Talisman Reports on North Sea Success

Talisman Energy Inc.'s wholly owned subsidiary, Talisman Energy (UK) Limited announces significant results in its 2001 North Sea development program, notably the resumption of production from Beatrice at the end of June and successful development wells in the Beatrice, Buchan and Clyde oil fields.

Production in the wholly owned Beatrice field was suspended in August 2000 following a routine annual pressure test on the export pipeline. An inspection confirmed the need to replace a section of the pipeline, which is now completed. In addition, a three well drilling program at Beatrice is expected to extend field life by at least five years. The first of these new wells is now onstream at 4,000 bbls/d and production from the field has now risen to 8,000 bbls/d. The British Government has supported Talisman by granting Royalty Remission to Beatrice redevelopment, a first in the UK, signalling its strong support for rejuvenation of older North Sea fields. The Beatrice field redevelopment is expected to add up to 12 mmbbls of reserves.

Further success has been achieved at the Buchan field using innovative drilling technology. Under-balanced coil tubing drilling has been used from a floating platform to sidetrack an existing well and deliver a significant increase in production. The oil production rate from the B3 well has increased four-fold to 5,500 bbls/d, resulting in a Buchan field oil rate of over 13,000 bbls/d, a rate not seen for over six years. Two further Buchan coil tubing drilling opportunities have been identified for 2002. Success with this technology is highly significant for Buchan because the field, with 400 mmbbls in place, has recovered only 118 mmbbls to date. This is very low by North Sea standards and Talisman now expects substantial incremental reserves to be accessed through coil tubing drilling thus extending remaining field life to 2015 and beyond.

Talisman has also completed a further successful horizontal well in the Clyde field, the sixth since it assumed operatorship of the field in 1997. The well has a 2,600-foot horizontal section and accesses undrained reserves in the southern part of the field. The well has come on stream at a rate of 5,000 bbls/d. A further production well will be drilled on the Clyde field in the third quarter.

"These operational results are very exciting. Five years after acquiring the fields, we continue to find investment opportunities add significant production and reserves, with finding and development costs of about C$5.30/boe," said Jim Buckee, President and Chief Executive Officer. "This confirms that our North Sea strategy is working and demonstrates our commitment to the UK Continental Shelf. There is an additional significance that we are increasingly using new technology to unlock further upside reserves beyond our original expectations."