Talisman Energy Second Quarter Results

NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Talisman Energy Inc. 
TSX SYMBOL:  TLM
NYSE SYMBOL:  TLM 
JULY 29, 2014 
Talisman Energy Second Quarter Results 
Talisman delivers year-over-year production, liquids and cash flow growth 
CALGARY, ALBERTA--(Marketwired - July 29, 2014) - Talisman Energy Inc.
(TSX:TLM) (NYSE:TLM) reported its operating and unaudited financial results for
the second quarter of 2014. All values are in US$ unless otherwise stated.  
"During the past two years we have focused our efforts and capital on a
strong portfolio of long life assets in our Americas and Asia-Pacific core
regions," said Hal Kvisle, President and CEO. "We have invested to
grow production and cash flow(1) from our best assets, while working to reduce
operating and overhead costs.  
"Our year-over-year performance demonstrates solid progress and underlines
the strength of our core regions. Total production and liquids volumes from
ongoing operations within these areas have grown 12% and 23% respectively.
Through disciplined capital investment and a focus on operational excellence,
we have grown corporate cash flow by 8% year-over-year, driven by strong
performance in our core regions. We remain on track to meet our operating and
financial targets for 2014." 
Second Quarter Highlights 
/T/ 
--  Total production was 375,000 boe/d - up 4% year-over-year. 
--  Production from ongoing operations in the core regions was 330,000 
boe/d, up 12% year-over-year and 4% from the previous quarter. 
--  Core region liquids production was 115,000 boe/d, up 20% year-over-year.
--  North American liquids production was 45,000 bbls/d, up 36% year-over-    year. 
--  Cash flow was $567 million, up 8% year-over-year.   
/T/ 
To view the graph associated with this release, please visit the following
link: http://media3.marketwire.com/docs/959417_graph.jpg 
(1) The term "cash flow" is a non-GAAP measure. Please see advisories
and reconciliations elsewhere in this release.  
(2) Reflects announced and /or completed dispositions of Montney, Monkman, Ojay
and Southeast Sumatra (see link to graph for associated footnote). 
Second Quarter Summary 
Talisman continues its evolution towards a two region company through focused
capital investment and high grading of its portfolio. On a year-over-year
basis, the company has grown total production from ongoing operations in its
core regions by 12% and liquids production by 20%.  
Capital spending(3) during the quarter was $724 million and is in line with
full year guidance of $3.2 billion. Proceeds from dispositions will continue to
reduce corporate debt, maintaining a strong balance sheet as the company works
to reduce its exposure to the North Sea and other non-core areas. 
Talisman's North American operations delivered total production of 177,000
boe/d. Production from ongoing operations was 169,000 boe/d, reflecting the
completed Monkman asset disposition and the previously announced disposition of
the Ojay assets, expected to be completed in the third quarter. On a
like-for-like basis, this represents an 18% increase year-over-year and a 7%
increase from the previous quarter. Netbacks in North America grew 36% and cash
flow grew approximately 40% year-over-year. 
New wells in the Eagle Ford and successful rich gas development in Greater
Edson contributed to total North American liquids production of 45,000 bbls/d,
up 36% year-over-year. Compared to the previous quarter, liquids production is
up 7% on increased volumes from the Eagle Ford.  
In Colombia, production in the quarter was 20,500 boe/d, up 17% year-over-year
and 5% from the previous quarter. In Block CPO-9, Talisman brought a ninth well
onto long-term test and also completed a successful short-term flow test at the
base of the Akacias reservoir, confirming the trend of mobile oil down-dip in
the structure. Talisman has yet to encounter the oil-water contact in the
reservoir. 
