2011 07 Corporate Presentation Web Handout

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 costs reduce Liquids options including GTL
Exploration upside to come

Key exploration drilling results to come over next 2 years
Portfolio structured for positive free cash flow over time Focus on world class execution
Talisman - three core production areas, plus high impact international exploration
Producing areas North Sea
stable production generates free cash flow
Exploration areas
European shale
North America
shale provides long-term growth
Kurdistan
Latin America
building new core area acquisition, development, and exploration
Southeast Asia
self-funded built in growth and exploration
July 2011
NYSE: TLM TSX: TLM
www.talisman-energy.com
Page 1
Diversified portfolio oil and gas mix

Geography Liquids/gas
Other North Sea Southeast Asia North America 27% 4%
Gas Shale gas Oil-linked gas Oil 28%
5%
36% 30% 9%
34% 22% 12% 11% 45% 2010 production (417 mboe/d)
28% 31%
2010 production (417 mboe/d)
39%
39%
2P reserves
2P reserves
Portfolio strategy
Base
Free cash flow to invest
North America conventional Flat for a decade at 80-90 mboe/d North Sea Flat production at 110-140 mboe/d until 2020 North America shale Liquids and leading gas plays Southeast Asia ~8% growth from known projects, self-funded
Growth
5-10% sustainable growth
Exploration
Renewal of the firm
Focus Areas Southeast Asia and Latin America Future Options Kurdistan and Poland
July 2011
NYSE: TLM TSX: TLM
Page 2
Outlook transformed dispositions/acquisitions 2008-2011

Acquisitions and entries
C$5.3 billion North America Marcellus North America Montney 70 mboe/d Eagle Ford International Percentage gas 75% Colombia PNG Kurdistan Production Countries exited 12 mboe/d Poland 5 Norway
*Acreage to be earned
Dispositions
Proceeds
Net acres
(thousand)
220 210 78
Production
4,300 9,000 400 360* 300
International
2008-2010 dispositions North America break-even

Gas price
C$/mcf Sold
Break-even range of sold properties
Retained conventional
Average
Unconventional acquired properties

4
July 2011
NYSE: TLM TSX: TLM
Page 3
Accretive dispositions
Production
C$/flowing boe
60,000
Reserves
C$/boe
20
15
40,000
10
20,000
5
1P Disposals Talisman trading multiple
2P
Increasing profitability and reserves growth

Reserve replacement costs
$/boe
50
Reserve replacement ratio

Percentage (%)
200
Total PDP
40 150
30 100 20
50 10
2009
2010
2011-2015 target
2009
2010
2011-2015 target
July 2011
NYSE: TLM TSX: TLM
Page 4
Profitability improving opex and recycle ratio

Unit operating costs
C$/boe
14
1 year recycle ratio (normalized)

Netback/replacement cost 2.5x 2.2x 2.0x
1.5x
13
1.0x 0.7x 0.5x
12
0.0x 2008 2009 2010 2008 2010
Competitive position
Production
Percentage (%)
Proved developed reserves

Percentage (%)
Netback
C$/boe
PUD percentage
Percentage (%)
100 Oil-linked gas Oil & liquids
100
36
75
Oil-linked gas Oil & liquids
75
75
Peer average
60
50
Peer average
50
27
45 25
Peer average
Peer average
25
0 Talisman
18
30
Talisman
Talisman
Talisman
July 2011
NYSE: TLM TSX: TLM
Page 5
Shale free cash flow turning point

Reinvestment ratio and decline curve
Percentage (%)
Reinvestment ratio
300
Decline curve
60
Reinvestment ratio to maintain production Decline curve

250 50
200
40
150
30
100
20
Free cash flow positive

50 10
4 Years
Cash flow and capital

$ billion 5
Analyst mean cash flow estimate $3.8B $4.6B
Capital Actual cash flow Analyst cash flow estimate
0 2009 2010 2011 2012
July 2011
NYSE: TLM TSX: TLM
Page 6
Capital expenditure
Cash capital spend
$ billion 5 Other (incl. Latin America) Exploration North Sea 4 Colombia Southeast Asia North America conventional North America shale
2 HST/HSD Conventional liquids 1 Eagle Ford Montney carry 0 2010 2011 2012
Sustainable growth
Production
mboe/d
Rest of world 5-10% Latin America
Southeast Asia
North America shale
North America conventional
North Sea
2011
2012
2013
2014
2015
July 2011
NYSE: TLM TSX: TLM
Page 7
North America leading shale portfolio

TLM land Area of operation
Industry full cycle break-even

$/mcfe 5.5
Woodford Bossier Haynesville
5.0
Montney JV Montney JV
Horn River
Fayetteville
Average working Average working interest 50% interest 50% Development/pilot Development/pilot
Quebec Utica Quebec Utica

Average working Average working interest 75% interest 75% Pilot Pilot
4.5
Marcellus (dry gas) Montney
Barnett
4.0
3.5
Marcellus Marcellus
Average working Average working interest ~80% interest ~80% Development Development
Eagle Ford
3.0
Eagle Ford Eagle Ford

Average working Average working interest ~40% interest ~40% Development Development
2.5
Source: Wood Mackenzie
North America portfolio profile

Production and unit operating costs
Percentage (%)
100
Liquids production
$/boe
10.0
mboe/d
100
75
7.5
75
50
5.0
50
25
2.5
25
0.0
2008
2011
2015
Shale production
2008
2011
2015
Opportunity
Unit operating costs Conventional production
Discontinued operations Committed projects
July 2011
NYSE: TLM TSX: TLM
Page 8
Shale running room

2010 contingent resource
tcfe 3 6 4 Marcellus (PA)
Net well locations
10
10 13 Eagle Ford Marcellus (PA) Marcellus (NY)

Note: 2010 excludes Quebec. Adjusted for Sasol JVs
Montney Farrell Creek/Cypress A JVs
Total: 46
Montney Heritage Other Montney Montney Farrell Creek/ Cypress A JVs
Other Montney (Groundbirch)
Other Montney
Opening
Purchases/farm-ins/improved performance Produced/2P/sold/expiries Sasol JV Closing
57
6 (7) (10) 46
Wells drilled to date Net drilling locations remaining
Eagle Ford
0 2,500
Talisman shale break-even

2011 remaining life of field break-even
$/mmbtu
5
2015 remaining life of field break-even

$/mmbtu
5
Range
Range
Marcellus
Eagle Ford
Montney Farrell Creek including carry
Marcellus
Eagle Ford
Montney Farrell Creek excluding carry
Note: Liquids value based on WTI $73
July 2011
NYSE: TLM TSX: TLM
Page 9
Marcellus Shale Pennsylvania
Key metrics
Net acres Net well locations OGIP/section (bcf)
Pittsburgh
223,000 1,850 40-130 6
Pennsylvania Pennsylvania
Contingent resources (tcf)

