Including
Exploration Expensed
$ million
Three months ended Year ended
------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
------------------------------------------------
Exploration and development 663 595 2,155 1,700
Exploration expensed 16 7 70 52
------------------------------------------------
Exploration and development
expenditure including
exploration expensed 679 602 2,225 1,752
------------------------------------------------
North Sea Exploration and Development Expenditure Including
Exploration Expensed
$ million
Three months ended Year ended
------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
------------------------------------------------
Exploration and development 260 228 1,205 1,117
Exploration expensed 12 14 40 47
------------------------------------------------
Exploration and development
expenditure including
exploration expensed 272 242 1,245 1,164
------------------------------------------------
Southeast Asia Exploration and Development Expenditure Including
Exploration Expensed
$ million
Three months ended Year ended
------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2011 2010 2011 2010
------------------------------------------------
Exploration and development 181 154 487 442
Exploration expensed 36 53 208 116
------------------------------------------------
Exploration and development
expenditure including
exploration expensed 217 207 695 558
------------------------------------------------
Exploration and development expenditure including exploration
expensed is calculated by adjusting the exploration and development
expenditure per the financial statements for exploration costs that
were expensed as incurred.
Net Debt
$ million
December 31, December 31,
2011 2010
----------------------------------------------------------------------------
Long-term debt 4,895 4,204
Bank indebtedness 60 2
Cash and cash equivalents (474) (1,655)
----------------------------------------------------------------------------
Net debt 4,481 2,551
----------------------------------------------------------------------------
Net debt is calculated by adjusting the company's long-term debt
per the financial statements for bank indebtedness, cash and cash
equivalents. The company uses this information to assess its true
debt position and eliminate the impact of timing differences.
Talisman Energy Inc.
Highlights
(unaudited)
Three months ended Year ended
December 31 December 31
2011 2010 2011 2010
----------------------------------------------------------------------------
Financial
(millions of US$ unless
otherwise stated)
Cash flow (1) 824 659 3,434 2,954
Net income (loss) (117) (350) 776 945
Capital expenditure
including exploration
expensed (1) 1,379 1,237 4,730 3,940
Per common share (US$)
Cash flow (1) 0.81 0.65 3.36 2.90
Net income (loss) (0.11) (0.34) 0.76 0.93
----------------------------------------------------------------------------
Production
(Daily Average - Gross)
Oil and liquids (bbls/d)
North America 25,669 20,773 23,160 23,133
North Sea 90,896 120,940 97,507 113,047
Southeast Asia 38,173 33,681 34,372 38,481
Other 24,810 14,972 22,697 13,983
----------------------------------------------------------------------------
Total oil and liquids 179,548 190,366 177,736 188,644
----------------------------------------------------------------------------
Natural gas (mmcf/d)
North America 969 780 899 778
North Sea 56 109 52 104
Southeast Asia 508 469 506 485
Other 39 - 34 -
----------------------------------------------------------------------------
Total natural gas 1,572 1,358 1,491 1,367
----------------------------------------------------------------------------
Total mboe/d (2) 442 417 426 417
----------------------------------------------------------------------------
Prices
Oil and liquids (US$/bbl)
North America 78.73 62.93 75.19 62.59
North Sea 108.82 87.08 110.75 80.13
Southeast Asia 110.35 92.90 115.82 80.54
Other 103.34 97.42 110.32 82.69
----------------------------------------------------------------------------
Total oil and liquids 104.09 86.27 107.04 78.19
----------------------------------------------------------------------------
Natural gas (US$/mcf)
North America 3.41 4.37 3.93 4.79
North Sea 8.81 7.57 8.62 6.35
Southeast Asia 9.29 7.13 9.30 6.72
Other 4.22 - 4.22 -
----------------------------------------------------------------------------
Total natural gas 5.52 5.58 5.92 5.59
----------------------------------------------------------------------------
Total (US$/boe) (2) 62.00 57.60 65.35 53.80
----------------------------------------------------------------------------
(1) Cash flow, capital expenditure including exploration
expensed and cash flow per share are non-GAAP measures.
(2) Barrels of oil equivalent (boe) is calculated at a
conversion rate of six thousand cubic feet (mcf) of natural gas for
one barrel of oil.
Talisman Energy Inc.
Condensed Consolidated Balance Sheets
(unaudited)
December 31, December 31, January 1,
(millions of US$) 2011 2010 2010
----------------------------------------------------------------------------
Assets
Current
Cash and cash equivalents 474 1,655 1,628
Accounts receivable 1,550 1,287 1,216
Risk management 42 119 29
Inventories 164 144 141
Prepaid expenses 24 20 8
Assets held for sale - - 22
----------------------------------------------------------------------------
2,254 3,225 3,044
----------------------------------------------------------------------------
Other assets 101 667 74
Investments 395 121 34
Risk management 24 25 40
Goodwill 1,317 1,164 1,183
Property, plant and equipment 15,909 13,266 13,254
Exploration and evaluation assets 3,954 3,442 2,212
Deferred tax assets 272 184 147
----------------------------------------------------------------------------
21,972 18,869 16,944
----------------------------------------------------------------------------
Total assets 24,226 22,094 19,988
----------------------------------------------------------------------------
Liabilities
Current
Bank indebtedness 60 2 35
Accounts payable and accrued
liabilities 2,622 2,722 2,040
Risk management - 117 266
Income and other taxes payable 371 513 341
Current portion of long-term debt 410 359 10
Liabilities associated with assets
held for sale - - 7
----------------------------------------------------------------------------
3,463 3,713 2,699
----------------------------------------------------------------------------
Decommissioning liabilities 2,982 2,580 2,003
Other long-term obligations 346 326 316
Risk management - - 6
Long-term debt 4,485 3,845 3,601
Deferred tax liabilities 2,932 2,435 2,516
----------------------------------------------------------------------------
10,745 9,186 8,442
----------------------------------------------------------------------------
Shareholders' equity
Common shares 1,561 1,480 1,401
Preferred Shares 191 - -
Contributed surplus 186 108 117
Retained earnings 7,292 6,819 6,135
Accumulated other comprehensive income 788 788 1,194
----------------------------------------------------------------------------
10,018 9,195 8,847
----------------------------------------------------------------------------
Total liabilities and shareholders'
equity 24,226 22,094 19,988
----------------------------------------------------------------------------
Talisman Energy Inc.