Talisman's Southeast Asia operations delivered total production of 131,000
boe/d. Production from ongoing operations was 128,000 boe/d for the quarter. On
a like-for-like basis, this reflects a 2% increase year-over-year and is
consistent with the previous quarter. Oil and liquids netbacks grew 47% in the
region over the same period last year due to high netback production from
HST/HSD in Vietnam coming onstream in May 2013. The temporary shut-in of an
inter-field pipeline at PM-3 in Malaysia was successfully lifted during the
quarter. Impacts to production were largely offset by increased production from
Corridor in Indonesia and increased liquids volumes from Kinabalu in Malaysia.  
In the North Sea, Talisman's share of UK production was 19,500 boe/d, up
6% from the previous quarter and 12% on a year-over-year basis, largely due to
the restart of production from the Claymore platform in the middle of the first
quarter. In Norway, planned maintenance at Veslefrikk and Brage reduced
production by 12% compared to the previous quarter, to 14,500 boe/d.  
(3) The term "capital spending" is a non-GAAP measure. Please see
advisories and reconciliations elsewhere in this release. 
Financial Results 
For operational purposes, Talisman has two core operating areas: the Americas
(North America and Colombia) and Asia-Pacific (Southeast Asia and Algeria). For
the purposes of financial reporting, Talisman's activities are reported in
four geographic segments: North America, Southeast Asia, North Sea and Other
(Algeria and Colombia). The remainder of this press release is based on
Talisman's geographic segments for the purposes of financial reporting.
See the advisories elsewhere in this release for more information or visit
Talisman's website at www.talisman-energy.com. 
/T/ 
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June 30                                           Q2 14      Q1 14    Q2 13 
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Cash flow ($ million)                               567        616      526 
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Cash flow per share(4)                             0.55       0.60     0.51 
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Earnings (loss) from operations ($ million)(4)       (9)        79      (27)
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Net income (loss) ($ million)                      (237)       491       97 
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Net income (loss) per share                       (0.23)      0.47     0.09 
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Average shares outstanding - basic (million)      1,034      1,032    1,030 
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Capital spending ($ million)                        724        768      843 
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Dispositions ($ million, net of deal cost)           52      1,340       99 
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Net debt(4)($ million)                            4,227      3,813    4,590 
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/T/ 
Cash flow for the second quarter was $567 million, up 8% year-over-year and
down 8% over the previous quarter. The quarter-on-quarter reduction was due
largely to the impact of the sale of 123 mmcf/d of dry gas production
associated with the Montney and Monkman assets in the first quarter and lower
North American gas prices, partially offset by higher liquids volumes. 
During the quarter the company recorded a net loss of $237 million. The primary
driver for the loss was a $171 million movement relating to cash settlements
($46 million) and non-cash mark-to-market loss ($125 million) on commodity
derivatives. In addition, the company lowered the credit adjusted discount rate
applied to its asset retirement obligation liabilities across the portfolio by
100 basis points, resulting in an after-tax impairment of $50 million in the UK
and $12 million in Norway.  
The company recorded a loss of $9 million (on a non-GAAP basis) from
operations, compared to earnings from operations of $79 million in the first
quarter, mainly due to lower North American gas prices, partially offset by
higher liquids volumes. 
Talisman's ongoing disciplined capital program resulted in spending for
the quarter of $724 million on a non-GAAP basis, down 14% year-over-year and
down 6% from the previous quarter. Capital spending to date is in line with the
company's expectations and full-year guidance of $3.2 billion. 
Net debt at June 30, 2014 was approximately $4.2 billion, up from approximately
$3.8 billion in the previous quarter. Talisman aims to divest $2 billion of
long dated, non-core, capital intensive assets over the next 12-18 months.
Proceeds from dispositions will be primarily used to maintain a strong balance
sheet. 
(4) The terms "cash flow per share", "earnings (loss) from
operations" and "net debt" are non-GAAP measures. Please see
advisories and reconciliations elsewhere in this release. 
Commodity Pricing and Netbacks 
North Sea results include Norway and the company's proportionate results
from TSEUK. Other results include Algeria, Colombia and the company's
proportionate results from Equion. The company's realized sales price
includes the impact of physical commodity contracts, but does not include the
impact of the financial commodity price derivatives.  
