II Colombia Oil and Gas Investment Conference

Cartagena, December 3-6, 2006

Production & Cash flow Per Share Growth

Production per share

11% CAGR (14 years)

Cash flow per Share

27% CAGR (14 years)

Sudan portion

0

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

$0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$35

$4.0

$4.5

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

• Independent upstream oil and gas company, created in 1992

• Canadian headquarters

• 1,090 million shares* outstanding

(as of Sept. 30, 2006)

• Approximately 6.5 million shares*/day traded on NYSE and TSX

• ~$25 billion enterprise value

• Focus on larger opportunities: deep gas in North America and multi-million boe international prospects

• Grown from ~30,000 boe/d in 1992 to 500,000 boe/d in 4th qtr 2006

• 3 core producing areas: North America, North Sea, SE Asia

• Exploration focus in Latin America, MENA and North America Frontiers

Talisman Energy – Who are we?

* Post-split on May 31th, 2006

Talisman Energy – Canadian based,

Globally focused

Alaska

Western Canada

US Appalachia

Colombia

Peru

Vietnam

Malaysia

IndonesiaTrinidad

UK & Norway North Sea

Algeria

Tunisia

Qatar

Australia

Total acres worldwide: 53.2 MM, 5.2 MM developed, 48 MM undeveloped Total acres outside N. America: 39.8 MM** As of end 2005

PNG

Netherlands & Denmark

High Quality Reserves –

Consistent Growth

1.64 Billion boe Proved Reserves*

Gross Proved Reserves per Share*(boe/share)

6 mcf:1 boe

13% YoYGrowth

• 10% proved reserve growth in 2005, (liquids up 19%)

• North America + North Sea: 65% of proved reserves

• 45% High quality light oil, 55% natural gas

• Drilling additions > production each year 1993-2005

• 15.2 year reserve life index (P+P), 9.7 year Proved

* Reserves data at year end 2005 (gross before royalties)

N America Oil

N America Gas

N Sea Oil

N Sea Gas Rest of World

SE Asia Oil

SE Asia Gas

*From year-end shares outstanding

Sudan portion

11%

27%

24%

3%

7%

23%

5%

(2005)

8%

24%

31%

5%

7%

18%

7%

943 million boe Probable Reserves*

(2005)

0.0

0.3

0.6

0.9

1.2

1.5

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Talisman Energy – Exploration Strategy

• Talisman invests 5-10% of total annual spend on high impact

international and NAO exploration

• Aiming for average finding cost of < C$5/boe

• Proper balance between below and above ground risk and economic

reward

• Increasing percentage of material prospects > 50 mmboe gross

• Focus only on the best basins. Exit marginal opportunities

• Increased focus on materiality in our existing basins

• Continued growth in Worldwide exploration activity

• Concentration on low risk ventures in core areas, higher risk, higher reward in new venture areas

• In 2005 TLM participated in 754 wells worldwide at a 96% success ratio. In 2006 have participated in 800 wells with similar success

• Leverage knowledge and experience from core areas in new venture areas

Talisman Energy – Exploration Strategy

N. American Thrust Belt E&P - Canada

Monkman

� 2.5 tcf potential unrisked OGIP

� 330,000 gross deep play acres with 35 leads

Alberta Foothills

� 3 tcf potential unrisked OGIP

� 739,000 gross acres with >200 leads

Outer Foothills Trend

� 1-2 tcf potential unrisked OGIP

� 406,000 gross acres with over 150 leads

0 1000 2000kms

Fort St. JohnFort St. JohnFort St. John

Grande PrairieGrande PrairieGrande Prairie

EdsonEdsonEdson

Inner Foothills TrendOuter Foothills TrendTLM LandTalisman Midstream

Ram RiverRam River

Cabin CreekCabin Creek

Chinook RidgeChinook Ridge

TumblerTumbler

GrizzlyGrizzly

ElephantElephant

MONKMANMONKMAN

Grande CacheGrande Cache

FindleyFindley

NarrawayNarraway

FederalFederal

HintonHinton

ALBERTA FOOTHILLSALBERTA FOOTHILLSALBERTA FOOTHILLSTalisman is the leading explorer in the

