HispanicBusiness

Talisman now has ownership in 12.15% of the Ocensa pipeline and approximately 55,000 bbls/day of capacity, plus an additional 13,900 bbls/day through Equion. Ocensa is now a profit centre for the company, generating dividends from our ownership position and marketing/capacity fees from oil transport capacity that is in short supply in the Llanos Basin. As Talisman's production from Blocks CPO-9, CPE-6, and the Niscota Block ramp up, we will have access to the export facilities on the Caribbean coast. Monetization of all or part of our Ocensa pipeline equity is also an option.

Asia-Pacific - high netback self-funded growth

Asia-Pacific is characterized by rapid economic growth supporting strong energy demand. Talisman's portfolio in the region is anchored by projects at Corridor (South Sumatra, Indonesia) and PM-3 CAA (Malay Basin, offshore Malaysia/Vietnam), which are connected to high netback natural gas markets through existing pipeline infrastructure. We have been operating in the region for 20 years and have demonstrated our operating capability with a strong track record of consistent, safe delivery. We have established close working relationships with host governments and national oil companies to take full advantage of the region's investment opportunities. The company is on track to deliver average production growth of approximately 8% per annum over the medium term, and the region is expected to contribute over $400 million annually in free cash flow to Talisman.

Total capital spending in the region is expected to be approximately $650 million, with five projects accounting for 85% of the total.

The focus of the Malay Basin is long-life production and cash flow. The PM-3 CAA fields are characterized by multiple stacked reservoirs, which offer significant opportunities for increased recoveries. In the near term, we will maintain production through infill drilling, well interventions, and continuous operations improvements. We are currently in discussion with key stakeholders with respect to an extension of the current PM-3 CAA license, with the blocks expiring in 2017 and 2018. In addition, we are looking for near-field exploration opportunities.

Talisman's acreage in the Sabah Basin provides access to low-cost discovered oil and gas reserves, with extensive infrastructure in place. In late 2012, we took over operatorship of the Kinabalu field and will seek to enhance production through workovers, development drilling, and enhanced oil recovery techniques. We hold two large exploration licenses next to Kinabalu where new 3D seismic has identified potential hydrocarbons, and two exploration wells will be drilled in 2013.

In Indonesia, the South Sumatra area includes key assets such as Corridor and Jambi Merang. At Corridor, the company has a very large natural gas reserve base. Here, we continue to invest in development opportunities, including proving up additional reserves to potentially allow sanction of another production train at the Suban field. At Jambi Merang, we will invest to maintain a high level of operating efficiency and consider expanding into the next development phase.

In Vietnam, Talisman is completing the HST/HSD field development, which is expected to come onstream in the second half of 2013 with net production expected at approximately 10,000 boe/day.

In PNG, we are continuing our gas aggregation strategy across our large land position, with potential of up to 20 tcf of undiscovered petroleum initially in place (unrisked). Our principal partner, Mitsubishi, brings funding and LNG expertise. In the near term, we will high-grade our land position to maintain quality and focus, while we execute the Stanley condensate recovery scheme with the goal of bringing on first production in late 2014 at the earliest.