/T/ 
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June 30                                            Q2 14     Q1 14     Q2 13
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Pricing                                                                     
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WTI benchmark ($/bbl)                             102.99     98.68     94.22
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Brent benchmark ($/bbl)                           109.63    108.22    102.44
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NYMEX benchmark ($/mmbtu)                           4.57      4.90      4.09
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Oil and liquids netbacks ($/bbl)                                            
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North America                                      41.67     45.40     36.45 
------------------------------
Southeast Asia                                     43.69     44.97     29.67 
------------------------------
North Sea                                          14.02     21.80     17.96 
------------------------------
Other                                              50.24     49.60     57.74
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Total oil and liquids netbacks ($/bbl)             38.05     40.62     33.13
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Natural gas netbacks ($/mcf)                                                
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North America                                       2.27      2.70      1.72 
------------------------------
Southeast Asia                                      5.18      5.04      5.60 
------------------------------
North Sea                                           5.28      4.78     13.71 
------------------------------
Other                                               1.48      2.08      1.86
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Total natural gas netbacks ($/mcf)                  3.38      3.55      3.20
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Total company netback ($/boe)                      27.18     28.44     24.06
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/T/ 
Pricing  
In North America, Talisman's realized oil and liquids prices (excluding
the impact of financial hedging) were flat compared to the same period last
year and down 3% compared to the previous quarter, primarily due to increased
NGL production resulting in a higher weighting to NGL prices in the realized
liquids price. This was offset by higher realized liquids prices in Western
Canada. In Southeast Asia, realized oil and liquids prices were consistent with
movements in regional benchmark prices during the quarter and increased 10%
year-over-year. 
Realized natural gas prices in North America were up 11% year-over-year and
down 11% compared to the previous quarter. The quarterly reduction was due to
lower NYMEX and AECO prices and widening differentials in some markets over the
same period. In Southeast Asia, realized natural gas prices decreased by 2%
from the previous quarter.  
Netbacks 
Talisman's average gross netback was $27.18/boe, up 13% year-over-year and
down 4% from the previous quarter. The quarter-on-quarter reduction was due to
lower realized gas prices in North America, higher overall royalties due to
increased production in higher royalty paying locations, and higher operating
costs in the UK and Norway as a result of planned maintenance.  
Gross oil and liquids netbacks were $38.05/boe, up 15% year-over-year and down
6% over the previous quarter, primarily due to higher operating costs and
royalties. Talisman's gross natural gas netback was $3.38/boe, up 6%
year-over-year and down 5% quarter-over-quarter due to fluctuations in North
American gas prices. 
Production 
Table includes Talisman's share of production from subsidiaries and
equity-accounted entities.  
/T/ 
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June 30                                            Q2 14     Q1 14     Q2 13
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Oil and liquids (mbbls/d)                                                   
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North America                                         45        42        33
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Southeast Asia                                        45        44        43
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North Sea                                             30        32        30
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Other (including Colombia and Algeria)                25        24        20
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Total oil and liquids (mbbls/d)                      145       142       126
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Natural gas (mmcf/d)                                                        
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North America                                        795       867       846
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Southeast Asia                                       515       522       519
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North Sea                                             22        17         6
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Other (including Colombia and Algeria)                48        46        43
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Total natural gas (mmcf/d)                         1,380     1,452     1,414
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Total mboe/d                                         375       384       361
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Assets sold or held for sale (mboe/d)                                       
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North America(5)                                       8        28        32
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Southeast Asia(6)                                      3         3         4
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Total assets sold or held for sale (mboe/d)           11        31        36
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Production from ongoing operations (mboe/d)          364       353       325
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(5) Includes Monkman - sale closed April 16, 2014, and Ojay - sales          
agreement in place and expected to close in 2014 (99% dry gas).         