Canadian Foothills

Talisman is the leading explorer in the Canadian Foothills

Inner Foothills Outer Foothills Plains

N. American Thrust Belt E&P - Canada

Structural styles are similar to Colombian overthrust

Structural styles are similar Structural styles are similar

to Colombian overthrustto Colombian overthrust

Detail showing complex imbrications & duplexing

Detail showing complex Detail showing complex

imbrications & imbrications & duplexingduplexing

Detail showing complex imbrications & duplexing

Detail showing complex Detail showing complex

imbrications & imbrications & duplexingduplexing

From BP Reporte Technico Anual 2004

From: Villamil et al., 2004, JPT, V27, p. 324

60E 93D

fault

Permian

Wells are drilled directionally to take advantage of dense fracture networks and enhanced permeability in fold cores

N. American Thrust Belt E&P - Canada

Fold Axis

Typical Fractures

Foothills wells are drilled horizontally along the fold axis in order to intersect statistically more open fractures

Wells typically produce initially at rates 3-4 times that in a vertical well

Exploration technique has opened up new areas in Foothills where reservoir quality is inhomogeneous

N. American Thrust Belt E&P - Canada

N. American Thrust Belt E&P – W. USA

• New area for TLM, hope to

emulate Alberta Foothills

successful strategy

• WUSA Overthrust belt is under-

explored & equivalent to the

Alberta Foothills in 1980

• 630,000 Net Acres with an

additional 53,000 Net Acres

under options

• Drilling 4 prospects in 2007

• 17 different leads and

opportunities on current holdings

• Intent to grow presence if

successful

Talisman in Latin America

PERU2 Blocks

4,196,000 acres

Colombia3 Blocks

904,100 acres

TRINIDAD4 Blocks

375,300 acres

Pozo Fm.

l. Huaybamba Gp.Vivian Fm.

Chonta Fm.Agua Caliente Fm.

Cushabatay Fm. & older

Undivided MioceneTYPICAL SECTION

Peru: Block 64 Exploration

• First significant light oil discovery in Peru in 16 years

• 2,400 bopd 36°API gravity restricted rate; est. 4,500 bopd at 500 psi surface flowing pressure from one of possible four reservoirs

• Multiple high amplitude structures• Along main Northern Peru Pipeline (70 kms) with

60,000 bopd spare capacity

Peru: Block 101 Exploration

Block 101Block 101Block 101

Block 1AB~750 MMB

Block 1ABBlock 1AB

~750 MMB~750 MMB

Block 64Block 64Block 64

• On trend with significant light and heavy oil discoveries in Block 1AB

• Subtle structural/stratigraphic traps anticipated

• Key is seismic definition and depth conversion

Trinidad – Thrustbelt E&P

Ruby Ruby –– 1 latest discovery, Nov 1 latest discovery, Nov

20062006

� TD: 5,750 feet

� 1,200’ hydrocarbon bearing Angostura sandstone with 800’+ net pay

� Well DST: Nearly 5,000 bbls/day from a limited reservoir section

� Enhances prospectivity of 3a

� Eastern Block exploration on-going

Nariva Thrustbelt

Talisman – Why Colombia?

� Colombian thrust belt basins are still immature from an exploration standpoint

� Key learning's from Talisman thrust belt exploration in North America and elsewhere in Latin America are applicable

� Possibility to apply new technologies

� Contract terms attractive, stable fiscal environment

Talisman in Colombia

• TLM began exploration in Colombia with a two-pronged attack in the Upper Magdelana Basin sub-thrust play and the Llanos Basin overthrust play

• Currently TLM is concentrating exploration efforts in the Llaños basin overthrust and foreland. Planned activity in 2007 is seismic acquisition and reprocessing targeting 2008 drilling program

TLM 30% W.I.Partners: TEPMA & Hocol

Circa 2004

Current

Talisman in Colombia – U. Magdalena

• Talisman participated in several wells in the Acevedo, Altamizal and Huila Norte blocks in the Upper Magdalena Basin•Main target was possible Caballos and Monserrate sandstones trapped in a sub-thrust position against overthrusted basement• Exploration program was completed in 2004 without success – fault leakage ?

