Talisman Energy Acquires Petra A.S. of Norway for US$155m

Talisman Energy (UK) Limited has agreed to acquire all of the outstanding shares of Petra A.S., a wholly owned subsidiary of Petroleum Geo-Services ASA of Norway for US$155 million, subject to working capital adjustments.

"This acquisition effectively doubles the size of Talisman's business in Norway by adding operated production at the Varg field, development potential at South Varg and attractive exploration positions in the North Sea and further north in the Norwegian Sea," said Dr. Jim Buckee, President and Chief Executive Officer. "We believe the Norwegian sector is less mature than the UKCS and there is opportunity for Talisman; this acquisition moves our strategy along."

Talisman Energy (UK) Limited has acquired:

- 70% and operatorship of the Varg oil field
- 70% and operatorship of the undeveloped South Varg gas condensate field
- 80% interest in three operated exploration blocks (PL321)
- 30% interest in five blocks (PL316)
- additional exploration acreage

Production from the Varg oilfield is expected to be approximately 10,000 bbls/d net to Talisman and is expected to be accretive to cash flow and income in 2005 and beyond. These volumes were not included in Talisman's guidance estimate of 445,000-475,000 boe/d on January 11. There are significant infill drilling opportunities in the Varg field and a drilling rig will be mobilized towards the end of the first quarter 2005. Acquired reserves are 50 mmboe proved plus probable (62% liquids, 38% natural gas). Proved reserves are 12 mmbbls, which do not include any reserves attributed to water flood, which has commenced and will be enhanced with the 2005 drilling program.

Talisman entered Norway in May 2003 with the acquisition of a 61% operated interest in the producing Gyda field, platform facilities and gas export pipeline. Subsequently, Talisman has expanded its exploration position around the field by acquiring new acreage.

Closing of the transaction is subject to the required approvals from the Ministry of Petroleum and Energy, the Ministry of Finance and the relevant Norwegian competition authorities. The transaction is also subject to other customary conditions.

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Posted 02/02/05

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