West Virginia
TLM land TLM focus area Basin Major pipelines
~$800 million capital program 2011 Average 2010 production 181 mmcf/d Expect average 2011 production 350-400 mmcf/d range Secured over 600 mmcf/d egress Full cycle break-even <$4.00/mmbtu
Marcellus Shale
Pennsylvania horizontal well type curve
mmcf/d 7 Top 5 wells (first 400 days) 250 day average (57 wells) 6 350 day average (28 wells)
Key metrics
2009
2010
2011 assumptions
~100 350-400
Net new wells on-stream Average production (mmcf/d)
22 29
99 181
Horizontal well metrics (TLM operated)

5
EUR per well (bcf)

4
3.0-7.5 2.1-5.5
~5 ~5
~5 ~4
30 day IP per well (mmcf/d)
\
6 bcf 5 bcf 4 bcf 6 bcf 5 bcf 4 bcf
Continuing strong well performance Bias toward drilling longer wells
0 0 100 200 300 400
500
600
July 2011
NYSE: TLM TSX: TLM
Page 10
Shale learning curve Marcellus example

Marcellus total D&C capex per frac stage
$ million/350 feet lateral
Marcellus EUR per well

bcfe
1.2
Complete Drill and construct
+67%
0.8 -56%
3
0.4
0.0 2008 2010
2008
2010
Eagle Ford Shale JV

JV land SM Energy acquisition land Major pipeline Sales pipeline
San Antonio
Key metrics
Net new wells on-stream Average production (mmcfe/d) Horizontal well metrics (TLM operated)
2011 assumptions
~25 55-65
Texas
EUR per well (mboe) 30 day IP per well (boe/d)
660 1,200
Oil
s uid Liq h ric
Dr
as yg
Corpus Christi
Acreage in liquids rich window, largely evaluated, >50% held by production Ramp from 4 to 10 rigs 2011, manageable land expiries
Net acres Net well locations Contingent resource
July 2011
o Pr ti ec sp
Mexico
ay rw fai ve
78,000 750 550 mmboe (~50% liquids)
Full cycle break-even <$4.00/mmbtu
NYSE: TLM TSX: TLM
Page 11
Montney Shale proven and expanding play

Key metrics
Net acres Net well locations 211,000 ~4,300 ~450 33
TLM land Basin Major pipelines
Greater Greater Cypress Cypress
Average OGIP/section (bcf)
Alberta
Contingent resources (tcfe)
Fort St. John
2011 capital program ~$100 million Farrell Creek commercial development

Accelerated value through strategic partnership
Farrell Farrell Creek Creek
Greater Greater Groundbirch Groundbirch British Columbia

Grande Prairie
Long-life resource with multiple gas monetization options, including liquids Targeting full cycle break-even <$4/mmbtu
Talisman Sasol Montney Partnership

TLM land Partnership land Basin Major pipeline Talisman Sasol Talisman Sasol Montney Montney partnership partnership Farrell Creek
1,050 260 790 9.4 52,000 2011
Joint Venture
Transaction value (C$ million) Cash (C$ million) Funding commitment (C$ million) Contingent resource (tcfe)
Cypress A
1,050 260 790 11.2 57,000 2015
Total
2,100 520 1,580 20.6 109,000
Alberta
Acreage (net acres) Start-up
Farrell Creek and Cypress A to be an integrated development area Sasols Cypress A funding commitment may be applied to Farrell Creek development Cypress A transaction closed June 2011
British Columbia
July 2011
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Page 12
Montney Shale Farrell Creek & Cypress A Sasol JV

Farrell Creek horizontal type curve
mmcfe/d
Key metrics
200 days average (5 wells) Net new wells on-stream Average production (mmcf/d)
2010
20 26
2011 assumptions
~25 50-60
10 8 6 4 2 0 0 100
Farrell Creek horizontal well metrics (TLM operated)

9 Bcf 7 Bcf 5 Bcf
EUR per well (bcf) 30 day IP per well (mmcf/d)
~6 ~6
~7 ~6
200
300
Net acres Net well locations Contingent resource (tcfe)
55,000 1,700 10.3
2011 capital program ~$800 million (gross)/~$100 million (net) Ramp from 4 rigs in 2010 to 10 in 2011 Targeting full cycle break-even <$4.00/mmbtu Secured ~500 mmcf/d egress on Spectra system
Options for North American gas development

Nymex ($/mmbtu)
Pipeline favoured
GTL & LNG favoured
2 50 60 70 80
WTI ($/bbl)
90
100
110
July 2011
NYSE: TLM TSX: TLM
Page 13
Quebec Utica Shale

TLM land Horizontal well Vertical well Basin Major pipeline Sales pipeline
Trois-Rivires Quebec
Key metrics
Net acres 756,000 Test rate (mmcfe/d) >0.6 30 day IP (mmcfe/d) 5.3 Under evaluation
St. Edouard Storage Facility Leclercville Fortierville Gentily St. Gertrude
Vertical wells Average of vertical wells Horizontal wells St. Edouard Wells 2-3
Quebec government announced an environmental review

Montreal
Canada
USA
Lease expiry tenure of 12-15 years allows sufficient time to adapt to the regulatory environment
Conventional portfolio overview

British Columbia Alberta
Monkman Monkman Ojay Ojay Cardium Cardium Wild River Wild River Sundance Sundance
TLM land Conventional gas Tight gas Liquids rich gas Oil
Area
Product
Oil/ liquids rich gas Oil
Net acres
Net well locations
Cardium oil and gas/Sundance Chauvin/ Shaunavon
194,000
950
260,000
400
Chauvin Chauvin
Ojay (Nikanassin) Tight gas Tight gas/ liquids rich gas Gas 87,000 150
Edson Heritage Edson Heritage
Wild River
90,000
1,000
Monkman
326,000
30
Shaunavon Shaunavon
Total
USA
957,000
2,530
July 2011
NYSE: TLM TSX: TLM
Page 14
Conventional portfolio production

Conventional operating efficiency
Percentage (%)
100
Production
C$/boe
12
Liquids percentage (%)

40
75 8
50
20
4 25
2008 Operating efficiency
2009 Talisman lifting costs
*Ziff Energy Group data unavailable
0 2010* Benchmark lifting costs (Ziff)
2008-2010 average Liquids
2011
2012-2014 average
Liquids opportunity
Cardium Sundance Medlodge

TLM land Competitor land Oil Liquids rich gas Gas
Average industry well metrics* EUR per well (mboe) 30 day IP per well (boe/d) N/A ~120 ~500 ~330 ~350-750 ~400-700 Net new wells on-stream
2011 assumptions Key metrics Cardium Oil

9
Cardium Wet Gas

3
Sundance Medlodge
13
Evaluating resource potential Strong Talisman infrastructure position Light sweet crude and liquids rich gas
Cardium Oil
Net acres Net well locations
*Company reports, Accumap
Cardium Wet Gas