Condensed Consolidated Statements of Income
(unaudited)
Three months ended Year ended
December 31 December 31
(millions of US$) 2011 2010 2011 2010
----------------------------------------------------------------------------
Revenue
Sales 2,062 1,835 8,194 6,875
Other income 20 28 78 107
----------------------------------------------------------------------------
Total revenue and other
income 2,082 1,863 8,272 6,982
----------------------------------------------------------------------------
Expenses
Operating 630 474 2,190 1,890
Transportation 57 55 216 221
General and administrative 128 102 431 371
Depreciation, depletion
and amortization 546 447 1,949 1,788
Impairment 124 211 226 301
Dry hole 68 42 241 113
Exploration 92 142 427 374
Finance costs 69 73 278 276
Share-based payments
expense (recovery) 35 236 (310) 212
(Gain) loss on held-for-
trading financial
instruments 79 124 210 (87)
(Gain) loss on asset
disposals 14 (93) (192) (520)
Other, net 118 38 161 72
----------------------------------------------------------------------------
Total expenses 1,960 1,851 5,827 5,011
----------------------------------------------------------------------------
Income before taxes 122 12 2,445 1,971
----------------------------------------------------------------------------
Taxes
Current income tax 290 438 1,441 1,136
Deferred income tax
(recovery) (51) (76) 228 (110)
----------------------------------------------------------------------------
239 362 1,669 1,026
----------------------------------------------------------------------------
Net income (loss) (117) (350) 776 945
----------------------------------------------------------------------------
Per common share (US$):
Net income (loss) (0.11) (0.34) 0.76 0.93
Diluted net income (loss) (0.11) (0.34) 0.38 0.93
----------------------------------------------------------------------------
Weighted average number of
common shares outstanding
(millions)
Basic 1,021 1,018 1,023 1,018
Diluted 1,021 1,018 1,038 1,018
----------------------------------------------------------------------------
Talisman Energy Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
Three months ended Year ended
December 31 December 31
(millions of US$) 2011 2010 2011 2010
----------------------------------------------------------------------------
Operating activities
Net income (loss) (117) (350) 776 945
Add: Finance costs (cash and
non-cash) 69 73 278 276
Dividends from equity
investments - - 9 -
Items not involving cash 809 849 2,124 1,556
----------------------------------------------------------------------------
761 572 3,187 2,777
Changes in non-cash working
capital (250) (80) (375) 367
----------------------------------------------------------------------------
Cash provided by operating
activities 511 492 2,812 3,144
----------------------------------------------------------------------------
Investing activities
Capital expenditures
Exploration, development
and other (1,287) (1,095) (4,303) (3,566)
Corporate acquisitions,
net of cash acquired - - (156) (183)
Property acquisitions (6) (904) (737) (1,340)
Proceeds of resource
property dispositions (7) 536 527 2,194
Repayment of note receivable - - 40 -
Acquisition deposit - (18) 18 (630)
Investments - - 54 -
Changes in non-cash working
capital 25 177 18 274
----------------------------------------------------------------------------
Cash used in investing
activities (1,275) (1,304) (4,539) (3,251)
----------------------------------------------------------------------------
Financing activities
Long-term debt repaid (3) - (313) (10)
Long-term debt issued 812 595 1,044 595
Common shares issued 5 43 114 55
Common shares purchased (4) (26) (94) (75)
Preferred shares issued 191 - 191 -
Finance costs (cash) (51) (55) (202) (197)
Common share dividends (139) (127) (277) (249)
Deferred credits and other (1) 10 (9) (2)
Changes in non-cash working
capital (21) 2 11 (1)
----------------------------------------------------------------------------
Cash provided by financing
activities 789 442 465 116
----------------------------------------------------------------------------
Effect of translation on
foreign currency cash and
cash equivalents (3) 10 23 51
----------------------------------------------------------------------------
Net increase (decrease) in
cash and cash equivalents 22 (360) (1,239) 60
Cash and cash equivalents
net of bank indebtedness,
beginning of period 392 2,013 1,653 1,593
----------------------------------------------------------------------------
Cash and cash equivalents
net of bank indebtedness,
end of period 414 1,653 414 1,653
----------------------------------------------------------------------------
Cash and cash equivalents 474 1,655 474 1,655
Bank indebtedness (60) (2) (60) (2)
----------------------------------------------------------------------------
Cash and cash equivalents
net of bank indebtedness,
end of period 414 1,653 414 1,653
----------------------------------------------------------------------------
Items not involving cash are
as follows:
Three months ended Year ended
December 31 December 31
(millions of US$) 2011 2010 2011 2010
----------------------------------------------------------------------------
Depreciation, depletion and
amortization 546 447 1,949 1,788
Impairment, net of reversals 124 211 226 301
Dry hole 68 42 241 113
Share-based payments expense
(recovery) 34 207 (324) 158
(Gain) loss on asset
disposals 14 (93) (192) (520)
Unrealized (gain) loss on
held-for-trading financial
instruments 40 73 (61) (258)
Deferred income tax (51) (76) 228 (110)
Foreign exchange (1) 8 (11) 3
PP&E derecognition 7 8 26 28
Other 28 22 42 53
----------------------------------------------------------------------------
809 849 2,124 1,556
----------------------------------------------------------------------------
Talisman Energy Inc.
