Talisman Energy Inc. About Us Operations Investors News Corporate Responsibility HSE Careers About Us "In 2014, we expect more improvements in performance, with continued growth in high-margin liquids production generating increased cash flow. While our overall production base will be lower as a result of non-core asset sales, production from ongoing operations in our two core regions, the Americas and Asia-Pacific, is expected to grow 4-7% with liquids volumes increasing 14-19%. " Hal Kvisle, President and CEO Our objective is to create sustainable value for our shareholders. We will continue to position the company to achieve this by building on the foundational work started in 2013. We will continue to focus on the best assets in our two core regions (the Americas and Asia-Pacific), and maintain a disciplined capital spending program targeting near-term, high margin production. In addition, we announced the second phase of non-core asset sales to unlock $2 billion of additional value by divesting long-dated, capital intensive assets. Our goal in 2014 and beyond is to deliver annual cash flow per share growth, while maintaining a strong balance sheet. 2014 Guidance Summary Growing liquids production from our two core regions: • Targeting 14-19% liquids growth from the Americas and Asia-Pacific. • Two core regions expected to deliver over 90% of total production. • Expected growth in production from ongoing operations of 2-6%. Unlocking additional value and further focusing the portfolio: • A further $2 billion of dispositions or joint ventures planned during the next 12-18 months. • Expect to divest long-dated, capital intensive assets and continue to strengthen and focus the portfolio within the two core regions. • Proceeds will be used to maintain a strong and flexible balance sheet. Two core regions will deliver higher cash margins and drive cash flow growth: • Cash flow forecast to grow 5% to $2.3 billion in 2014, reflecting higher cash margins per barrel. • Cash flow growth largely a result of increased high margin production from the Americas and Asia-Pacific. Executing a disciplined capital program focused on near-term, high margin production: • Capital expenditure is expected to be $3.2 billion, flat compared to 2013 and down 20% from 2012. • 70% of expected 2014 capital expenditure will be invested in the Americas and Asia-Pacific core regions. 2014 Plan - Four priorities to drive value creation Live within our means Talisman has a large, attractive portfolio of investment opportunities, and we will continue to focus our capital on high-margin, near-term opportunities. Assets and projects with large capital requirements and long-dated returns have been identified as candidates for sale or farm-down. Through disciplined capital allocation and cost control in our two core regions – along with additional expected dispositions of capital intensive assets – we remain committed to creating a business that generates sustainable cash flow growth and strong shareholder returns. Achieving $2 billion of planned asset sales over the next 12-18 months will enable us to maintain a strong balance sheet in the near term. Focused capital program Our two core regions, the Americas and Asia-Pacific, provide the foundations from which our company will grow. In North America, we are competitively positioned in a number of shale gas and liquids plays and have a core of profitable conventional properties. In Asia-Pacific, our core assets are characterized by long production life, low costs and high netbacks. Between 2011 to 2014, Talisman will have reduced investment in low netback North American natural gas programs by 70% and increased investment in higher margin liquids projects in North America and Colombia. As a result, liquids volumes in the Americas are expected to grow from 31,000 bbls/d in 2011 to a range of 58,000 bbls/d to 61,000 bbls/d in 2014. In 2013, capital spending was $3.2 billion – down $800 million from 2012. In 2014, we plan to hold spending flat at approximately $3.2 billion. Approximately $2.3 billion (around 70%) will be invested in the two core regions. Improve operational performance and cash margins Talisman continues to improve operational performance and cash margins, particularly in our North American shale operations, where we have reduced drilling and completion costs and cycle times. Through our focus on operational excellence, we brought the HST/HSD oilfield development offshore Vietnam onstream ahead of schedule and under budget. As a result of the ongoing shift to higher margin production and increased efficiencies, cash margin per barrel of oil equivalent is expected to increase by approximately 6-11% in 2014. By the end of 2013, excluding one-off costs, we reduced our underlying net G&A by 20% ($100 million on a run-rate basis) compared to 2012 and we intend to reduce that by a further 10% in 2014. Unlock net asset value within the portfolio In March 2013, Talisman set a 12-18 month target to realize $2-3 billion of value through the sale of non-core assets that were generating little or no short-term cash flow. We achieved this target within 12 months and asset sales agreed in 2013 and in Q1 2014 will total over $2.2 billion. Over the next 12-18 months, we plan to dispose of approximately $2 billion of additional assets (primarily long-dated and capital intensive). The majority of the proceeds will be directed towards maintaining a strong and flexible balance sheet. 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