45,000 90
Sundance Medlodge
35,000 370
114,000 490
July 2011
NYSE: TLM TSX: TLM
Page 15
Wild River
2011 assumptions
8
TLM land Wild River area Gas pipeline Deep cut plant
Key Metrics
Net new wells on-stream Well metrics (TLM operated) EUR per well (mboe) 30 day IP per well (mboe/d)
2009
2010
250 280
450 380
450 380
Wild River liquids yield bbl/mmcf

75
50
25
Net acres Net well locations
90,000 1,000
Current
Deep Cut Plant
Southeast Asia near-term growth projects

Vietnam
PM-3 CAA IOR PM-3 CAA IOR
HST/HSD HST/HSD
Jambi Merang Jambi Merang
Malaysia Corridor Corridor Papua New Guinea
OK OK
Indonesia
Stanley Stanley Kitan Kitan Timor Leste Km 0 500 1,000 1,500 Australia
July 2011
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Page 16
Near-term projects underpin production growth

Southeast Asia production
mboe/d 200 Development Base ~8%
100
Key development projects Corridor additional gas sales Jambi Merang PM-3 CAA IOR PM-3 CAA infill drilling HST/HSD Kitan
0 2008
729 731
2009
593 644
2010
559 769
2011 CAPEX ($ million) Cash flow ($ million)
2012
2013
2014
2015
Indonesia South Sumatra core area

Gas to Singapore
Gas to Duri
TLM block Gas pipeline
Indonesia gas price trend

$/mcf
6
Average domestic gas purchase

5 development wells 5 development wells Facilities Facilities
Corridor Corridor
Infill drilling Infill drilling Dayung facilities upgrade Dayung facilities upgrade Sumpal expansion Sumpal expansion LTRO LTRO Suban Phases 2 & 3 Suban Phases 2 & 3
2005
2006
2007
2008
2009
2010
South Sumatra
OK Block OK Block
Infill wells Infill wells

Gas to Java
Strategic core area 2P reserves of 369 mmboe Infrastructure in place Gas price underpinned by demand Demonstrated execution
July 2011
NYSE: TLM TSX: TLM
Page 17
Corridor a major cash generator for Southeast Asia

1Q 2011 price realization and netbacks
$/mcf
Largest gas producing property in Talismans portfolio

1 bcf/d (gross) sales gas 4.3 tcfe (gross) committed to gas contracts 1.2 tcfe (gross) waiting to be monetized Further upside Majority of production linked to oil price
$9.41
$3.09 $0.76
$5.55
Realized price
Royalties
Opex/ transportation
TLM Southeast Asia netback
Technical unitization agreed in 2010

Allow further development opportunities Potential for additional gas contracts
3 wells currently producing over 600 mmcf/d (gross) Latest new well capable of 160 mmcf/d (gross)
Jambi Merang a high quality acquisition

TLM block TLM non-focus block Past well Prospect/lead Gas pipeline Oil field Gas field Production
mboe/d
South Sumatra
12
Gas to Singapore and Duri
0
2011 2012 2013 2014 2015

Gas to Java
Strategically located next to key infrastructure 2P reserves of 28 mmboe at cost of $8.15/boe Fast track development Leveraging premium domestic market Potential for significant upside
July 2011
NYSE: TLM TSX: TLM
Page 18
PM-3 CAA stable production base with near-term growth

TLM block Vietnam
Song Doc
Production
mboe/d
50
Prospect/lead Oil pipeline Gas pipeline Oil field Gas field
Development
40 30 20
Malaysia
Base
PM-3 CAA PM-3 CAA
10 0
2008 2009 2010 2011
2015
Stable and reliable production base Substantial cash flow Further organic growth through incremental oil recovery projects
Vietnam Block 15-2 HST/HSD development

HSD HSD
TLM block Multiphase production Gas lift Water injection Gas export Oil field
Hai Su Trang (HST)

Underpins development in Block 15-2 Clastic reservoir Initial development with 3 producers and 1 injector
HST HST
TGT TGT FPSO FPSO
Hai Su Den (HSD)

Re-sized with significant capital reduction Fractured basement reservoir Initial development on Block B with completion of 2 existing wells
Vietnam
Gas to Bach Ho Field
15-2/01
Current plan Sanction 2P reserves (mmboe) First oil Peak production (boe/d) IRR
July 2011
2011 year-end 24 2013 10,000 15,000 >30% at $75/bbl

NYSE: TLM TSX: TLM Page 19
Long-term growth from high quality exploration portfolio

TLM block Major exploration option Other exploration option LNG facility
Vietnam Nam Con Son Basin Nam Con Son Basin Sabah Sabah
Arun LNG
Malaysia
Bontang LNG
Makassar Straits Makassar Straits
Papua New Guinea Papua New Guinea

Tangguh LNG
North Sumatra
Indonesia
East Indonesia
PNG
PNG LNG JPDA
Km 0 500 1,000 1,500
Australia
Expanding exploration footprint in the region

Total land holdings
million acres (net)
20
Four-fold increase in footprint Substantial exploration position provides potential long-term growth
Vietnam Nam Con Son Basin Indonesia Makassar Straits PNG Foreland Basin
Malaysia Vietnam Indonesia

10
PNG
2008
2009
2010
Peer land holdings comparison Southeast Asia*

million acres (gross) 120 100 80 60 40 20 0
Source: Wood Mackenzie *Includes China
Continued access to acreage via regular licensing rounds Talisman is the leading IOC with largest acreage position in Southeast Asia
NOCs Talisman IOCs
July 2011
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Page 20
Vietnam Nam Con Son

Vietnam TLM block Pending Well Discovery Lead Seismic Oil field Gas field
Operated position established in underexplored eastern Nam Con Son Basin Planned seismic program in 2011 in preparation for 2012 drilling
NW
Hai Su Den
15-2/01 Hai Su Trang
Nam Con Son Basin Cuu Lon Basin
Ngoc Thach
NT-4-1X NT-4-1X Well path Well path
SE
5.2/10 5.2/10 Ngoc Thach Ngoc Thach

Lan Tray Lan Do Red Emperor
Ngoc Thach Ngoc Thach Title from Walker for seismic
133/134 133/134
Prospect Prospect
135/136 135/136
Target zone
Km 0 1 2
South Makassar large upside potential

TLM block TLM JSA block Well Discovery Prospect 3D seismic Gas field
Major deep water gas potential Drilling Lempuk-1 exploration well in Sageri PSC in 2011
Lempuk-1 prospect
Ruby Field Sultan (2009) South Mandar
Sadang
Sageri
2011 3D seismic
Lempuk-1 Lempuk-1
Massalima
South Sageri
South Makassar Basin
July 2011
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Page 21
PNG well positioned for significant resource capture

TLM block Discovery
Siphon-1 Siphon-1 Stanley-4 Stanley-4 Stanley-2 Stanley-2 Ubuntu-1 Ubuntu-1 Aiema Aiema Weimang Weimang Awapa Awapa Elevala-2 Elevala-2
Estimated 15-20 tcf (gross) unrisked prospective resource Access to 14 licenses covering >9 million net acres Aggregate 2-4 tcf (gross) Positioned to lead PNG foreland gas aggregation 3 main aggregation hubs Stanley success validates gas aggregation strategy
Well Lead Gas discovery
PNG early success at Stanley