Segmented Information
(unaudited)
North America (1) North Sea (2)
------------------------------------------------------------
Three months Three months
ended Year ended ended Year ended
December 31 December 31 December 31 December 31
------------------------------------------------------------
(millions of
US$) 2011 2010 2011 2010 2011 2010 2011 2010
----------------------------------------------------------------------------
Revenue
Sales 419 385 1,695 1,679 966 1,014 4,074 3,526
Other income 18 22 63 85 2 6 14 21
----------------------------------------------------------------------------
Total revenue
and other
income 437 407 1,758 1,764 968 1,020 4,088 3,547
----------------------------------------------------------------------------
Segmented
expenses
Operating 120 120 454 487 376 259 1,292 1,096
Transportation 19 12 68 59 22 26 84 95
DD&A 243 192 852 717 169 177 671 766
Impairment 129 91 129 116 11 99 113 164
Dry hole 2 4 6 (11) 31 5 106 70
Exploration 16 7 70 52 12 14 40 47
Other 15 3 22 (25) 83 58 105 91
----------------------------------------------------------------------------
Total segmented
expenses 544 429 1,601 1,395 704 638 2,411 2,329
----------------------------------------------------------------------------
Segmented income
(loss) before
taxes (107) (22) 157 369 264 382 1,677 1,218
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative
Finance costs
Share-based
payments
recovery
Currency
translation
(Gain) loss on
held-for-
trading
financial
instruments
(Gain) loss on
asset disposals
----------------------------------------------------------------------------
Total non-
segmented
expenses
----------------------------------------------------------------------------
Income before
taxes
----------------------------------------------------------------------------
Capital
expenditures
Exploration 30 48 198 216 23 21 128 133
Development 636 544 1,960 1,481 237 207 1,077 984
Midstream (3) 3 (3) 3 - - - -
----------------------------------------------------------------------------
Exploration and
development 663 595 2,155 1,700 260 228 1,205 1,117
----------------------------------------------------------------------------
Acquisitions
Proceeds on
dispositions
Other non-
segmented
----------------------------------------------------------------------------
Net capital
expenditures
----------------------------------------------------------------------------
Property, plant
and equipment 6,740 5,351 5,809 5,368
Exploration and
evaluation
assets 2,370 1,886 538 540
Goodwill 140 149 866 866
Other 987 2,389 645 920
----------------------------------------------------------------------------
Segmented assets 10,237 9,775 7,858 7,694
Non-segmented
assets
----------------------------------------------------------------------------
Total assets
----------------------------------------------------------------------------
Decommissioning
liabilities 394 210 2,390 2,196
----------------------------------------------------------------------------
1. North America 2011 2010 2011 2010
----------------------------------------------------------------------------
Canada 268 313 1,127 1,454
US 169 94 631 310
----------------------------------------------------------------------------
Total revenue and other
income 437 407 1,758 1,764
----------------------------------------------------------------------------
Canada 3,937 3,920
US 2,803 1,431
----------------------------------------------------------------------------
Property, plant and
equipment 6,740 5,351
----------------------------------------------------------------------------
Canada 1,207 685
US 1,163 1,201
----------------------------------------------------------------------------
Exploration and evaluation
assets 2,370 1,886
----------------------------------------------------------------------------
2. North Sea 2011 2010 2011 2010
----------------------------------------------------------------------------
UK 656 644 2,835 2,190
Norway 312 376 1,253 1,357
----------------------------------------------------------------------------
Total revenue and other
income 968 1,020 4,088 3,547
----------------------------------------------------------------------------
UK 3,927 3,763
Norway 1,882 1,605
----------------------------------------------------------------------------
Property, plant and
equipment 5,809 5,368
----------------------------------------------------------------------------
UK 210 260
Norway 328 280
----------------------------------------------------------------------------
Exploration and evaluation
assets 538 540
----------------------------------------------------------------------------
Talisman Energy Inc.
Segmented Information
(unaudited)
Southeast Asia (3) Other (4)
-------------------------------------------------------
Three months Three months
ended Year ended ended Year ended
December 31 December 31 December 31 December 31
---------------------------------------------------------
(millions of US$) 2011 2010 2011 2010 2011 2010 2011 2010
----------------------------------------------------------------------------
Revenue
Sales 528 375 1,882 1,476 149 61 543 194
Other income - - 1 1 - - - -
----------------------------------------------------------------------------
Total revenue and
other income 528 375 1,883 1,477 149 61 543 194
----------------------------------------------------------------------------
Segmented expenses
Operating 112 88 372 280 22 7 72 27
Transportation 13 16 55 60 3 1 9 7
DD&A 93 70 305 277 41 8 121 28
Impairment (16) 21 (16) 21 - - - -
Dry hole 35 27 127 31 - 6 2 23
Exploration 36 53 208 116 28 68 109 159
Other 12 (9) 17 16 9 - 29 5
----------------------------------------------------------------------------
Total segmented
expenses 285 266 1,068 801 103 90 342 249
----------------------------------------------------------------------------
Segmented income
(loss) before
taxes 243 109 815 676 46 (29) 201 (55)
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative
Finance costs
Share-based
payments expense
(recovery)
Currency
translation
(Gain) loss on
held-for-trading
financial
instruments
(Gain) loss on
asset disposals
----------------------------------------------------------------------------
Total non-segmented
expenses
----------------------------------------------------------------------------
Income before taxes
----------------------------------------------------------------------------
Capital
expenditures
Exploration 68 53 257 125 56 61 138 119
Development 113 101 230 317 42 21 157 95
Midstream - - - - - - - -
----------------------------------------------------------------------------
Exploration and
development 181 154 487 442 98 82 295 214
----------------------------------------------------------------------------
Acquisitions
Proceeds on
dispositions
Other non-segmented
----------------------------------------------------------------------------
Net capital
expenditures
----------------------------------------------------------------------------
Property, plant and
equipment 2,501 2,296 859 251
Exploration and
evaluation assets 498 627 548 389
Goodwill 149 149 162 -
Other 560 628 788 141
----------------------------------------------------------------------------
Segmented assets 3,708 3,700 2,357 781
Non-segmented
assets
----------------------------------------------------------------------------
Total assets
----------------------------------------------------------------------------
Decommissioning
liabilities 208 189 43 15
----------------------------------------------------------------------------
Talisman Energy Inc.
