HispanicBusiness

"We are unlocking the net asset value (NAV) in our portfolio. We expect to sell (or joint venture) $2-3 billion of non-core assets over the next 12-18 months to unlock NAV not currently reflected in our share price. We are actively marketing our stake in both the North Duvernay shale play and parts of our Montney position.

"We are building oil and liquids momentum in 2013, which will continue into next year. Talisman has a large inventory of liquids and high netback international gas opportunities within our existing portfolio. In 2013, approximately 90% of our capital program is directed at these cash flow-generating opportunities. We plan to grow five key liquids projects - currently producing 10,000 bbls/day - to approximately 65,000 bbls/day in 2014.

"Operational excellence and capital efficiency are top priorities. We will improve all aspects of our cost structure, with the objective of increasing cash margins on every barrel we produce. A major focus will be to continue to improve drilling performance in the Eagle Ford. Significant progress has been made over the past two years and we will continue to lower costs and reduce drilling times. We are also taking steps to reduce our run rate for net general and administrative (G&A) costs by $100-150 million by the end of 2013.

"This plan is the result of an in-depth review of our strategy and business by our Board of Directors and management. I believe we now have a focused and deliberate path forward that will both unlock, and create sustainable growth in, shareholder value. We have started to reposition Talisman for future cash-flow-per-share growth on the foundation of a stronger balance sheet, better capital discipline, a more focused portfolio, and operational excellence."

In October 2012, Talisman set four strategic priorities - which are described below - along with actions and outcomes.

Priority 1 -- live within our means. We will set capital spending budgets that can be largely funded by operating cash flows. We will maintain balance sheet strength so that we are able to respond to quality investment opportunities within our core regions.

We are reducing our capital budget from $4 billion in 2012 to $3 billion in 2013 - a reduction of 25%.

Priority 2 -- focus our capital program. We will invest in projects (focused in our two core regions) that come onstream more quickly, and deliver sustainable cash flow over the longer term. We will reduce upfront capital invested in high-risk exploration.

The 2013 capital program will focus on near-term, higher netback opportunities. Exploration spending has been cut in half, and is directed primarily at proving up substantial oil potential in Colombia, Kurdistan and Asia-Pacific. Long-dated exploration spending in 2013 is expected to account for only about 5% of Talisman's total capital spend.

Priority 3 -- improve operational performance and reduce cost structure. We will do things better, faster, safer, and at lower cost. Our aim is to enhance project execution and to improve margins on every barrel we produce.

Talisman is reviewing all aspects of our cost structure. In 2013, we are taking actions to reduce G&A costs, and will continue to improve drilling performance in the Eagle Ford.

Priority 4 -- unlocking net asset value of the portfolio. Talisman's asset base includes large positions in several long-dated plays that generate little to no cash flow. We will surface value for shareholders. We will continue to high-grade our portfolio and consider divestments and joint ventures where underlying asset values are not reflected in our share price.