Market drivers of oil and natural gas prices North America natural gas Asia Pacific natural gas OPEC spare capacity bcf/d bcf/d mb/d 100 100 8 Demand Demand 75 75 21 bfc/d 6 50 50 Libya 4 25 25 Range of external…
Portfolio transition Dispositions/Acquisitions 2008-2011 Acquisitions Net acres Dispositions and entries (thousand) North America Proceeds C5.3 billion Marcellus 220 North America Montney 210 Eagle Ford 78 Production 70…
Portfolio transition 2008-2010 dispositions North America break-even Gas price C/mcf Sold 8 Break-even range of sold properties Retained 6 conventional Average Unconventional acquired properties 4 2 0…
Portfolio transition North Sea operating efficiency Operating efficiency Claymore production Operating efficiency Percentage (%) mboe/d Percentage (%) 25 100 100 Production Operating efficiency Medium-term target 80-90% 20 75…
Portfolio transition Capital efficiency Total reserve replacement cost Reserve replacement C/boe Percentage (%) 50 200 2008 2008 2010 2010 40 150 30 100 20 50 10 0 3 year 1 year 3 year 1 year Portfolio…
Portfolio transition People 2008 to date New Promoted Departed Executive 75% 15% 65% Senior 40% 60% 80% Vice-President Vice-President 40% 25% 20% Senior Manager 50% 30% 20% Total 45% 30% 20% Todays portfolio…
Todays portfolio Competitive position Production Proved developed Netback PUD percentage Percentage (%) reserves C/boe Percentage (%) Percentage (%) 100 100 36 75 Oil-linked gas Oil-linked gas Oil & liquids Oil & liquids 75…
Todays portfolio Options for gas development Nymex (/mmbtu) 10.0 Pipeline favoured 7.5 5.0 GTL & LNG favoured 2.5 50 60 70 80 90 100 110 WTI (/bbl) The future Sustainable growth Production mboe/d…
The future Sustainable base North America conventional reserves North Sea reserves mmboe mmboe 400 600 10 year production at 2010 rate 10 year production 300 at 2010 rate 400 200 Projects Wells Projects Chauvin/ 400…
The future Southeast Asia production Southeast Asia production mboe/d 200 Development Base 8% 2P Development Projects reserves (mmboe) Corridor additional gas 167 sales 100 Jambi Merang 28 PM-3 CAA IOR 35 PM-3 CAA…
The future Incremental liquids production Liquids projects mboe/d 175 Exploration Infill and other New liquids projects 140 Expansion of existing fields 105 70 35 0 2011 2012 2013 2014 2015 The future…
Balance sheet strengthened through transition period Net debt C billion 16 14 12 10 8 Marcellus & Montney Colombia 6 Eagle Ford Strategic 4.4 exploration 4 2.6 2 0 January Land and Disposals Capital Operating…
Balance sheet leverage in line with peers Debt to average daily production Dec 31, 2010 Debt to PD reserves Dec 31, 2010 thousand/boe /boe 30 12 Peer companies Peer companies 20 8 Average = 15.1 Average = 5.78 10…
North America leading, returns-focused business Base North America conventional Flat for a decade at 1 Free cash flow to invest 80-90 mboe/d Growth 2 5-10% sustainable growth North America shale Liquids and leading gas…
Portfolio production Production and unit operating costs Liquids production Percentage (%) /boe mboe/d 100 10.0 100 75 7.5 75 50 5.0 50 25 2.5 25 0 0.0 0 2008 2011 2015 2008 2011 2015 Unit operating costs Shale…
Conventional portfolio overview British Alberta TLM land Net well Columbia Area Product Net acres locations Conventional gas Tight gas Oil/ Cardium oil and Monkman Liquids rich gas liquids rich 194,000 950 Monkman gas/Sundance…
Wild River 2011 TLM land Key Metrics 2009 2010 assump- Wild River area tions Gas pipeline Net new wells 4 6 8 Deep cut plant on-stream Well metrics (TLM operated) EUR per well (mboe) 250 450 450 30 day IP per well 280 380…
Leading shale portfolio TLM land Industry full cycle break-even Area of operation /mcfe 5.5 Woodford Bossier Haynesville 5.0 Montney Montney JV JV Horn River Fayetteville Average Average working working…