Resource additions
tcf
5 3rd party TLM 4 Stanley/Ubuntu 2011 risked drilling program
Early condensate recovery scheme in Stanley

Early monetization Sanction end of 2011 450 bcf gas and 10 mmbbls condensate contingent resources
Drill 8-10 wells in 2011

2
Strategic partnering
1
Strong interest Value proposition increasing with each success Access to monetization expertise
Discoveries 1Q 2011 2011 drilling Further risked Opportunities (contingent discoveries program (prospective (contingent resources) Stanley/Ubuntu (prospective resources) resources) (contingent resources) resources)
Talisman blocks
3rd party blocks
July 2011
NYSE: TLM TSX: TLM
Page 22
Sabah exploration potential to grow in Malaysia

TLM block Lead Proposed seismic Oil field Gas field SB 309 SB 309
Multiple plays shallow oil potential and deep HPHT gas/condensate potential Acquiring 2,600 km2 3D seismic in 2010-2011 Drilling 2 wells in 2012
Depositional model deep and shallow potential
SB 310 SB 310
Malaysia
Miocene to Pliocene sedimentary sequence of offshore West Sabah, Malaysia HPHT gas condensate target Oil target
Southeast Asia 2010-2012 exploration activity
2010
Indonesia
Bravo Romeo
2011
South Makassar Lempuk Nam Con Son
2012
SO-A
Vietnam
Foreland
Stanley-2
Blk 5.2 Blk 5.2 Tach Anh 4 Ngoc Thach
Foreland
Stanley-4 Siphon-1 Elevala-2 Awapa-1 Weimang-1 Aiema-1
PNG
Ubuntu-1
PNG 6 well program

Sabah
Multi-well program
Malaysia
309
310
Seismic
Drilling
July 2011
NYSE: TLM TSX: TLM
Page 23
North Sea 110-140 mboe/d through 2020

Production
mboe/d
200
Dispositions Continuing operations

Yme Godwin Auk South
MonArb redevelopment Flyndre/ Cawdor Beta Grosbeak
Fulmar hub
150
Grevling
140
110
100
50
2005 2006 2007 2008 2009 2010 2011 2012
2020
North Sea operating efficiency

Operating efficiency
Percentage (%)
100
Claymore production
mboe/d
Operating efficiency
Percentage (%)
25
100
Production Operating efficiency Medium-term target 80-90%

20 75
75
15
50
50 10
66%
25
68%
69%
25 5
2008
2009
2010
2009
2010
1Q 2011
July 2011
NYSE: TLM TSX: TLM
Page 24
UK cash flow and returns

Cash flow
$ billion
1.5
Actual Forecast performance
($85/bbl)
Return on average capital employed*

Capital expenditure
Development Exploration
Percentage (%)
30
($85/bbl)
1.0
0.5 15 0.0
-0.5
-1.0
2008-2010 average
2011-2014 average
2008-2010 average
*Excludes extraordinary future tax liability charges
2011-2014 average
Production sustained by a conveyor belt of projects

Delivered in 2010 Burghley Auk North First oil October 2010 First oil November 2010
Flotta
Auk South redevelopment Flotta hub Flotta hub Burghley Burghley 2P reserves (mmboe) First oil MonArb hub MonArb hub Cayley, Cayley, Godwin, Shaw Godwin, Shaw
Aberdeen
ay rw No UK
36 2013
MonArb area redevelopment Reserve range (mmboe) First oil 41-88

(2P undeveloped-3P)
2014-2016
United Kingdom
Fulmar hub Fulmar hub Auk North, Auk North, Auk South, Auk South, Flyndre/Cawdor Flyndre/Cawdor
Flyndre/Cawdor Reserve range (mmboe) Project sanction 6-8

(2P undeveloped-3P)
2012
July 2011
NYSE: TLM TSX: TLM
Page 25
MonArb hub production growth through tie-backs

Base enhancement
Montrose Montrose Vigne Vigne
2011-2013 exploration well Discovery Prospect Oil field
Montrose 7 infill wells Maximized recovery Field life extended
Cayley Cayley Godwin Godwin Arbroath Arbroath
Development
Godwin 2012 Cayley 2015 Shaw 2015
Shaw Shaw
Exploration
North Seagull North Seagull
Aberdeen Aberdeen
Vigne Seagull and North Seagull

Seagull Seagull
Fulmar hub opportunity rich

2011-2013 exploration well Discovery Prospect Oil field
Base enhancement
Clyde 4 infill wells Maximized recovery Field life extended
Norw ay
Appleton Appleton
Development
Auk Auk North North Clyde Clyde Flyndre/ Flyndre/ Cawdor Cawdor
Auk North on-stream 2010 Auk South redevelopment 2013 Flyndre/Cawdor 2014
Auk South Auk South
Exploration
Appleton Area prospectivity
Aberdeen Aberdeen
July 2011
NYSE: TLM TSX: TLM
Page 26
Norway cash flow and returns

$ billion 1.0
($85/bbl)
Return on average capital employed

Capital expenditure
Development Exploration
Percentage (%)
10
($85/bbl)
0.5
0.0
-0.5
-1.0 2008-2010 average 2011-2014 average
2008-2010 average
2011-2014 average
Varg hub efficient development maximizes value

Base enhancement
Grevling Grevling Wildcat Wildcat
UK
Norway
FPSO
Varg Varg
4-8 infill wells Field extension with 1 well Gas production via Rev Maximized recovery Field life extended
Development
Rev Rev
Grevling tie-back Discovery of 37-50-122 mmboe (gross contingent resources) Oil tested from 3 formations
Isbjrn Isbjrn
Exploration
Isbjrn Wildcat
Future infill location Prospect Oil field Gas field
July 2011
NYSE: TLM TSX: TLM
Page 27
Yme first oil by end of fourth-quarter

Project near completion
Subsea equipment installed Drilling complete Topsides ready for installation First oil 4Q 2011 2P reserves 44 mmboe
Production from startup

Quarterly mboe/d
40
20
Topsides in Stavanger ready for installation
Acquisitions build new strategic core areas

Strategy is to sustain production at 30-50 mboe/d 2 deals in 2010 sustain production
Outsider
TLM block Well Discovery Prospect/lead

120
Resources (mmboe)
Beta
Appraisal well (2010)
Builds 2 new core areas Exploration portfolio renewal in a resource rich area Beta appraisal well tested 10 mboe/d
Exploration well (2011/2012)
Risked prospective exploration

60
Grosbeak Norway
Appraisal well (2011)
Discovery upside (C3)
Stavanger
Discoveries (2C)
July 2011
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Page 28
International Exploration portfolio focused by region
Core regions Future options
North Sea North Sea

Sustain production Sustain production
European shale European shale
Kurdistan Kurdistan
Latin America Latin America

