Talisman Energy Budgets $5.2 Billion in Capital Spending for...

Talisman Energy Budgets $5.2 Billion in Capital Spending for 2010 Major Increase in North American Shale Drilling

CALGARY, ALBERTA--(Marketwire - Jan. 11, 2010) - Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) announced its capital spending plans for 2010. The company expects to increase spending this year, reflecting increases in shale drilling in North America and higher development spending in Southeast Asia and the North Sea. The plan also maintains the company's balance sheet strength and financial flexibility, while transitioning to long-term, profitable growth. Highlights include:

- Capital spending of $5.2 billion, an increase of greater than 10% over 2009, funded by operating cash flow, expected asset sales and Talisman's balance sheet strength. Approximately $300 million of the capital budget consists of non-cash items.

BELOW ARE THE ITEMS (FROM THE ARTICLE) RELEVANT TO PNG and NGE:

- $700 million of international exploration spending, with key wells in South America, the Middle East and Southeast Asia. We expect to drill four onshore wells in Papua New Guinea (PNG) this year, including a development well.

"Third, we will continue to build our organizational capability. Our executive team was strengthened last year with the addition of Paul Smith, Richard Herbert and Nick Walker at the executive level, as well as significant new talent across the organization, including new country managers for Malaysia and PNG. We will continue to upgrade our capabilities and processes, and develop our talent across the organization in 2010.

"Exploration activity in 2010 includes potential high-impact wells in Colombia, Peru, the Kurdistan region of northern Iraq, Indonesia and PNG. In addition, we are drilling exploration wells in Malaysia and the North Sea, including a well to appraise last year's Grevling discovery in Norway.

SOUTHEAST ASIA

Talisman plans to spend $1.1 billion in Southeast Asia in 2010, with exploration spending accounting for $280 million, or 26% of the total.

Major activities include a 16 well infill drilling program at PM-3 CAA in Malaysia/Vietnam, platform upgrades and planning for the phase 2 incremental oil recovery project.

The company is also anticipating approval for its offshore HSD/HST oilfield developments in Vietnam, with significant capital spending this year. Similarly, development of the Kitan discovery offshore Australia is also expected to start this year. The company expects to start development drilling in PNG, with an early condensate recovery scheme in one of the blocks acquired last year.

INTERNATIONAL EXPLORATION

The international exploration budget for 2010 is $700 million, with two-thirds allocated to build new core areas and one-third to support existing core areas. The goal of the program is to add 600-650 million boe of prospective resource additions over the next five years at a finding cost of less than $5/boe.

In Southeast Asia, Talisman will commence the Makassar Strait drilling program in Indonesia with two wells in the Pasangkayu block and will acquire seismic in the Andaman III block. In Malaysia, we will drill a deep exploration well in the PM-3 block and reprocess seismic over the two Sabah exploration blocks awarded in late 2009. In PNG, the company plans to acquire 1,000 kilometres of 2D seismic and drill four onshore wells.

...........................................................

Basically, TLM is acquiring 1000km of 2D seismic and drilling four onshore wells, one of which is a development well. We know that one well will almost definitley be PPL261 Well 1 (PNG) which is defined as a Key Exploration Well. One well is a development well which is a well for one of their known accumulations. That leaves 2 wells which could possibly land in NGEs tenements.

TLM will drop a development in PPL 235 (acquired from Rift)or PRL 4 or 5 (with Horizon) with the aim for an early liquid stripping program. Drop the PPL261 Well 1 (PNG). Then it will come down to whether TLM wish to explore the southern or the northern part of the Foreland Basin with their other 2 wells. I am of the opinion they will target the northern part of the foreland given it is located in the sweet spot (PPL 269). Now we play the waiting game.