Talisman to Shut Down Tartan Facility in 4Q

Talisman has announced resumption of production at its Rev facility in Norway. Rev, which is a subsea tieback to the third party operated Armada platform had mechanical issues associated with the maintenance of the gas export line from the host platform.

Talisman's Claymore platform in the UK is in preparation to start production following a planned turnaround which has been extended to complete remediation work resulting from a prohibition notice from the UK Health and Safety Executive (HSE). The platform is anticipated to restart by the end of October. Talisman is also undertaking safety related upgrades at its UK Tartan platform. To accommodate this work, it is expected that Tartan will be shut down over the entire fourth quarter.

None of these repairs reflect substantive issues with respect to the integrity of the platforms, but are important for ongoing safe operations. The cumulative impact of these one-time, unplanned events will be to reduce Talisman's North Sea production by approximately 13,000 boe/d during the third quarter and 7,000 boe/d during the fourth quarter.

In addition, weather related issues during breakup in western Canada, and slower than anticipated progress on shale ramp ups, resulted in the loss of an additional 7,000 boe/d during the third quarter in North America.

The combined volume impact of North America and the North Sea was approximately 20,000 boe/d during the third quarter, 5,000 boe/d annualized. As a result, the company currently expects third quarter production to average approximately 400,000 boe/d. North Sea volumes are expected to average 83,000 boe/d in the third quarter, increasing to approximately 100,000 boe/d in the fourth quarter. Lower volumes in the third quarter also reflect planned maintenance activities during the period.

With strong growth in shale production, the startups at Rev and Claymore, and delivery of the Kitan project in Australia, the company expects production to increase substantially in the fourth quarter. However, these unplanned events are expected to result in 2011 production averaging around 425,000 boe/d. Excluding the acquisition of the Colombia properties, this represents about 6% underlying annual growth over 2010 levels.

"In line with our priority of safe operations, we are conducting extended maintenance work on our Tartan platform in the North Sea." said John A. Manzoni, President & CEO. "While we have seen a number of successes across the portfolio in 2011, for instance the strengthening of our shale portfolio in the Eagle Ford and Duvernay plays, strong growth from the Marcellus, and continuing exploration success in Colombia, the production misses have been disappointing, and reflect poor delivery and execution in a few areas of our portfolio.

"In light of this, as we formulate our plans for 2012, we will reflect increased focus in both our exploration and operating areas, and strong capital discipline, while still delivering underlying production growth. Talisman's portfolio and capital investment plans will be finalized over the last quarter of this year and outlined as usual in early January."