Segmented Information
(unaudited)
Total
--------------------------------------------------------
Three months ended Year ended
December 31 December 31
---------------------------------------------------------
(millions of US$) 2011 2010 2011 2010
----------------------------------------------------------------------------
Revenue
Sales 2,062 1,835 8,194 6,875
Other income 20 28 78 107
----------------------------------------------------------------------------
Total revenue and
other income 2,082 1,863 8,272 6,982
----------------------------------------------------------------------------
Segmented expenses
Operating 630 474 2,190 1,890
Transportation 57 55 216 221
DD&A 546 447 1,949 1,788
Impairment 124 211 226 301
Dry hole 68 42 241 113
Exploration 92 142 427 374
Other 119 52 173 87
----------------------------------------------------------------------------
Total segmented
expenses 1,636 1,423 5,422 4,774
----------------------------------------------------------------------------
Segmented income
(loss) before
taxes 446 440 2,850 2,208
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative 128 102 431 371
Finance costs 69 73 278 276
Share-based
payments expense
(recovery) 35 236 (310) 212
Currency
translation (1) (14) (12) (15)
(Gain) loss on
held-for-trading
financial
instruments 79 124 210 (87)
(Gain) loss on
asset disposals 14 (93) (192) (520)
----------------------------------------------------------------------------
Total non-segmented
expenses 324 428 405 237
----------------------------------------------------------------------------
Income before taxes 122 12 2,445 1,971
----------------------------------------------------------------------------
Capital
expenditures
Exploration 177 183 721 593
Development 1,028 873 3,424 2,877
Midstream (3) 3 (3) 3
----------------------------------------------------------------------------
Exploration and
development 1,202 1,059 4,142 3,473
----------------------------------------------------------------------------
Acquisitions (197) 898 1,319 1,530
Proceeds on
dispositions 5 (538) (569) (2,273)
Other non-segmented 82 32 159 78
----------------------------------------------------------------------------
Net capital
expenditures 1,092 1,451 5,051 2,808
----------------------------------------------------------------------------
Property, plant and
equipment 15,909 13,266
Exploration and
evaluation assets 3,954 3,442
Goodwill 1,317 1,164
Other 2,980 4,078
----------------------------------------------------------------------------
Segmented assets 24,160 21,950
Non-segmented
assets 66 144
----------------------------------------------------------------------------
Total assets 24,226 22,094
----------------------------------------------------------------------------
Decommissioning
liabilities 3,035 2,610
----------------------------------------------------------------------------
3. Southeast Asia 2011 2010 2011 2010
----------------------------------------------------------------------------
Indonesia 259 201 974 839
Malaysia 153 123 565 481
Vietnam 40 11 183 52
Australia 76 40 161 105
----------------------------------------------------------------------------
Total revenue and other
income 528 375 1,883 1,477
----------------------------------------------------------------------------
Indonesia 1,023 986
Malaysia 883 1,053
Vietnam 297 19
Papua New Guinea 47 26
Australia 251 212
----------------------------------------------------------------------------
Property, plant and
equipment 2,501 2,296
----------------------------------------------------------------------------
Indonesia 12 27
Malaysia 41 29
Vietnam 5 253
Papua New Guinea 440 318
----------------------------------------------------------------------------
Exploration and evaluation
assets 498 627
----------------------------------------------------------------------------
4. Other 2011 2010 2011 2010
----------------------------------------------------------------------------
Algeria 61 61 256 194
Colombia 88 - 287 -
----------------------------------------------------------------------------
Total revenue and other
income 149 61 543 194
----------------------------------------------------------------------------
Algeria 284 251
Colombia 575 -
----------------------------------------------------------------------------
Property, plant and
equipment 859 251
----------------------------------------------------------------------------
Colombia 75 49
Kurdistan 303 239
Peru 133 98
Other 37 3
----------------------------------------------------------------------------
Exploration and evaluation
assets 548 389
----------------------------------------------------------------------------
RESERVE ESTIMATES
The following tables sets forth Talisman's reserves as at
December 31, 2011. The reserves estimates included in these tables
were prepared using the standards of the US Securities and Exchange
Commission ("SEC"), which requires that proved and probable
reserves be estimated using existing economic conditions. The price
used for calculating reserves is an unweighted arithmetic average
of the historic first-day-of-the-month price for each month within
the completed 12-month period unless the prices are defined by
contractual obligations (excluding escalations based on future
conditions).
SEC Continuity of Gross Reserves (1,7)
Canada US UK Norway Indonesia
----------------------------------------------------------------------------
Oil and Liquids (mmbbls)
Total Proved
--------------------------------------------------
Proved reserves at
December 31, 2008 (11) 154.3 - 216.7 56.6 32.4
--------------------------------------------------
Discoveries, additions and
extensions 4.8 - 5.2 1.1 (1.7)
--------------------------------------------------
Purchase of reserves 0.2 - - - 1.0
--------------------------------------------------
Sale of reserves (45.7) - (0.2) (4.0) -
--------------------------------------------------
Net revisions and
transfers - - 77.0 14.5 1.1
--------------------------------------------------
2009 Production (12.6) - (31.2) (12.3) (4.2)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2009 101.0 - 267.5 55.9 28.6
--------------------------------------------------
Discoveries, additions and
extensions 5.0 3.4 6.8 9.7 3.4
--------------------------------------------------
Purchase of reserves - 1.2 - - 3.5
--------------------------------------------------
Sale of reserves (18.5) (0.2) - - -
--------------------------------------------------
Net revisions and
transfers 0.2 - 18.0 1.8 0.9
--------------------------------------------------
2010 Production (8.4) (0.1) (27.0) (14.2) (4.3)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2010 79.3 4.3 265.3 53.2 32.1
--------------------------------------------------
Discoveries, additions and
extensions 3.1 18.3 (4.2) 2.3 1.0
--------------------------------------------------
Purchase of reserves - 0.7 - - -
--------------------------------------------------
Sale of reserves (0.3) - - - -
--------------------------------------------------
Net revisions and
transfers (1.7) 0.6 10.7 7.2 (0.2)
--------------------------------------------------
2011 Production (7.7) (0.8) (25.5) (10.0) (4.0)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2011 72.7 23.1 246.3 52.7 28.9
----------------------------------------------------------------------------
Proved developed
--------------------------------------------------
December 31, 2008 (11) 143.4 - 173.3 24.8 26.0