(6) Includes Southeast Sumatra - sales agreement reached in December 2013,   
and Northwest Java - sold in May 2013.                                   
/T/ 
Total production averaged 375,000 boe/d in the quarter, up 4% year-over-year.
This includes production of 11,000 boe/d in the quarter from the company's
Monkman, Ojay and Southeast Sumatra assets that have either been sold or held
for sale. Production from ongoing operations averaged 364,000 boe/d, up 12%
year-over-year and 3% compared to the previous quarter.  
Total production from Talisman's core Americas and Asia-Pacific businesses
was 341,000 boe/d, up 3% over the same period last year. Production from
ongoing operations from these core regions was 330,000 boe/d, up 12%
year-over-year.  
Total liquids production averaged 145,000 bbls/d, up 15% year-over-year and up
2% from the previous quarter, reflecting the company's continued focus on
growing higher value liquids. In North America, total liquids production was up
36% year-over-year, to 45,000 bbls/d. In Southeast Asia, total liquids
production was up 5% year-over-year, to 45,000 boe/d. 
North American production from ongoing operations up 19%, liquids up 33%
year-over-year 
/T/ 
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June 30                                            Q2 14     Q1 14     Q2 13
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Gas                                                                         
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  Edson-Duvernay-Montney                             182       180       159
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  Marcellus                                          469       440       426
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  Eagle Ford                                          77        67        50
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  Other                                               18        15        21
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Gas from ongoing operations (mmcf/d)                 746       702       656
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Liquids                                                                     
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  Edson-Duvernay-Montney                              12        11         5
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  Eagle Ford                                          23        21        17
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  Chauvin                                             10        10        11
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Liquids from ongoing operations (mbbls/d)             45        42        33
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Total production from ongoing operations                                    
 (mboe/d)                                            169       158       142
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Assets sold or held for sale (mmcf/d)(7)              49       165       190
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Total North America production (mboe/d)              177       186       174
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(7) Assets sold or held for sale in Q214 include Monkman - sale closed April 
16, 2014, and Ojay - sales agreement in place and expected to close in   
2014 (99% dry gas), and in Q114 include Montney - sale closed March 12,  
2014, Monkman and Ojay.                                                  
/T/ 
In North America, total production averaged 177,000 boe/d for the quarter.
Production from ongoing operations averaged 169,000 boe/d, up 7% from the
previous quarter and 19% year-over-year. The increase from the previous quarter
was due to additional wells coming onstream in both the Marcellus and Eagle
Ford. Year-over-year liquids production is up 36% on higher liquids volumes
from the Eagle Ford and Greater Edson.  
In the Eagle Ford, production averaged 36,000 boe/d in the quarter, up 13% over
last quarter and 44% over the same period last year. Liquids volumes averaged
23,000 boe/d, up 35% compared to the same period last year and up 10% versus
the previous quarter. Year-to-date, Talisman and its partner have drilled 29
wells and brought 45 wells onstream. 
In the Marcellus, production for the quarter averaged 469 mmcf/d, up 7% from
last quarter and 10% over the same period last year, as the company brought
more wells onstream and further reduced cycle times versus plan through
completion efficiencies. The company has reduced its inventory of drilled but
uncompleted wells from 58 at the beginning of the year to 23.  
In the Friendsville area of the Marcellus, 11 wells of a planned 24 net wells
in 2014 have been drilled. Construction of key infrastructure projects in the
area is ongoing, with production expected to come onstream in 2015. A second
rig is expected to start drilling in the western part of the company's
Marcellus acreage in the third quarter. 
In the Greater Edson area (which includes Wild River), total production for the
quarter was 47,000 boe/d. Liquids production averaged 11,000 bbls/d, in line
with the previous quarter. Gas production from ongoing operations was 170
mmcf/d in the second quarter, up 11% compared to the same period last year and
up 3% from the previous quarter, due to a successful horizontal drilling
program. 
