Talisman Negotiate for Fulmar and Auk Fields in North Sea

Talisman Energy Inc. announced that its wholly owned subsidiary, Talisman Energy (UK) Limited, has reached agreement to enter into exclusive negotiations with Shell U.K. Limited and Esso Exploration and Production UK Limited to acquire their combined 85.8% interest in the Fulmar field (Blocks 30/11b and 30/16s) and 100% interest in the Auk field (Blocks 30/16n and 30/16t) in the Central North Sea. The transaction is conditional on agreement of the final terms of the acquisition and will be subject to co-venturer and UK government approvals. Assuming successful completion of the transaction and requisite approvals, Talisman is expected to assume operatorship later this year.

The transaction will significantly expand Talisman's existing Clyde core area assets in the Central North Sea. Talisman currently operates both the Clyde field (Talisman 95%) and Orion field (Talisman 93.7%), which, along with the Auk and Gannet fields, export via the Fulmar production facilities. The Company also has an existing 12.7% interest in the Fulmar field.

"This is a good business opportunity for Talisman and is a continuation of our successful acquire and develop strategy in the North Sea," said Dr. Jim Buckee, President and Chief Executive Officer. "The combined Clyde, Orion, Fulmar and Auk operations will yield a number of operating efficiencies. We believe redevelopment of the Auk field will deliver significant increases in recoverable reserves and production volumes."

Additional details will be provided when the transaction is completed, however, the parties have agreed not to disclose a purchase price.

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Posted 22/02/06

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