Grow new oil Grow new oil production business production business
Southeast Asia Southeast Asia

Sustain long-term growth Sustain long-term growth through exploration through exploration
International Exploration portfolio transition

Build (2009-2010) Test (2010-2013) Renew (2011 )
Focus Deepen Exit non-core Access international shale
2011 exploration tests Kurdistan Indonesia South Makassar Early success Poland shale Colombia PNG gas
2012 exploration tests Vietnam Nam Con Son Malaysia Sabah Peru Maraon
Screening for portfolio renewal International unconventional Deep water oil
July 2011
NYSE: TLM TSX: TLM
Page 29
Focused exploration portfolio

Land position (millions of net acres) 25 20 15 10 5 5 10 15 20 25
2007
Southeast Asia Latin America North Sea Kurdistan
Future options
2011
Poland Qatar Alaska Trinidad

Exited
Tunisia Netherlands Denmark 250 200 150 100 50 50 100 150 200 250
Average prospect size (mmboe)
Diverse exploration portfolio with material potential

Prospective resources, 2010 year-end
Billion boe (unrisked)
Liquids and gas split

Hydrocarbon phase
North Sea 1 bboe
Future options 2 bboe
North Sea
Future options
Southeast Asia 5 bboe
Latin America 2 bboe
Southeast Asia
Latin America
Liquids
Gas
Total unrisked prospective resources of portfolio over 10 billion boe

NYSE: TLM TSX: TLM
Liquids represent nearly 50% of Talisman prospective resources
July 2011
Page 30
2011-2012 high impact exploration drilling

2012 Poland Szczawno Kurdistan K9 Poland Gdansk W., Braniewo S. Kurdistan Topkhana, Kurdamir-2 2011 Indonesia South Sageri Vietnam 5.2 Tach Ahn, 5.2 Ngoc Thach Malaysia Sabah 2 wells PNG multi-well program PNG 6 wells Indonesia Lempuk Colombia Offshore Mapal-1, Mapal-2 Colombia Heavy oil up to 12 wells
Future options
Southeast Asia
Latin America
Peru Situche Norte Colombia Hurn 2 and 3 appraisal wells Colombia Heavy oil up to 12 wells UK Seagull North, Seagull appraisal
North Sea
Norway Isbjrn, Beta NE, Frode, Veslemy Norway Skalle, Grosbeak, Peking Duck, Outsider 2011 2012 2,013 2,014
Latin America
TLM block Oil/gas discovery Discovery Basin
Llanos Basin
He a vy o il
Colombia Large acreage position in 20 blocks Oil prone Llanos and Putumayo basins
Hurn
Huron discovery in Foothills in 2009 Akacias discovery in Heavy Oil trend in 2010 Minimum of 10 exploration/appraisal wells planned for 2011 Peru Large acreage position in seven blocks Oil prone Maraon basin Under-explored petroleum basin
Chiriguaro
Rubiales
Colombia
Putumayo Basin
Heavy oil
Situche
Peru
Maraon Basin
Successfully appraised the Situche Central discovery in 2009 Exploration seismic and drilling activities in 2011-2012
July 2011
NYSE: TLM TSX: TLM
Page 31
Emerging exploration success Colombia

Atlantic Ocean
TLM block
Guajira
Talisman now positioned in 3 plays

1. Llanos Foothills light oil/gas condensate 2. Llanos Basin/Putumayo heavy oil
Magdalena Magdalena Fan Fan

Sino San Jacinto
Venezuela
Catatumbo
alen a Mag d
Pacific Ocean
Foothills Foothills
Llanos
3. Offshore Caribbean gas
Basin
Putumayo
Net acres
(thousand)
Colombia Heavy oil Heavy oil Brazil
Llanos Foothills/Foreland Llanos/Putumayo heavy oil Offshore Caribbean
548 4,681 153
Ecuador
Llanos and Putumayo Basins heavy oil trend showing great potential
TLM block Export terminal Oil pipeline Gas pipeline
Llanos Basin
Rubiales Field
CPO 9
CPO 12
CPE 8
Akacias-1 Akacias-1 2010 2010
CPE 6
2010-2011 2010-2011 seismic seismic acquisition acquisition
Tumaco
Putumayo Basin Putumayo Basin 3 licenses awarded 3 licenses awarded 2010 2010
Guairuro strat wells Guairuro strat wells 2010-2011 2010-2011
Colombia
CAG 6 CAG 5 PUT 9
Ecuador
Putumayo Basin
July 2011
NYSE: TLM TSX: TLM
Page 32
2010 acquisition of BP Colombia

(Ecopetrol 51%, TLM 49%)
TLM block Equin block Discovery Prospect Oil pipeline Gas pipeline Oil field Gas condensate field
Company renamed Equin Energia in January 2011 at closing 4 producing fields in Llanos Foothills 12-15 mboe/d (65% liquids) from February 2011 net to Talisman Interest in strategic infrastructure and export oil pipeline (OCENSA/ODC) 2 operated offshore Caribbean exploration licenses
Florea Florea
Hurn
Pauto Pauto Sur Sur Cusiana Cusiana Cupiagua Cupiagua Norte Norte RC-4
RC-5
Caribbean Sea
2010 heavy oil discovery Akacias CPO 9

TLM block Ecopetrol block Exploration & appraisal well Oil discovery Prospect/lead 3D seismic Oil field Fault
Castilla
Akacias-1 Akacias-1
Significant discovery at Akacias, downdip of Chichimene Field Discovery tested at 1,250 b/d heavy oil 2011-2012 program
3D seismic Humadea exploration well 4 Akacias appraisal wells
Chichimene
Humadea-1 Humadea-1
Chichimene Chichimene Field Field
Humadea
Akacias-1
View from North
July 2011
NYSE: TLM TSX: TLM
Page 33
Heavy oil discoveries in Colombia CPE 6

TLM block Stratigraphic well 3D proposed seismic Oil pipeline Oil field
2010 5 stratigraphic wells

Encountered oil in 4 of 5 stratigraphic wells with net pay of up to 30 feet
ODL
CPO 12
y av He
Quifa
2011 program
Complete 6th stratigraphic well Convert to exploration and production licence Acquire 330 km2 3D seismic Initiate further program of stratigraphic wells
nd re lt oi
Guairuro Guairuro
Rubiales Field
Area of pay
CPE 6
Colombia pipeline capacity expanding with new supply

2010 pipeline capacity
COVEAS
2013E pipeline capacity

COVEAS
OBC 450 mboe/d Cao Limn Coveas OCENSA/ODC 460 mboe/d
OCENSA/ODC 660 mboe/d MONTERREY MONTERREY Apiay-Porvenir 390 mboe/d ODL 340 mboe/d
Apiay-Porvenir 160 mboe/d
ODL 170 mboe/d
2010
460 mboe/d 330 mboe/d
South/Central Llanos export capacity Heavy oil trend to Monterrey capacity
1,100 mboe/d 730 mboe/d
2013E
July 2011
NYSE: TLM TSX: TLM
Page 34
Peru - Situche Complex, Block 64