Drilling activity in the quarter was reduced during spring break up, with one
Wilrich well spud. The company now has seven Wilrich wells onstream, with
average initial 30-day restricted production rates of 5.5 mmcf/d with 235
bbls/d of liquids net to Talisman. Two horizontal wells in the Dunvegan
formation have also been drilled, with average initial 30-day production rates
of 5.1 mmcf/d with 375 bbls/d of liquids net to Talisman. Following spring
break up, the company resumed drilling activity in Greater Edson with two
drilling rigs and plans to ramp-up to four rigs by year-end. In addition to the
Wilrich and Dunvegan formations, the drilling program will be expanded to
include wells targeting the Falher, Gething and Bluesky formations. Talisman
expects third quarter production will be impacted by approximately 3,000 boe/d
due to a planned turnaround at the Edson Gas Plant.  
In the Duvernay, four wells have been drilled this year, including one in the
Wild River area, one in Bigstone and two from a common surface location in the
Ferrier area. Drilling operations are nearly finished at a fifth well in the
Willesden Green area. Drilling performance has improved as the company gains
operational experience in the play, with the second Ferrier well drilled from
surface to a total depth of 5,700 metres in 27 days, and the Willesden Green
well reaching total depth of 5,400 meters in 24 days. Both wells are
pacesetters for the company in these areas of the Duvernay, despite each having
longer lateral sections than any previous Duvernay wells drilled by Talisman. 
In the Chauvin area, liquids production averaged 10,000 boe/d, consistent with
the previous quarter and the same period last year. The company realized
Western Canadian Select pricing of $83.01/bbl in the quarter, up 10% from the
previous quarter. Talisman plans to drill approximately 30 wells in Chauvin
before year-end.  
Colombia production up 17% year-over-year  
In Colombia, production averaged 20,500 boe/d, up 17% year-over-year and up 5%
over the previous quarter. In the foothills region, the Equion joint venture
averaged 16,500 boe/d. As part of the Piedemonte expansion project, five wells
have been drilled, three more are currently drilling and two more wells are
scheduled to spud later in 2014. Expansion of the processing plant at
Piedemonte is progressing and is expected to be complete in the first quarter
of 2015.  
In Block CPO-9, nine of ten Akacias production wells have been put on long-term
test, producing an average of approximately 7,500 bbls/d gross (3,400 bbls/d
net to Talisman) of oil. During the quarter, production was intentionally
reduced as improvements to the temporary production facilities began in an
effort to accommodate longer term production. The operator is working to resume
production to full potential over the third quarter. Until completed, Akacias
production will be constrained to approximately 6,500 - 7,500 bbls/d gross
(3,000 - 3,400 bbls/d net to Talisman).  
A successful short-term flow test at the base of reservoir in the AK-20
appraisal well continued the trend of finding mobile oil down-dip on the
structure and supports the previously reported best estimate of 2.5 billion
barrels of mobile heavy oil in place. Longer term flow testing is required to
determine the recovery factor and implications for recoverable resources. The
partners are in the process of obtaining approval from the regulator to flow
test two stratigraphic wells drilled down-dip of AK-20. To date, the oil-water
contact in the reservoir has yet to be found. Talisman and its operating
partner have submitted the first phase of the field development program, which
would see the construction of a 50,000 boe/d facility. The Nueva Esperanza-1
well, along the same structural trend as the Akacias field, spudded July 18 and
is drilling ahead. Additional wells are planned for 2015.  
In Block CPE-6, five appraisal wells continued on long-term test and averaged
approximately 500 bbls/d gross (250 bbls/d net to Talisman) in the second
quarter. Technical evaluation will continue through the remainder of the year
to determine future development plans. 