--------------------------------------------------
December 31, 2009 92.6 - 197.1 26.1 23.2
--------------------------------------------------
December 31, 2010 74.6 0.9 211.9 21.6 21.4
--------------------------------------------------
December 31, 2011 70.3 9.7 203.1 17.0 20.0
----------------------------------------------------------------------------
SEC Continuity of Gross Reserves (1,7)
Other
Southeast Latin
Asia America Other Total
---------------------------------------------------------------------------
Oil and Liquids (mmbbls)
Total Proved
-------------------------------------------------
Proved reserves at
December 31, 2008 (11) 39.4 - 45.1 544.5
-------------------------------------------------
Discoveries, additions and
extensions 7.4 - 12.2 29.0
-------------------------------------------------
Purchase of reserves - - - 1.2
-------------------------------------------------
Sale of reserves - - (3.8) (53.7)
-------------------------------------------------
Net revisions and
transfers 3.8 - (8.6) 87.8
-------------------------------------------------
2009 Production (10.7) - (5.9) (76.9)
---------------------------------------------------------------------------
Proved reserves at
December 31, 2009 39.9 - 39.0 531.9
-------------------------------------------------
Discoveries, additions and
extensions 3.0 - 2.2 33.5
-------------------------------------------------
Purchase of reserves - - - 4.7
-------------------------------------------------
Sale of reserves - - (0.7) (19.4)
-------------------------------------------------
Net revisions and
transfers 6.7 - 0.2 27.8
-------------------------------------------------
2010 Production (9.7) - (5.1) (68.8)
---------------------------------------------------------------------------
Proved reserves at
December 31, 2010 39.9 - 35.6 509.7
-------------------------------------------------
Discoveries, additions and
extensions 13.7 - 0.6 34.8
-------------------------------------------------
Purchase of reserves - 18.8 - 19.5
-------------------------------------------------
Sale of reserves - - - (0.3)
-------------------------------------------------
Net revisions and
transfers 1.1 (0.1) 1.5 19.1
-------------------------------------------------
2011 Production (8.5) (2.8) (5.5) (64.8)
---------------------------------------------------------------------------
Proved reserves at
December 31, 2011 46.2 15.9 32.2 518.0
---------------------------------------------------------------------------
Proved developed
-------------------------------------------------
December 31, 2008 (11) 24.9 - 35.2 427.6
-------------------------------------------------
December 31, 2009 31.2 - 23.7 393.9
-------------------------------------------------
December 31, 2010 30.8 - 19.6 380.8
-------------------------------------------------
December 31, 2011 31.1 8.3 19.8 379.3
---------------------------------------------------------------------------
Canada US UK Norway Indonesia
---------------------------------------------------------------------------
Natural Gas (bcf)
Total Proved
--------------------------------------------------
Proved reserves at
December 31, 2008 (11) 2,507.0 137.9 95.6 101.9 1,886.0
--------------------------------------------------
Discoveries, additions
and extensions 201.2 544.5 - (0.5) 88.6
--------------------------------------------------
Purchase of reserves 15.9 - - - 8.7
--------------------------------------------------
Sale of reserves (137.6) (1.5) (67.0) - -
--------------------------------------------------
Net revisions and
transfers (75.3) 0.1 2.9 12.7 14.8
--------------------------------------------------
2009 Production (262.7) (30.3) (7.0) (21.1) (120.6)
---------------------------------------------------------------------------
Proved reserves at
December 31, 2009 2,248.5 650.7 24.5 93.0 1,877.5
--------------------------------------------------
Discoveries, additions
and extensions 286.4 874.7 0.1 6.7 21.2
--------------------------------------------------
Purchase of reserves - 23.0 - - 60.7
--------------------------------------------------
Sale of reserves (867.3) (7.3) - - -
--------------------------------------------------
Net revisions and
transfers 33.2 12.5 4.9 12.1 (3.0)
--------------------------------------------------
2010 Production (203.6) (80.5) (5.7) (32.2) (141.2)
---------------------------------------------------------------------------
Proved reserves at
December 31, 2010 1,497.2 1,473.1 23.8 79.6 1,815.2
--------------------------------------------------
Discoveries, additions
and extensions 265.9 953.7 (0.2) 4.6 4.2
--------------------------------------------------
Purchase of reserves - 4.8 - - -
--------------------------------------------------
Sale of reserves (180.3) - - - -
--------------------------------------------------
Net revisions and
transfers (31.6) 87.3 (1.2) (1.3) (107.3)
--------------------------------------------------
2011 Production (160.0) (167.5) (3.6) (15.3) (143.4)
---------------------------------------------------------------------------
Proved reserves at
December 31, 2011 1,391.2 2,351.4 18.8 67.6 1,568.7
---------------------------------------------------------------------------
Proved developed
--------------------------------------------------
December 31, 2008 (11) 2,066.8 117.9 65.5 99.0 1,348.9
--------------------------------------------------
December 31, 2009 1,840.9 197.9 22.4 91.2 1,231.6
--------------------------------------------------
December 31, 2010 1,134.7 687.5 22.0 73.3 1,083.1
--------------------------------------------------
December 31, 2011 1,016.8 965.0 18.3 63.1 965.9
---------------------------------------------------------------------------
Other
Southeast Latin
Asia America Other Total
----------------------------------------------------------------------------
Natural Gas (bcf)
Total Proved
---------------------------------------------------
Proved reserves at
December 31, 2008 (11) 386.6 - 223.4 5,338.4
---------------------------------------------------
Discoveries, additions
and extensions 27.9 - - 861.7
---------------------------------------------------
Purchase of reserves - - - 24.6
---------------------------------------------------
Sale of reserves - - (220.5) (426.6)
---------------------------------------------------
Net revisions and
transfers (11.1) - (1.0) (56.9)
---------------------------------------------------
2009 Production (26.7) - (0.1) (468.5)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2009 376.7 - 1.8 5,272.7
---------------------------------------------------
Discoveries, additions
and extensions (37.4) - - 1,151.7
---------------------------------------------------
Purchase of reserves - - - 83.7
---------------------------------------------------
Sale of reserves - - (1.8) (876.4)
---------------------------------------------------
Net revisions and
transfers 44.6 - - 104.3
---------------------------------------------------
2010 Production (35.9) - - (499.1)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2010 348.0 - - 5,236.9
---------------------------------------------------
Discoveries, additions
and extensions 7.3 - - 1,235.5
---------------------------------------------------
Purchase of reserves - 116.9 - 121.7
---------------------------------------------------
Sale of reserves - - - (180.3)
---------------------------------------------------
Net revisions and
transfers 1.6 - - (52.5)