Planned Situche Norte
TLM block 2011-2012 well Discovery Prospect/lead 3D seismic

Situche Central
Situche Central Successfully appraised in 2009 and tested in 2010 Demonstrated 1,100 ft oil column Appraisal well tested 5,200 bbls/d Light oil 37 API 80 km from Norperuano pipeline
Situche Sureste Planned
Situche Complex Situche Norte and Sureste structures identified Further upside in deeper reservoirs Exploration well in Situche Norte planned late 2011
Latin America exploration and development 2010-2012

2010
Foothills
Piedemonte
Base project expansion
2011
2012
Niscota
Hurn-2 appraisal Hurn-3 appraisal
Heavy oil
Colombia
CPO 9
Akacias discovery
Akacias 4 appraisals Humadea expl. Stratigraphic Stratigraphic Stratigraphic
CPE 6 CPO 12 CPE 8 Putumayo Offshore
Stratigraphic
Mapal-1 Situche Norte Situche Norte Situche Sureste Blocks 123/129 Blocks 123/129
Mapal-2
Peru
Northern
Seismic acquisition
Drilling program
July 2011
NYSE: TLM TSX: TLM
Page 35
Future options Kurdistan

TLM block Well Taqtaq Gas condensate discovery
Significant discovery in 2009 Proven gas condensate accumulation with indications of underlying oil leg Major oil and gas condensate potential Drilling Topkhana, Kurdamir-2 and K9 in 2011-2012
Kurdistan Kurdistan Iraq Iraq
Prospect Oil field Gas field
Kirkuk Jambor
K39 Topkhana
K9 Baranan
K44
Iran Iran
Kurdamir
Future options Poland shale

TLM block Well Shale fairway Shale thickness comparison
Feet
Braniewo S. Braniewo S. Gdansk W.. Gdansk W
2,300 1,815 1,400 1,250
Szczawno Szczawno
Poland
250
Marcellus Montney
Poland Empire State CN Tower Building
Seismic program currently underway 3 well program to commence in 3Q 2011 Leveraging North American unconventional shale expertise
www.talisman-energy.com Page 36
July 2011
NYSE: TLM TSX: TLM
Appendix
Balance sheet strengthened through transition period

Net debt
C$ billion 16
14
12
10
Marcellus & Montney Colombia
6 4.4 4
Eagle Ford Strategic exploration
2.6 2
January 1, 2008
Land and acquisitions
Disposals
Capital expenditure*
Operating cash flow
Dividends and other
December 31, 2010
*Excludes strategic land acquisitions
July 2011
NYSE: TLM TSX: TLM
Page 37
Balance sheet
Significant liquidity December 31, 2010
$ billion 10 Peer companies
Corporate debt
$ billion 5.0 Cash Net debt
6 2.5 4 Average = $3.6 billion
0 Talisman
0.0 2007 2008 2009 1Q 2011
Balance sheet leverage in line with peers

Debt to average daily production Dec 31, 2010
$ thousand/boe
Debt to PD reserves Dec 31, 2010

$/boe
30 Peer companies
12
Peer companies
20 Average = $15.1
Average = $5.78
10
0 Talisman
Talisman
July 2011
NYSE: TLM TSX: TLM
Page 38
Balance sheet no near-term maturities

Debt maturity schedule
$ million
1,250 1,225
1,000
750
700 600
500 375 400 300 250
150
50 0
2011
2015
2021
2027
Post 2034
Oil hedging update

Economic exposure to oil production
Percentage (%)
100
Unhedged Unhedged Unhedged Puts Collars
75
$90 puts Unhedged

50
$81-$93 collars $82-$94 collars $90-$148 collars

0
25
2Q 2011
2H 2011
2012
July 2011
NYSE: TLM TSX: TLM
Page 39
Sustainable base
North America conventional reserves
mmboe
400
North Sea reserves

mmboe
600
10 year production at 2010 rate

300
400
10 year production at 2010 rate
200
Projects
Chauvin/ Shaunavon
Wells
~400 ~950 ~1,000 ~150
Projects
200
Yme Auk South MonArb Infill drilling
100
Cardium/ Sundance Wild River Ojay (Nikanassin)
1P
P2
Capacity of GTL reactors increasing
Canada*
100 bbl/d
2,500 bbl/d
16,000 bbl/d
24,000 bbl/d
Sasolburg
Oryx GTL plant
Qatar
Nigeria
1980s
*Feasibility study Source: Sasol
1990s
2000s
2010s
Enhanced performance through increased volumetric conversion efficiency
July 2011
NYSE: TLM TSX: TLM
Page 40
Talisman Key Historical Data

2010 Daily production, before royalties Oil & liquids (mbbl/d) Natural gas (mmcf/d) Barrels of oil equivalent (mboe/d) Daily production, after royalties Oil & liquids (mbbl/d) Natural gas (mmcf/d) Barrels of oil equivalent (mboe/d) Proved reserves, before royalties Oil & liquids (mmbbl) Natural gas (bcf) Barrels of oil equivalent (mmboe) Drilling activity (gross wells) North America - Oil & liquids North America - Natural gas North America Total North America - Drilling success (%) International - Oil & liquids International - Natural gas International Total International - Drilling success (%) Net undeveloped land (thousands of acres) North America International Total 189 1,367 417 2009 211 1,283 425 2008 224 1,247 432 2007 241 1,265 452 2006 262 1,342 485 2005 250 1,319 470
160 1,161 353
181 1,088 362
187 992 352
203 1,017 373
220 1,091 402
216 1,043 390
510 5,237 1,383
532 5,273 1,411
545 5,338 1,434
749 5,464 1,660
767 5,403 1,667
736 5,417 1,639
65 243 308 100 57 11 68 85
5 154 159 98 59 12 71 86
138 286 424 100 73 37 110 89
128 288 416 98 73 11 84 79
194 496 690 98 65 18 83 83
171 495 666 97 51 5 56 81
6,940 29,673 36,613
9,145 26,208 35,353
9,786 16,443 26,229
9,559 12,948 22,507
7,837 11,048 18,884
5,588 13,484 19,072
July 2011
NYSE: TLM TSX: TLM
Page 41
Talisman Key Historical Data