Southeast Asia liquids production from ongoing operations up 10% year-over-year 
/T/ 
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June 30                                            Q2 14     Q1 14     Q2 13
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Indonesia liquids (mbbls/d)                            7         6         6
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Indonesia gas (mmcf/d)                               408       386       385
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Indonesia (mboe/d)                                    74        71        72
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Malaysia liquids (mbbls/d)                            20        20        20
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Malaysia gas (mmcf/d)                                 99       124       124
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Malaysia (mboe/d)                                     37        40        40
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Vietnam liquids (mbbls/d)                             13        12         6
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Vietnam gas (mmcf/d)                                   5         8         4
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Vietnam (mboe/d)                                      14        14         7
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Australia (mboe/d)                                     3         3         7
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Total production from ongoing operations                                    
 (mboe/d)                                            128       128       126
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Assets sold or held for sale (mboe/d)(8)               3         3         4
----------------------------------------------------------------------------
Southeast Asia total (mboe/d)                        131       131       130
----------------------------------------------------------------------------
(8) Includes Northwest Java - sold May 2013, and Southeast Sumatra - sales   
agreement reached in December 2013.                                      
/T/ 
Total production in Southeast Asia averaged 131,000 boe/d in the quarter,
consistent with the previous period. Production from ongoing operations
averaged 128,000 boe/d, consistent with the previous quarter following stable
gas demand from Corridor in Indonesia and additional liquids production at
Kinabalu through successful infill drilling and improved uptime. This was
offset by lower gas production from PM-3 in Malaysia following the temporary
shut-in of an inter-field pipeline. Liquids production from ongoing operations
was 43,000 bbls/d, up 10% year-over-year. 
In Indonesia, production from ongoing operations averaged 74,000 boe/d, up over
both the same period last year and the previous quarter, with stable gas demand
and the completion of facility upgrade projects at Corridor in 2013. Two infill
wells at Corridor are expected to spud later this year. At the Tangguh LNG
project, the Fujian pricing contract (applicable to one-third of Tangguh sales)
was successfully renegotiated, resulting in a price increase for this year and
escalating annually through 2017. At Sakakemang, Talisman expects to begin a 2D
and 3D seismic program later this year and drill an exploration well in 2015. 
In Malaysia, production averaged 37,000 boe/d for the quarter, down 8% over the
previous quarter and the same period last year, after a partial shut-in of an
inter-field pipeline at PM-3 as a precautionary measure over potential
corrosion concerns. The pipeline returned to full capacity in June following
testing and is expected to remain in service through to its full replacement
planned for next year. Also at PM-3, a multi-well drilling campaign is ongoing,
with a follow-up appraisal well to a new oil pool discovery encountering an
18-metre oil column. Early in the third quarter, a two-week turnaround at PM-3
was successfully completed.  
At Kinabalu, production averaged 6,000 boe/d during the quarter, up 50% over
the prior period due to increased operating efficiency and a successful infill
drilling campaign. Drilling is currently underway on the sixth and final infill
well, with the first five wells adding over 6,000 boe/d of oil production.  
In Vietnam, production averaged 14,000 boe/d, up significantly over the prior
year following the startup of HST/HSD in May 2013. Due to high netbacks and
strong reservoir performance, the additional barrels Talisman is realizing
through its carry recovery will expire early in the third quarter of this year.
The company expects production post carry recovery to be approximately 9,000
boe/d, in line with its equity participation. In the Nam Con Son basin,
Talisman is planning to start the first of a two-well exploration program in
the second half of 2014 on the Red Emperor extension in Blocks 135 and 136. 
In Papua New Guinea (PNG), the government granted PDL10 and PL10 licenses
during the quarter, awarding regulatory approval to Talisman and its partners
to proceed with the Stanley liquids and domestic gas project. The first
development well spud in June and drilling is progressing. Elsewhere in PNG,
the Manta-1 well in PPL 426 tested at 42 mmcf/d in the Elevala sandstone, while
the NW Koko well tested at 48 mmscf/d in the Elevala sandstone and also flowed
oil from the Kimu sandstone. 
