New Lease on Life for Beatrice Field

Talisman Energy (UK) Limited, a wholly owned subsidiary of Talisman Energy Inc., confirmed that, subject to Government approval, it will invest up to $70 million in redeveloping the Beatrice field in Block 11/30a in the inner Moray Firth. Talisman is the operator with a 100% working interest in the field.

The announcement was made at the opening of the Company's new headquarters in Aberdeen, at which UK Trade and Industry Secretary, Stephen Byers, was guest of honor.

Talisman President and Chief Executive Officer Jim Buckee said the redevelopment had only been made possible by the UK Government's agreement to grant royalty remission on the field, believed to be the first granted in the UK. "Beatrice is an old field and our investment would not have been financially viable had we not received practical cooperation from the DTI and Treasury regarding this relief.

"The Beatrice Life Extension Project will add another 5-10 years onto the projected life of the field. This will mean additional revenues for the UK as well as Talisman and the royalty arrangement is therefore clearly in both our interests.

"Talisman has a proven track record of investing in areas where major operators have not. This development underlines that philosophy and reaffirms our commitment to the UKCS, where we will invest a record $565 million in exploration and development spending this year."

The main feature of the investment program will see Talisman lay 60 kilometres of pipeline to replace much of the old pipeline. The pipeline replacement forms part of an overall redevelopment program, which will significantly extend the life of the Beatrice field. This involves refurbishing the Bravo platform and drilling two wells to access undrained areas of trapped oil using a jack-up rig cantilevered over the Bravo platform.

In addition, a workover will be carried out on Bravo, water injection will be increased and dual ESPs (electrical submersible pumps) will be installed in all future completions. Beatrice will have a peak production rate of around 15,000 bbls/d and an annual average of 10,000 bbls/d. Pipelay will commence in April of this year with production expected to start in July.

The overall redevelopment program will secure employment for more than 60 people offshore and at Nigg for a number of years. In the short term, the program could generate around 650 project jobs.


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