2010 Ratios and Key Indicators (C$ millions, except per share) Cash flow Net Income Per Common Share Cash flow Net Income Exploration & development spending Acquisitions Dispositions Average Royalty Rate (%) Unit operating costs (C$/boe) Unit DD&A (C$/boe) Balance Sheet Info (C$ millions) Property, plant & equipment * Total assets Long-term debt (including current portion) Shareholders' equity Share information, adjusted to reflect stock splits Average common shares outstanding (millions) TSX trading info Average daily trading volume (thousands) High (C$) Low (C$) Close (C$) NYSE trading info Average daily trading volume (thousands) High (US$) Low (US$) Close (US$) Commodity Information WTI (average US$/bbl) NYMEX gas (average US$/mmbtu) US$/C$ exchange rate (year end) 3,058 648 3.00 0.64 3,953 1,562 2,347 16 12.80 15.21 2009 3,961 437 3.90 0.43 4,245 438 2,772 15 12.91 17.36 2008 6,163 3,519 6.06 3.46 5,106 452 442 18 13.57 16.44 2007 4,327 2,078 4.19 2.01 4,449 317 1,477 17 12.14 14.74 2006 4,748 2,005 4.35 1.84 4,578 204 872 17 9.98 12.22 2005 4,672 1,561 4.23 1.41 3,179 3,170 22 17 8.41 10.88
18,804 24,193 4,181 10,479
16,431 23,618 3,780 11,111
18,540 24,275 3,961 11,150
16,363 21,420 4,862 7,963
16,655 21,481 4,560 7,307
13,806 18,354 4,263 5,729
1,018 5,042 22.32 15.71 22.12 3,120 22.43 14.70 22.19
1,019 4,066 20.17 9.92 19.69 3,998 19.51 7.97 18.64
1,019 3,727 24.92 8.28 12.18 4,248 25.71 6.42 9.99
1,019 2,951 22.67 16.90 18.39 2,115 22.08 15.04 18.52
1,064 3,254 24.84 16.12 19.80 2,139 21.62 14.21 16.99
1,099 3,143 20.83 10.50 20.53 1,384 18.08 8.36 17.63
79.53 4.39 1.01
61.79 4.05 0.96
99.65 8.95 0.82
72.31 6.92 1.01
66.25 7.26 0.86
56.70 8.55 0.86
Realized product pricing, before hedging activities Oil & liquids (C$/bbl) Natural gas (C$/mcf)
80.52 5.76
67.36 5.29
96.43 9.01
75.00 6.99
69.82 7.20
62.78 8.30
Please note: These figures are all prior to reporting under IFRS and US currency transition which commenced January 1, 2011. * 2009 restated for continuing operations.
July 2011
NYSE: TLM TSX: TLM
Page 42
Advisories
Forward-Looking Information This presentation 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 and potential acquisitions; planned drilling, development, redevelopment, piloting, sanctioning, appraisals, upgrades, egress and exploration; potential drilling locations; expected ROACE; number of rigs; estimated planned production and production growth, incremental production and future projects; expected production by region and resource type; net acreage to be acquired on the closing of an acquisition from SM Energy Company; remaining life of field break even; expected liquids exposure; asset life, costs and returns; planned capital expenditures and program; expected timing of the international exploration portfolio transition; expected pipeline capacity in Colombia; expected net production resulting from the acquisition of BP Colombia; the exploration and development plans for Latin America and Southeast Asia; the 2011 plans for Akacias CPO 9 and CPE 6 in Colombia; expected prospective resource and land additions; expected shale free cash flow turning point, expected break-even costs; targeted number of wells onstream; expected development dates of Flyndre/Cawdor, Godwin, Shaw and Cayley; expected reduction to unit operating expenses; expected timing of first production and expected production from startup; expected redevelopment of Auk South; percentage of liquids production and growth; expected sustainability of production in the North Sea; remaining reserves; increases in operational efficiencies; target UK operating efficiency; expected reserves replacement costs and replacement ratio; expected extensions to field life; forecasted cash flow; expected reinvestment ratio and decline curve; planned seismic acquisition; potential cost savings; expected liquids yield of Deep Cut Plant; expected facilities improvement activities; and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. The forward-looking information included in this presentation is based on Talismans 2011 capital program. Talisman has set its 2011 capital expenditure plans assuming: (1) Talismans production in 2011 will be 510% greater than 2010, excluding the BP Colombia acquisition; (2) a WTI oil price US$75/bbl; and (3) a NYMEX natural gas price of approximately US$4/mmbtu. Talisman now believes that base production growth will be closer to 5% in 2011 excluding the BP Colombia acquisition. Information regarding business plans generally assumes that the extraction of crude oil, natural gas and natural gas liquids remains economic. Forward-looking information for periods past 2011 assumes escalating commodity prices. The Eagle Ford Shale net acres include SM Energy Company acreage to be acquired on the closing of that transaction. Closing of any transactions will be subject to customary conditions including 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 presentation. 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 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; the impact of the economy on the ability of the counterparties to the Companys commodity price derivative contracts to meet their obligations under the contracts; 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 and interest rates; the outcome and effects of any future acquisitions and dispositions; health, safety and environmental risks; uncertainties as to the availability and cost of financing and changes in capital markets; risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action); changes in general economic and business 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 foregoing list of risk factors is not exhaustive. Additional information on these and other factors which could affect the Companys operations or financial results or strategy are included in Talismans most recent Annual Information Form. In addition, information is available in the Companys other reports on file with
July 2011
NYSE: TLM TSX: TLM
Page 43
Canadian securities regulatory authorities and the United States Securities and Exchange Commission. Forward-looking information is based on the estimates and opinions of the Companys management at the time the information is presented. The Company assumes no obligation to update forward-looking information should circumstances or managements 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 presentation are disclosed in accordance with US disclosure standards. Information on the differences between the US requirements and NI 51-101 requirements is set forth under the heading Note Regarding Reserves Data and Other Oil and Gas Information in Talismans most recent Annual Information Form. A separate exemption granted to Talisman also permits it to disclose internally evaluated reserves data. Any reserves and resources data contained in this presentation reflects Talismans 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 presentation. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. In this presentation, Talisman discloses reserves replacement costs (for ease of reference, referred to as replacement costs in this advisory). Replacement costs are used by the Company to determine the cost of reserves additions in a particular time period. Talismans 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 comparable 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 proved reserve additions. Further information regarding replacement costs which is required by NI 51-101 can be found on Talisman's website at www.talisman-energy.com. The reserves replacement ratio was calculated by dividing the sum of yearly changes (additions, discoveries and non-price revisions) to estimated proved oil and gas reserves by the Company's production for that year. The Company uses reserves replacement ratios as an indictor 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. 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, except for the Corridor well production 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 of Net Proved Reserves in Talismans most recent Annual Information Form for a statement of Talismans net production volumes and reserves. The use of the word gross in this presentation means a 100% interest prior to the deduction of royalties and similar payments.
July 2011
NYSE: TLM TSX: TLM
Page 44
Resources, In-place Estimates and EURs In this presentation, Talisman also discloses contingent resources, prospective resources, OGIP and EUR as at April 30, 2011. Where not otherwise indicated, the contingent and prospective resources included in this presentation are best estimates. Contingent resources are defined as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. The contingencies that prevent the resources from being classified as reserves are; lack of gas sales contract; additional testing; production and performance appraisal activities; demonstration of economic viability; facilities and egress; access to equipment and services; hydraulic fracturing technology; commodity prices and regulatory approvals. There is no certainty that it will be commercially viable to produce any portion of the resources. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. Unrisked prospective resources are not risked for chance of development or chance of discovery. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development. The reference to "prospect" on slide 57 of this presentation refers to unrisked prospective resources. Risked prospective resource means geologically risked. OGIP is defined as original gas in place and is that quantity of gas that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of gas that is estimated, as of a given date, to be contained in known accumulations, prior to production. All OGIP estimates in this presentation are discovered. There is no certainty that it will be commercially viable to produce any portion of the resources. Estimated ultimate recovery (EUR) is a term commonly used in the oil and gas industry. EUR is an estimate of the quantity of oil and gas that is potentially recoverable. There is no certainty that it will be commercially viable to produce any portion of the EUR amount that is contained herein. BOE Conversion Throughout this presentation, 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 presentation 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. Forecasted Cash Flow: This presentation also contains discussions of anticipated cash flow. The material assumptions used in determining estimates of cash flow are: the anticipated production volumes; estimates of realized sales prices, which are in turn driven by benchmark prices, quality differentials and the impact of exchange rates; estimated royalty rates; estimated operating expenses; estimated transportation expenses; estimated general and administrative expenses; estimated interest expense, including the level of capitalized interest; anticipated cash payments made by the Company upon surrender of outstanding stock options using the cash payment feature, which in turn is dependent on the trading level of the Companys common shares and the number of stock options surrendered or exercised; and the anticipated amount of cash income tax and petroleum revenue tax. The amount of taxes and cash payments made upon surrender of existing stock options is inherently difficult to predict. Anticipated production volumes are, in turn, based on the midpoint of the estimated production range and do not reflect the impact of any potential asset dispositions or acquisitions. The completion of any contemplated asset acquisitions or dispositions is contingent on various factors including favourable market conditions, the ability of the Company to negotiate acceptable terms of sale and receipt of any required approvals for such acquisitions or dispositions.
July 2011
NYSE: TLM TSX: TLM
Page 45
Netbacks Talisman also discloses netbacks for the Company and Southeast Asia in this presentation. 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. Financial information prior to January 1, 2011 was prepared in accordance with Canadian generally accepted accounting principles (CGAAP) then applicable to publically accountable enterprises. The financial information for 2011 is presented in accordance with International Financial Reporting Standards (IFRS). Both IFRS and CGAAP may differ from generally accepted accounting principles in the US. See the notes to Talismans Annual Consolidated Financial Statements for the significant differences between CGAAP and U.S. generally accepted accounting principles. Non-GAAP Financial Measures Included in this presentation are references to financial measures used in the oil and gas industry such as free cash flow, cash flow, net debt, ROACE and capital expenditure including exploration expensed. These terms are not defined by IFRS. Consequently, these are referred to as non-GAAP measures. Talismans reported results of free cash flow, cash flow, net debt, ROACE and capital expenditure including exploration expensed may not be comparable to similarly titled measures reported by other companies. Free Cash Flow is used by management to assess the amount of funds available for reinvestment or to reduce debt levels or return to shareholders. Free cash flow is the net of cash provided by operating, investing and financing activities before the repayment or issuance of long-term debt. Cash Flow represents net income before exploration costs, DD&A, impairment, deferred 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 Companys performance or liquidity. Net Debt is calculated by adjusting the Companys 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. ROACE (return on average capital employed) is used to measure returns realized by the Company on capital employed and is calculated for each region by dividing normalized after-tax income by average capital employed. ROACE represents total assets, less current and long-term liabilities, but excluding both long-term debt and the current portion of long term debt, all components being the average between opening and closing balance sheets. Capital expenditure including exploration expensed is calculated by adjusting the capital expenditure per the financial statements for exploration costs that were expensed as incurred. Reserves and Resources Estimates Shale: 2009: 1P 109 mmboe; 2P 203 mmboe NAO: Shale: 2010: 1P 309 mmboe; 2P 479 mmboe Southeast Asia: Block 15-2 HSD/HST: 1P 0 mmboe; 2P 24 mmboe South Sumatra Core: 1P 283 mmboe; 2P 369 mmboe Corridor Committed Gas Contracts 1P 4.3 tcfe Corridor Yet to be Monetized P2 1.2 tcfe Jambi Merang: 1P 19 mmboe; 2P 28 mmboe PNG Aggregate (gross): detail resource split shown Slide 42 UK and Norway: Auk South Redevelopment: 1P 30 mmboe; 2P 36 mmboe Flyndre/Cawdor: 1P 0 mmboe; 2P 6 mmboe; 3P 8 mmboe MonArb Redevelopment : 1P 8 mmboe; 2P 61 mmboe; 3P 92 mmboe Yme: 1P 28 mmboe; 2P 44 mmboe Grosbeak and Beta: 1C 8 mmboe; 2C 32 mmboe; 3C 54 mmboe Grevling Development: 1C 37 mmboe; 2C 50 mmboe; 3C 122 mmboe (100% working interest)
July 2011
NYSE: TLM TSX: TLM
Page 46
Notes
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Safe, profitable growth