Talisman in Colombia - Llaños

• Talisman and partners TEPMA & Hocol drilled Tangara-1 with two follow-up sidetracks. Tangara – 1 P&A in 2005, shows but no commercial accumulation

• Remaining leads require seismic reprocessing and possibly additional data to elevate to prospect status

• Shallow, lateral velocity variations main issue

Tangara - 1

Talisman in Colombia - Llaños

Mundo Nuevo30% WIMundo Nuevo30% WI

Tangara 30% WITangara 30% WI

Niscota30% WINiscota30% WI

Colombia – Niscota Block AwardColombia – Niscota Block AwardN

Talisman WI % (NEW)Talisman WI % (EXISTING)

Gas FieldOil Field

FLOREÑA (1994)*STOIP: 167 mmbbls ; STGIP: 0.17Tcf

PAUTO SUR (1992)*STOIP: 300 mmbbls ; STGIP: 0.75Tcf

DELE (1995)*STOIP: 80 mmbbls

25 50

km

0

Colombia – Niscota Block AwardColombia – Niscota Block Award

Talisman TEA Blocks

El Caucho TEA 598,812 acres

El Caucho TEA 598,812 acres

VOLCANERA (1993)*STOIP: 142 mmbbls ; STGIP: 0.83Tcf

CUPIAGUA (1992)*STOIP: 934 mmbbls ; STGIP: 3.3Tcf

CUPIAGUA SUR (1997)*STOIP: 160 mmbbls ; STGIP: 0.3Tcf

CUISIANA (1988*STOIP: 1400 mmbbls ; STGIP: 3 Tcf

2007 - Planned acquisition of seismic in Niscota

Florena

Niscota S

TLM in Colombia – What next?

• Continue with exploration program in Llanos

• Pursue other opportunities in the Llanos and perhaps other Colombian basins

• If you have an opportunity please contact us!!

Talisman - Advisory

Advisory - Forward-looking Statements - This presentation contains statements that constitute forward-looking statements or forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. These statements include, among others, statements regarding business strategy, estimates of future sales and production, business plans for drilling, exploration and development, the estimated amounts and timing of capital expenditures, anticipated cash flow versus debt, annual dividends and share repurchases, or other expectations, beliefs, plans, goals, objectives, assumptions or statements about future events or performance. Statements concerning oil and gas reserves contained in this presentation may also be deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the resources described can be profitably produced in the future. Often, but not always, forward-looking statements use words or phrases such as: “expects”, “does not expect” or “is expected”, “anticipates” or “does not anticipate”, “plans” or “planned”, “estimates” or “estimated”, “projects” or “projected”, “forecasts” or “forecasted”, “believes”, “intends”, “likely”, “possible”, “probable”, “scheduled” , “positioned”, “goal” , “objective” or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking statements throughout this presentation. Statements which discuss business plans for drilling, exploration and development in 2006 assume that the extraction of crude oil, natural gas and natural gas liquids remains economic. For the purposes of preparing this presentation, Talisman assumed a US$64.60/bbl West Texas Intermediate oil price, a US$7.75/mmbtu New York Mercantile Exchange natural gas price, a US$/Canadian$ exchange rate of $0.86 and a Canadian$/British £ rate of 2.05.

This presentation also discusses anticipated cash flow and debt for 2006. The material assumptions used in determining estimates of cash flow are: the anticipated production volumes; estimates of realized sales prices, which are in turn driven by benchmark prices, quality differentials and the impact of exchange rates; estimated royalty rates; estimated operating expenses; estimated transportation expenses; estimated general and administrative expenses; estimated interest expense, including the level of capitalized interest; anticipated cash payments made by the Company upon surrender of outstanding stock options using the cash payment feature, which in turn is dependent on the trading level of the Company’s common shares and the number of stock options surrendered or exercised; and the anticipated amount of cash income tax and petroleum revenue tax. The material assumptions used in determining estimates of year end debt are: the anticipated amount of cash flow; anticipated capital expenditures; the amount of anticipated dividend payments; movements in working capital; and estimated year end exchange rates. Forecasted production volumes are based on the mid-point of the estimated production range. Statements regarding estimated future production and production growth, as well as estimated financial results which are derived from or depend upon future production estimates (such as cash flow) do not reflect the impact of any potential asset dispositions. The completion of any contemplated asset dispositions is contingent on various factors including favorable market conditions, the ability of the Company to negotiate acceptable terms of sale and receipt of any required approvals for such dispositions. The amount of taxes and cash payments made upon surrender of existing stock options is inherently difficult to predict.

Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated by Talisman. These risks include, but are not limited to:

• the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas, and market demand;

• risks and uncertainties involving geology of oil and gas deposits;

• the uncertainty of reserves estimates and reserves life;

• the uncertainty of estimates and projections relating to production, costs and expenses;

• potential delays or changes in plans with respect to exploration or development projects or capital expenditures;

• fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;

• the outcome and effects of completed acquisitions, as well as any future acquisitions and dispositions;

• the ability of the Company to integrate any assets it has acquired or may acquire or the performance of those assets;

• health, safety and environmental risks;

• uncertainties as to the availability and cost of financing and changes in capital markets;

• uncertainties related to the litigation process, such as possible discovery of new evidence or acceptance of novel legal theories and difficulties in predicting the decisions of judges and juries;

• risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action);

• changes in general economic and business conditions;

• the effect of acts of, or actions against, international terrorism;

• the possibility that government policies or laws may change or governmental approvals may be delayed or withheld;

• results of the Company’s risk mitigation strategies, including insurance and any hedging programs; and

• the Company’s ability to implement its business strategy.

Additional information on these and other factors which could affect Talisman's operations or financial results are included: (1) under the heading “Risk Factors” in the Company’s annual information form; and (2) under the heading “Management's Discussion and Analysis – Risks and Uncertainties“ and else wherein in the Annual Report Financial Review. Information is also available in Talisman's other reports on file with Canadian securities regulatory authorities and the United States Securities and Exchange Commission. Forward-looking statements are based on the estimates and opinions of Talisman's management at the time the statements are made. Talisman assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

Advisory - Non-GAAP Financial Measures - This presentation includes references to terms used in the oil and gas industry such as cash flow. This term is not defined by Generally Accepted Accounting Principles in either Canada or the US. Consequently this is referred to as a non-GAAP measure. Cash flow, as commonly used in the oil and gas industry, appears as a separate caption on the Company’s cash flow statement and represents net income before exploration costs, DD&A, future taxes and other non-cash expenses. Cash flow is used by the company to assess operating results between years and between peer companies with different accounting policies. Cash flow should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determines in accordance with Canadian GAAP as an indicator of the Company’s performance or liquidity. Our reported results of cash flow may not be comparable to similarly titled measures by other companies.

Advisory – Canadian Dollars - Numbers are in Canadian dollars unless otherwise indicated. Unless otherwise indicated,financial information is presented in accordance with Canadian generally accepted accounting principles that differ from generally accepted accounting principles in the US.

Advisory - Reserves Data and Other Oil and Gas Information - Talisman's disclosure of reserves data and other oil and gas information is made in reliance on an exemption granted to Talisman by Canadian securities regulatory authorities, which permits Talisman to provide disclosure in accordance with US disclosure requirements. The information provided by Talisman may differ from the corresponding information prepared in accordance with Canadian disclosure standards under National Instrument 51-101 (NI 51-101). Proved reserves disclosed in this presentation have been calculated using the standards contained in Regulation S-X of the US Securities and Exchange Commission (SEC). Probable reserves have been calculated using the definition for probable reserves set out by the Society of Petroleum Engineers/World Petroleum Congress ("SPE/WPC"). Further information on the differences between the US requirements and the NI 51-101 requirements is set forth under the heading "Note Regarding Reserves Data and Other Oil and Gas Information" in Talisman's Annual Information Form. The exemption granted to Talisman also permits it to disclose internally evaluated reserves data. While Talisman annually obtains an independent audit of a portion of its reserves, no independent reserves evaluator or auditor was involved in the preparation of the reserves data disclosed in this presentation.Throughout this presentation, the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (mcf) of natural gas for one barrel of oil and is based on an energy equivalence conversion method. Boes may be misleading, particularly if used in isolation. A boe conversion ration of 6 mcf:1 bbl is based on an energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalence at the wellhead.

Throughout this presentation, Talisman makes reference to production volumes. Where not otherwise indicated, such production volumes are stated on a gross basis, which means they are stated prior to the deduction of royalties and similar payments. In the United States, net production volumes are reported after the deduction of these amounts.

Talisman - Advisory