---------------------------------------------------
2011 Production (41.3) (12.5) - (543.6)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2011 315.6 104.4 - 5,817.7
----------------------------------------------------------------------------
Proved developed
---------------------------------------------------
December 31, 2008 (11) 199.0 - 1.2 3,898.3
---------------------------------------------------
December 31, 2009 320.8 - 0.8 3,705.6
---------------------------------------------------
December 31, 2010 281.3 - - 3,281.9
---------------------------------------------------
December 31, 2011 250.4 77.9 - 3,357.4
----------------------------------------------------------------------------
SEC Continuity of NET Reserves (1,8,9)
Canada US UK Norway Indonesia
----------------------------------------------------------------------------
Oil and Liquids (mmbbls)
Total Proved
--------------------------------------------------
Proved reserves at
December 31, 2008 (11) 131.5 - 215.4 56.6 16.1
--------------------------------------------------
Discoveries, additions and
extensions 4.0 - 5.2 1.1 (0.5)
--------------------------------------------------
Purchase of reserves 0.1 - - - 0.7
--------------------------------------------------
Sale of reserves (39.0) - (0.2) (4.0) -
--------------------------------------------------
Net revisions and
transfers 2.7 - 76.8 14.5 (1.8)
--------------------------------------------------
2009 Production (9.9) - (31.1) (12.3) (1.8)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2009 89.4 - 266.1 55.9 12.7
--------------------------------------------------
Discoveries, additions and
extensions 4.7 2.5 6.8 9.7 1.4
--------------------------------------------------
Purchase of reserves - 0.9 - - 1.5
--------------------------------------------------
Sale of reserves (15.1) (0.2) - - -
--------------------------------------------------
Net revisions and
transfers (2.4) 0.1 18.0 1.8 (0.8)
--------------------------------------------------
2010 Production (6.6) (0.1) (27.0) (14.2) (2.0)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2010 70.0 3.2 263.9 53.2 12.8
--------------------------------------------------
Discoveries, additions and
extensions 2.1 13.7 (4.1) 2.3 0.4
--------------------------------------------------
Purchase of reserves - 0.6 - - -
--------------------------------------------------
Sale of reserves (0.3) - - - -
--------------------------------------------------
Net revisions and
transfers (3.5) 0.3 10.4 7.2 4.1
--------------------------------------------------
2011 Production (6.3) (0.5) (25.2) (10.0) (1.8)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2011 62.0 17.3 245.0 52.7 15.5
----------------------------------------------------------------------------
Proved developed - -
--------------------------------------------------
December 31, 2008 (11) 122.0 - 172.0 24.8 13.5
--------------------------------------------------
December 31, 2009 82.1 - 196.0 26.1 11.0
--------------------------------------------------
December 31, 2010 65.6 0.7 210.6 21.6 8.6
--------------------------------------------------
December 31, 2011 59.9 7.3 201.9 17.0 9.9
----------------------------------------------------------------------------
SEC Continuity of NET Reserves (1,8,9)
Other
Southeast Latin
Asia America Other Total
----------------------------------------------------------------------------
Oil and Liquids (mmbbls)
Total Proved
--------------------------------------------------
Proved reserves at
December 31, 2008 (11) 27.1 - 26.3 473.0
--------------------------------------------------
Discoveries, additions and
extensions 5.3 - 6.5 21.6
--------------------------------------------------
Purchase of reserves - - - 0.8
--------------------------------------------------
Sale of reserves - - (3.7) (46.9)
--------------------------------------------------
Net revisions and
transfers 3.8 - (4.7) 91.3
--------------------------------------------------
2009 Production (7.6) - (3.4) (66.1)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2009 28.6 - 21.0 473.7
--------------------------------------------------
Discoveries, additions and
extensions 2.5 - 1.0 28.6
--------------------------------------------------
Purchase of reserves - - - 2.4
--------------------------------------------------
Sale of reserves - - (0.5) (15.8)
--------------------------------------------------
Net revisions and
transfers 0.6 - (0.2) 17.1
--------------------------------------------------
2010 Production (6.1) - (2.4) (58.4)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2010 25.6 - 18.9 447.6
--------------------------------------------------
Discoveries, additions and
extensions 9.7 - (0.9) 23.2
--------------------------------------------------
Purchase of reserves - 15.1 - 15.7
--------------------------------------------------
Sale of reserves - - - (0.3)
--------------------------------------------------
Net revisions and
transfers 0.5 - (0.1) 18.9
--------------------------------------------------
2011 Production (5.5) (2.3) (2.4) (54.0)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2011 30.3 12.8 15.5 451.1
----------------------------------------------------------------------------
Proved developed
--------------------------------------------------
December 31, 2008 (11) 17.7 20.2 370.2
--------------------------------------------------
December 31, 2009 21.2 13.0 349.4
--------------------------------------------------
December 31, 2010 18.6 9.8 335.5
--------------------------------------------------
December 31, 2011 19.0 6.7 9.0 330.7
----------------------------------------------------------------------------
Canada US UK Norway Indonesia
----------------------------------------------------------------------------
Natural Gas (bcf)
Total Proved
--------------------------------------------------
Proved reserves at
December 31, 2008 (11) 2,169.2 119.2 95.6 101.9 1,407.7
--------------------------------------------------
Discoveries, additions and
extensions 185.6 474.6 - (0.5) 62.8
--------------------------------------------------
Purchase of reserves 14.2 - - - 7.5
--------------------------------------------------
Sale of reserves (115.8) (1.4) (67.0) -
--------------------------------------------------
Net revisions and
transfers 28.2 - 2.9 12.7 (19.5)
--------------------------------------------------
2009 Production (238.4) (26.2) (7.0) (21.1) (84.4)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2009 2,043.0 566.2 24.5 93.0 1,374.1
--------------------------------------------------
Discoveries, additions and
extensions 263.7 738.6 0.1 6.7 8.1
--------------------------------------------------
Purchase of reserves - 17.5 - - 42.4
--------------------------------------------------
Sale of reserves (772.5) (5.8) - - -
--------------------------------------------------
Net revisions and
transfers 11.2 10.3 4.9 12.1 (57.2)
--------------------------------------------------
2010 Production (190.9) (68.9) (5.7) (32.2) (98.2)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2010 1,354.5 1,257.9 23.8 79.6 1,269.2
--------------------------------------------------
Discoveries, additions and
extensions 251.1 799.4 (0.2) 4.6 36.1
--------------------------------------------------
Purchase of reserves - 3.6 - - -
--------------------------------------------------
Sale of reserves (165.5) - - - -
--------------------------------------------------
Net revisions and