Shale running room 2010 contingent resource Net well locations tcfe 3 6 Marcellus (PA) 4 10 Montney Farrell 10 Creek/Cypress A JVs 13 Total: 46 Other Montney Eagle Ford Montney Heritage (Groundbirch) Marcellus (PA)…
Eagle Ford Shale JV JV land 2011 Key metrics Major pipeline assumptions Sales pipeline Net new wells on-stream 25 San Average production (mmcfe/d) 55-65 Antonio Horizontal well metrics (TLM operated) Texas EUR per well (mboe)…
Montney Shale Farrell Creek & Cypress A Sasol JV Farrell Creek horizontal type curve 2011 mmcfe/d Key metrics 2010 assumptions 10 200 days average (5 wells) Net new wells on-stream 20 25 8 Average production 26 50-60…
Options for gas development Nymex (/mmbtu) 10.0 Pipeline favoured 7.5 5.0 GTL & LNG favoured 2.5 50 60 70 80 90 100 110 WTI (/bbl) Quebec Utica Shale TLM land Quebec Key metrics Horizontal well…
Shale learning curve Marcellus example Marcellus total D&C capex per frac stage Marcellus EUR per well million/350 feet lateral bcfe 1.2 Complete 5 Drill and construct 4 +67% 0.8 -56% 3 2 0.4 1 0.0 0 2008…
New technology Multilateral Real Time Operations Center Testing multilateral completions in Reduction of non-productive time a high pressure setting Drilling program optimization Potential D&C cost savings up Safe reliable…
North America incremental production Incremental production mboe/d Shale portfolio 160 Marcellus Full cycle break-even Montney…
Southeast Asia positioned for continued profitable growth Base 1 Free cash flow to invest Growth 2 5-10% sustainable growth Southeast Asia 8% growth from known projects, self-funded Ex Exploration Southeast Asia…
Southeast Asia health, safety and environment Total recordable injury frequency (TRIF) and Number of spills (0.5 bbl) and unintentional lost time injury frequency (LTIF) hydrocarbon releases (UHR) Per million man hours 4 25 TRIF…
Talisman advantage in Southeast Asia Southeast Asia gas price trend /mcf Indonesia Singapore Malaysia 6 15 6 +8% +16% 12 +10% 4 4 9 6 2 2 3 0 0 0 2005 2010 2005 2010 2005 2010 Source: Wood Mackenzie Southeast Asia…
Near-term projects underpin production growth Southeast Asia production mboe/d 200 Development Base 8% Key development projects 100 Corridor additional gas sales Jambi Merang PM-3 CAA IOR PM-3 CAA infill drilling…
Corridor a major cash generator for Southeast Asia 1Q 2011 price realization and netbacks Largest gas producing property in /mcf Talismans portfolio 9.41 3.09 1 bcf/d (gross) sales gas 4.3 tcfe (gross) committed to gas contracts…
Jambi Merang a high quality acquisition TLM block TLM non-focus block Production mboe/d Past well Prospect/lead 12 South Sumatra Gas pipeline Oil field 8 Gas field 4 Gas to Singapore and Duri Jambi Jambi Merang…
Malaysia proven project execution PM-3 CAA Southern fields Sanction date 2000 First production 2003 Total gross cost ( million) 2,700 Total gross project EUR 310 (mmboe) PM 305/314 Sanction date Late 2003 First production…
PM-3 CAA incremental oil recovery projects Gas export IOR Phase 1 (completed in 2010) IOR IOR to Vietnam 9 new producers, 3 new injectors Phase Phase 2a2a (Kekwa) (Kekwa) 11 mmboe incremental reserves (2P) Results exceeded…
Long-term potential from high quality exploration portfolio TLM block Major exploration option Other exploration option Vietnam LNG facility Nam Nam Con Con Son Son Basin Basin Sabah Sabah Arun LNG Malaysia Bontang…
Exploration supports longer-term production growth Southeast Asia production mboe/d 250 200 Medium-term exploration 8% 150 Vietnam Nam Con Son Indonesia 100 Near-term projects Makassar Straits Andaman III block…
PNG well positioned for significant resource capture TLM block Estimated 15-20 tcf (gross) Discovery unrisked prospective resource Well Siphon-1 Siphon-1 Lead Stanley-4 Stanley-4 Access to 14 licenses covering Elevala-2…
PNG potential to deliver competitively priced gas Feed gas cost comparisons /mmbtu 3.5 By 2020, a supply gap CSG Conventional gas of 21 bcf/d emerges in 3.0 Asia Pacific 2.5 Significant competition to fill supply gap from…