Portfolio transition largely complete

5-10% growth into the future

Exploration upside to come

NYSE: TLM TSX: TLM

Diversified portfolio oil and gas mix

Other North Sea Southeast Asia North America 27% 4%

Gas Shale gas Oil-linked gas Oil 28%

34% 22% 12% 11% 45% 2010 production (417 mboe/d)

2010 production (417 mboe/d)

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Outlook transformed dispositions/acquisitions 2008-2011

4,300 9,000 400 360* 300

2008-2010 dispositions North America break-even

Break-even range of sold properties

Unconventional acquired properties

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1P Disposals Talisman trading multiple

Increasing profitability and reserves growth

Reserve replacement ratio

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Profitability improving opex and recycle ratio

1 year recycle ratio (normalized)

1.0x 0.7x 0.5x

0.0x 2008 2009 2010 2008 2010

Proved developed reserves

100 Oil-linked gas Oil & liquids

Oil-linked gas Oil & liquids

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Shale free cash flow turning point

Reinvestment ratio to maintain production Decline curve

Free cash flow positive

Cash flow and capital

Capital Actual cash flow Analyst cash flow estimate

0 2009 2010 2011 2012

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Rest of world 5-10% Latin America

North America shale

North America conventional

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North America leading shale portfolio

Industry full cycle break-even

Quebec Utica Quebec Utica

Eagle Ford Eagle Ford

North America portfolio profile

Unit operating costs Conventional production

Discontinued operations Committed projects

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Shale running room

Net well locations

10 13 Eagle Ford Marcellus (PA) Marcellus (NY)

Montney Farrell Creek/Cypress A JVs

Other Montney (Groundbirch)

Talisman shale break-even

2015 remaining life of field break-even

Montney Farrell Creek including carry

Montney Farrell Creek excluding carry

Note: Liquids value based on WTI $73

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Marcellus Shale Pennsylvania

223,000 1,850 40-130 6

Contingent resources (tcf)

Net new wells on-stream Average production (mmcf/d)