transfers 3.5 66.8 (1.4) (1.3) (94.1)
--------------------------------------------------
2011 Production (150.9) (141.9) (3.5) (15.3) (104.0)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2011 1,292.7 1,985.8 18.7 67.6 1,107.2
----------------------------------------------------------------------------
Proved developed - -
--------------------------------------------------
December 31, 2008 (11) 1,785.8 101.8 65.5 99.0 1,022.2
--------------------------------------------------
December 31, 2009 1,663.5 171.1 22.4 91.2 915.2
--------------------------------------------------
December 31, 2010 1,011.4 584.9 22.0 73.3 763.7
--------------------------------------------------
December 31, 2011 936.5 814.7 18.2 63.1 688.5
----------------------------------------------------------------------------
Other
Southeast Latin
Asia America Other Total
----------------------------------------------------------------------------
Natural Gas (bcf)
Total Proved
--------------------------------------------------
Proved reserves at
December 31, 2008 (11) 289.7 222.8 4,406.1
--------------------------------------------------
Discoveries, additions and
extensions 25.3 - 747.8
--------------------------------------------------
Purchase of reserves - - 21.7
--------------------------------------------------
Sale of reserves - (220.0) (404.2)
--------------------------------------------------
Net revisions and
transfers (33.3) (1.0) (10.0)
--------------------------------------------------
2009 Production (20.3) (0.1) (397.5)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2009 261.4 1.7 4,363.9
--------------------------------------------------
Discoveries, additions and
extensions (22.6) - 994.6
--------------------------------------------------
Purchase of reserves - - 59.9
--------------------------------------------------
Sale of reserves - (1.6) (779.9)
--------------------------------------------------
Net revisions and
transfers 14.3 (0.1) (4.5)
--------------------------------------------------
2010 Production (27.3) - (423.2)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2010 225.8 - 4,210.8
--------------------------------------------------
Discoveries, additions and
extensions 9.2 - - 1,100.2
--------------------------------------------------
Purchase of reserves - 93.6 - 97.2
--------------------------------------------------
Sale of reserves - - - (165.5)
--------------------------------------------------
Net revisions and
transfers (13.0) 0.1 - (39.4)
--------------------------------------------------
2011 Production (33.2) (10.2) - (459.0)
----------------------------------------------------------------------------
Proved reserves at
December 31, 2011 188.8 83.5 - 4,744.3
----------------------------------------------------------------------------
Proved developed
--------------------------------------------------
December 31, 2008 (11) 149.0 1.2 3,224.5
--------------------------------------------------
December 31, 2009 225.5 0.8 3,089.7
--------------------------------------------------
December 31, 2010 187.2 - 2,642.5
--------------------------------------------------
December 31, 2011 149.7 62.3 - 2,733.0
----------------------------------------------------------------------------
Summary of Oil and Gas Reserves
Proved Proved Total
Developed (1,2) Undeveloped (1,3) Proved (1)
-----------------------------------------------------
Year ended December Gross Net Gross Net Gross Net
31, 2011 (7) (8,9) (7) (8,9) (7) (8,9)
---------------------------------------------------------------------------
Oil and NGL (mmbls)
-----------------------------------------------------
North America
-----------------------------------------------------
Canada 70.3 59.9 2.4 2.1 72.7 62.0
-----------------------------------------------------
United States 9.7 7.3 13.4 10.0 23.1 17.3
---------------------------------------------------------------------------
North Sea
-----------------------------------------------------
UK 203.1 201.9 43.2 43.1 246.3 245.0
-----------------------------------------------------
Norway 17.0 17.0 35.7 35.7 52.7 52.7
---------------------------------------------------------------------------
Southeast Asia
-----------------------------------------------------
Indonesia 20.0 9.9 8.9 5.6 28.9 15.5
-----------------------------------------------------
Malaysia 20.5 9.8 3.3 1.5 23.8 11.3
-----------------------------------------------------
Australia 9.9 8.6 - - 9.9 8.6
-----------------------------------------------------
Vietnam 0.7 0.6 11.8 9.8 12.5 10.4
---------------------------------------------------------------------------
Latin America
-----------------------------------------------------
Colombia (10) 8.3 6.7 7.6 6.1 15.9 12.8
-----------------------------------------------------
Peru - - - - - -
---------------------------------------------------------------------------
Other
-----------------------------------------------------
Algeria 19.8 9.0 12.4 6.5 32.2 15.5
---------------------------------------------------------------------------
Total 379.3 330.7 138.7 120.4 518.0 451.1
---------------------------------------------------------------------------
Natural Gas (bcf)
-----------------------------------------------------
North America
-----------------------------------------------------
Canada 1,016.8 936.5 374.4 356.2 1,391.2 1,292.7
-----------------------------------------------------
United States 965.0 814.7 1,386.4 1,171.1 2,351.4 1,985.8
---------------------------------------------------------------------------
North Sea
-----------------------------------------------------
UK 18.3 18.2 0.5 0.5 18.8 18.7
-----------------------------------------------------
Norway 63.1 63.1 4.5 4.5 67.6 67.6
---------------------------------------------------------------------------
Southeast Asia
-----------------------------------------------------
Indonesia 965.9 688.5 602.8 418.7 1,568.7 1,107.2
-----------------------------------------------------
Malaysia 250.2 149.5 56.8 31.5 307.0 181.0
-----------------------------------------------------
Australia - - - - - -
-----------------------------------------------------
Vietnam 0.2 0.2 8.4 7.6 8.6 7.8
---------------------------------------------------------------------------
Latin America
-----------------------------------------------------
Colombia (10) 77.9 62.3 26.5 21.2 104.4 83.5
-----------------------------------------------------
Peru - - - - - -
---------------------------------------------------------------------------
Other
-----------------------------------------------------
Algeria - - - - - -
---------------------------------------------------------------------------
Total 3,357.4 2,733.0 2,460.3 2,011.3 5,817.7 4,744.3
---------------------------------------------------------------------------
Summary of Oil and Gas Reserves
Probable Probable Total
Developed (4,5) Undeveloped (4,6) Probable (4)
-------------------------------------------------------
Year ended December Gross Net Net Gross Net
31, 2011 (7) (8,9) Gross (7) (8,9) (7) (8,9)
----------------------------------------------------------------------------
Oil and NGL (mmbls)
-------------------------------------------------------
North America
-------------------------------------------------------
Canada 14.5 11.5 1.8 1.4 16.3 12.9
-------------------------------------------------------
United States 2.2 1.8 2.2 1.7 4.4 3.5
----------------------------------------------------------------------------