Southeast Asia incremental production Incremental production mboe/d Corridor 60 Corridor Underpinned by demand PM-3 CAA Kitan 50 Jambi Merang PM-3 CAA HST/HSD Organic growth through incremental oil 40 recovery projects…
North Sea sustained oil production and significant cash flow 1 Base North Sea Flat production at 110-140 mboe/d Free cash flow to invest until 2020 Growth 2 5-10% sustainable growth Exploration 3 Renewal of the…
North Sea health, safety and environment Total recordable injury frequency (TRIF) and Number of spills (0.5 bbl) and unintentional lost time injury frequency (LTIF) hydrocarbon releases (UHR) Per million man hours 10 100 TRIF…
Cash flow and returns Cash flow Return on average capital employed* billion Capital expenditure Percentage (%) Actual Development Actual 1.5 30 Forecast performance Exploration Forecast performance (85/bbl) (85/bbl) 1.0…
Building reliability through our People Deepen operating expertise 2 new VPs of Operations Changed 25% of offshore operations leadership Tighten and align objectives Transfer 150 operations supervisor positions to staff…
Building reliability through Plant improvements Facilities improvement activities Operating efficiency secured by investment Number identified Percentage (%) Production enhancement Fulmar hub Production protection 13 15 40…
Claymore targeted investment delivers production Infrastructure upgrades increase reliability Production performance Operating efficiency mboe/d Percentage (%) Gas compression 25 100 upgrade Production Rig Operating efficiency…
Production sustained by a conveyor belt of projects Delivered in 2010 9 Burghley First oil October 2010 9 Auk North First oil November 2010 Flotta Auk South redevelopment Flotta Flotta hub hub 2P reserves No 36 rw…
Auk North delivered three months early Fulmar Fulmar 2P reserves 23 mmboe Auk Auk North North Replacement cost 15/bbl First oil November 2010 Reservoir Reservoir 8% under budget performance performance drives drives…
MonArb hub production growth through tie-backs Base enhancement 2011-2013 Montrose Montrose exploration well Montrose 7 infill wells Discovery Vigne Vigne Maximized recovery Prospect Oil field Field life extended Cayley…
MonArb hub projects extend field life Incremental resources Incremental 2P production mmboe mboe/d 200 20 Risked prospective resources New investment P3 reserves Base extension/infill 2P reserves 15 100 10 5 0…
Cash flow and returns Cash flow and capital Return on average capital employed billion Percentage (%) Capital expenditure 1.0 Actual Development 10 Actual Forecast performance Exploration Forecast performance (85/bbl) (85/bbl)…
Varg hub delivering resources and production Incremental resources Incremental production from infill drilling mmboe mboe/d 80 20 Risked prospective resources 2C resources 2P reserves 40 10 0 0 Base Infill & gas…
Gyda reducing cost and developing resources Incremental resources from future development mmboe 30 P3 2P 20 2P delivered 10 0 2011 infill well Artificial Infill Cost EOR Total Future infill well lift reduction possibilities…
North Sea capital Cash capital spend Activity (2011-2015) billion Exploration 1.5 Yme redevelopment Development MonArb hub redevelopment Godwin, Cayley and Shaw discoveries Fulmar hub 1.0 Auk South redevelopment…
North Sea summary 110-140 mboe/d sustainable to 2020 Improving operational foundations to build a highly reliable and efficient business Focus on cost and project delivery Building exploration portfolio to sustain business…
International Exploration portfolio Base 1 Free cash flow to invest Ex Growth 2 5-10% sustainable growth Exploration Focus areas Southeast Asia and Latin America 3 Renewal of the firm Future options Kurdistan and…
Leveraging Talismans global experience and expertise Unconventional shale Proven North America shale operator Currently evaluating international unconventional opportunities Foothills exploration Decades of drilling…