North Sea
-------------------------------------------------------
UK 63.9 63.5 118.8 118.7 182.7 182.2
-------------------------------------------------------
Norway 6.9 6.9 31.8 31.8 38.7 38.7
----------------------------------------------------------------------------
Southeast Asia
-------------------------------------------------------
Indonesia 1.4 0.4 9.3 6.8 10.7 7.2
-------------------------------------------------------
Malaysia 24.3 9.2 12.6 3.5 36.9 12.7
-------------------------------------------------------
Australia 4.0 3.3 0.8 0.7 4.8 4.0
-------------------------------------------------------
Vietnam 0.5 0.4 10.7 8.6 11.2 9.0
----------------------------------------------------------------------------
Latin America
-------------------------------------------------------
Colombia (10) 3.1 2.5 7.0 5.6 10.1 8.1
-------------------------------------------------------
Peru - - 21.2 20.0 21.2 20.0
----------------------------------------------------------------------------
Other
-------------------------------------------------------
Algeria 7.5 3.0 4.2 1.6 11.7 4.6
----------------------------------------------------------------------------
Total 128.3 102.5 220.4 200.4 348.7 302.9
----------------------------------------------------------------------------
Natural Gas (bcf)
-------------------------------------------------------
North America
-------------------------------------------------------
Canada 327.8 295.1 194.4 182.8 522.2 477.9
-------------------------------------------------------
United States 166.4 140.0 610.9 518.2 777.3 658.2
----------------------------------------------------------------------------
North Sea
-------------------------------------------------------
UK 8.9 8.5 133.6 133.5 142.5 142.0
-------------------------------------------------------
Norway 19.4 19.4 45.6 45.6 65.0 65.0
----------------------------------------------------------------------------
Southeast Asia
-------------------------------------------------------
Indonesia 4.7 4.0 506.4 366.7 511.1 370.7
-------------------------------------------------------
Malaysia 125.2 68.3 168.7 99.5 293.9 167.8
-------------------------------------------------------
Australia - - - - - -
-------------------------------------------------------
Vietnam 0.1 0.1 6.8 6.2 6.9 6.3
----------------------------------------------------------------------------
Latin America
-------------------------------------------------------
Colombia (10) - - - - - -
-------------------------------------------------------
Peru - - - - - -
----------------------------------------------------------------------------
Other
-------------------------------------------------------
Algeria - - - - - -
----------------------------------------------------------------------------
Total 652.5 535.4 1,666.4 1,352.5 2,318.9 1,887.9
----------------------------------------------------------------------------
1. "Proved" reserves are those quantities of oil and gas, which, by
analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economically producible - from a given date
forward, from known reservoirs and under existing economic conditions,
operating methods and government regulations, prior to the time at which
contracts providing the right to operate expire, unless evidence
indicates that renewal is reasonably certain, regardless of whether
deterministic or probabilistic methods are used for estimation.
2. "Proved Developed" reserves are those reserves that can be expected to
be recovered through existing wells with existing equipment and
operating methods or in which the cost of the required equipment is
relatively minor compared to the cost of a new well. Additional oil and
gas expected to be obtained through installed extraction equipment and
infrastructure operational at the time of the reserves estimate are
included as proved developed reserves.
3. "Proved Undeveloped" reserves are those reserves that are expected to be
recovered from new wells on undrilled acreage, or from existing wells
for which a relatively major expenditure is required for recompletion.
Inclusion of reserves on undrilled acreage is limited to those directly
offsetting development spacing areas that are reasonably certain of
production when drilled, unless evidence using reliable technology
exists that establishes reasonable certainty of economic producibility
at greater distances.
4. "Probable" reserves are those additional reserves that are less certain
to be recovered than proved reserves but which, together with proved
reserves, are as likely as not to be recovered. Probable reserves can be
assigned to areas that are structurally higher than the proved area if
these areas are in communication with the proved reservoir. Includes
reserves assigned to areas of a reservoir adjacent to proved reserves
where data control or interpretations of available data are less
certain, even if interpreted reservoir continuity of structure or
productivity does not meet the reasonable certainty criterion.
5. "Probable Developed" reserves are those reserves that are less certain
to be recovered through existing wells with existing equipment and
operating methods or in which the cost of the required equipment is
relatively minor compared to the cost of a new well. Additional oil and
gas expected to be obtained through installed extraction equipment and
infrastructure operational at the time of the reserves estimate are
included as probable developed reserves.
6. "Probable Undeveloped" reserves are those reserves that are less certain
to be recovered from new wells on undrilled acreage, or from existing
wells for which a relatively major expenditure is required for
recompletion.
7. "Gross" reserves refer to the sum of (i) working interest reserves
before deduction of royalty burdens payable, and (ii) royalty interest
reserves. The Canadian Oil and Gas Evaluation Handbook ("COGEH") refers
to this sum of reserves as "Company interest reserves". Royalty interest
reserves for Canada were approximately 0.6 mmboe (proved) and 0.2 mmboe
(probable) as at December 31, 2011. The inclusion of royalty interest
volumes in gross reserves does not conform to COGEH standards applicable
under NI 51-101.
8. "Net" reserves are the remaining reserves of Talisman, after deduction
of estimated royalty burdens and including royalty interests in the
amount set out in note 7 above.
9. Interests of various governments, other than working interests or income
taxes, are accounted for as royalties. Royalties are reflected in "net"
reserves using effective rates over the life of the contract.
10. Reserves reported under Colombia include those reserves held through
Talisman's 49% interest in Equion, which is accounted for using
proportionate consolidation, as well as those reserves attributed to
Talisman's other Colombia assets.
11. December 31, 2008 reserves are based on a single day December 31, 2008
pricing methodology.
Contacts: Talisman Energy Inc. - Media and General Inquiries
David Mann, Vice-President, Corporate & Investor Communications
(403) 237-1196 (403) 237-1210 (FAX)tlm@talisman-energy.com Talisman
Energy Inc. - Shareholder and Investor Inquiries Lyle McLeod,
Vice-President, Investor Relations 403-237-1020 (403) 237-1210
(FAX)tlm@talisman-energy.com www.talisman-energy.com
Talisman (NYSE:TLM)
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Talisman (NYSE:TLM)
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