Focused exploration portfolio Land position (millions of net acres) 25 20 15 10 5 5 10 15 20 25 2007 2011 Southeast Asia Latin America North Sea Kurdistan Future options Poland Qatar Alaska Trinidad Exited Tunisia…
2009-2010 discoveries building the track record Future options Kurdistan K44 Kurdamir PNG Ubuntu-1 PNG Stanley-2 (appraisal) Southeast Asia Malaysia East BOD Malaysia Sliver (appraisal) Colombia Block 9 Akacias Colombia…
Talismans growing business in Colombia Colombia blocks 2006 count Niscota block award 20 Equin Heavy oil Foothills/Foreland 2008 16 Llanos heavy oil award 12 2009 8 Hurn discovery 4 Ex 2010 0 BP Colombia…
Piedemonte Complex Pauto Sur and Florea fields TLM block Equin block 9% of condensate-in-place recovered Well Niscota to end-2010 Gas injector well 2 rig program in 2011 Infill well Planning to increase gas handling Florea…
Foothills Niscota Hurn-1 discovery TLM block Equin block Hurn-1 tested 4,900 boe/d Appraisal well location 3D seismic being acquired 2011-2012 Discovery Prospect 2 appraisal wells to be drilled 3D seismic in 2011-2012 Proposed…
2010 heavy oil discovery Akacias CPO 9 TLM block Significant discovery at Akacias, Ecopetrol block Exploration & downdip of Chichimene Field appraisal well Akacias-1 Akacias-1 Oil discovery Discovery tested at 1,250 b/d…
Latin America exploration and development 2010-2012 2010 2011 2012 Foothills Piedemonte Base project expansion Niscota Hurn-2 appraisal Hurn-3 appraisal Heavy oil Colombia CPO 9 Akacias Akacias discovery 4 appraisals…
South Makassar large upside potential TLM block TLM JSA block Major deep water gas potential Well Ruby Field Discovery Sultan Prospect (2009) Drilling Lempuk-1 exploration 3D seismic Gas field well in Sageri PSC in 2011…
Sabah exploration potential to grow in Malaysia TLM block Multiple plays shallow oil potential Lead and deep HPHT gas/condensate Proposed potential seismic Oil field Acquiring 2,600 km2 3D seismic Gas field in 2010-2011 SB SB…
Future options Kurdistan TLM block Significant discovery in 2009 Well Gas condensate Taqtaq discovery Proven gas condensate Prospect Kurdistan Kurdistan accumulation with indications of Oil field Gas field underlying oil leg…
Future options Poland shale Shale thickness comparison TLM block Feet Well 2,300 Braniewo Braniewo S. S. Shale fairway Gdansk Gdansk W W.. 1,815 1,400 1,250 Szczawno Szczawno Poland 250 Marcellus Montney Poland…
International Exploration key messages 2009 goal of finding 600-700 mmboe discoveries over 5 years…
Shale free cash flow turning point Reinvestment ratio and decline curve Percentage (%) Reinvestment ratio Decline curve 300 60 Reinvestment ratio to maintain production Decline curve 250 50 200 40 150 30 100 20 Free…
Summary safe, profitable growth Portfolio transition largely complete Outlook transformed Exploration work in progress 5-10% growth into the future Sustainable due to shape of portfolio Improving profitability as replacement…
Talisman Key Historical Data 2010 2009 2008 2007 2006 2005 Daily production, before royalties Oil & liquids (mbbl/d) 189 211 224 241 262 250 Natural gas (mmcf/d) 1,367 1,283 1,247 1,265 1,342 1,319 Barrels of oil equivalent (mboe/d)…
Key Historical Data 2010 2009 2008 2007 2006 2005 Ratios and Key Indicators (C millions, except per share) Cash flow 3,058 3,961 6,163 4,327 4,748 4,672 Net Income 648 437 3,519 2,078 2,005 1,561 Per Common Share Cash flow 3.00 3.90…
conditions; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; and results of the Companys risk mitigation strategies, including insurance and any hedging activities. The…
volumes, which are stated on a gross basis, as that term is defined below. In the US, net production volumes and reserve estimates are reported after the deduction of these amounts. US readers may refer to the table headed Continuity…
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