Algeria 
In Algeria, production averaged 12,000 boe/d during the second quarter, in line
with the previous quarter. Production was up 33% compared to the same period
last year with EMK commencing production in 2013, offset by production
restrictions imposed by the regulator last year.  
Other Operating Areas 
North Sea 
In the UK North Sea, Talisman's share of production was 19,500 boe/d, up
6% from the previous quarter and 12% on a year-over-year basis, largely due to
the restart of production from the Claymore platform in the middle of the first
quarter.  
In Norway, planned maintenance at Veslefrikk and Brage reduced production 12%
compared to the previous quarter, to 14,500 boe/d.  
Kurdistan Region of Iraq 
In the Topkhana Block, testing continues on the T-2 well and is expected to be
complete in the coming days. In the Kurdamir Block, Talisman continues to
evaluate next steps after the completion of the K-2 extended well test. 
Common Share and Preferred Share Dividend Declaration  
The company has declared a quarterly dividend on the company's common
shares of US$0.0675 per share. The dividend will be paid on September 30, 2014
to shareholders of record at the close of business on September 15, 2014. 
The company has also declared a quarterly dividend of C$0.2625 per share on its
Cumulative Redeemable Rate Reset First Preferred Shares, Series 1. The dividend
will be paid on September 30, 2014 to shareholders of record at the close of
business on September 15, 2014. 
Conference Call 
A conference call and webcast for investors, analysts and media will be held at
1 p.m. MT (3 p.m. ET), July 29, 2014 to discuss results. Participants will
include Hal Kvisle, Chief Executive Officer, and members of senior management.
A transcript of this call will be available on the Talisman Energy website at
www.talisman-energy.com. 
Talisman Energy Inc. is a global upstream oil and gas company, headquartered in
Canada. Talisman has two core operating areas: the Americas (North America and
Colombia) and Asia-Pacific. Talisman is committed to conducting business
safely, in a socially and environmentally responsible manner, and is included
in the Dow Jones Sustainability (North America) Index. Talisman is listed on
the Toronto and New York stock exchanges under the symbol TLM. Please visit our
website at www.talisman-energy.com. 
Forward-Looking Information 
This news release contains information that constitutes "forward-looking
information" or "forward-looking statements" (collectively
"forward-looking information") within the meaning of applicable
securities legislation. This forward-looking information includes, among
others, statements regarding: business strategy, priorities and plans; expected
production; expected capital spending; anticipated asset sales and/or joint
ventures, targeted value and timing of such sales, and expected use of
proceeds; planned drilling, spudding, seismic and other exploration and
development activities; expected timing of the Piedemonte processing plant,
expected expiry of carry at HST/HSD; and other expectations, beliefs, plans,
goals, objectives, assumptions, information and statements about possible
future events, conditions, results of operations or performance. The company
priorities and goals disclosed in this news release are objectives only and the
achievement of these objectives cannot be guaranteed.  
The factors or assumptions on which the forward-looking information is based
include: assumptions inherent in current guidance; projected capital investment
levels; the flexibility of capital spending plans and the associated sources of
funding; the successful and timely implementation of capital projects; the
continuation of tax, royalty and regulatory regimes; ability to obtain
regulatory and partner approval; commodity price and cost assumptions; and
other risks and uncertainties described in the filings made by the Company with
securities regulatory authorities. The Company believes the material factors,
expectations and assumptions reflected in the forward-looking information are
reasonable but no assurance can be given that these factors, expectations and
assumptions will prove to be correct. Forward-looking information for periods
past 2014 assumes escalating commodity prices. Closing of any transactions will
be subject to receipt of all necessary regulatory approvals and completion of
definitive agreements.  
Undue reliance should not be placed on forward-looking information.
Forward-looking information is based on current expectations, estimates and
projections that involve a number of risks which could cause actual results to
vary and in some instances to differ materially from those anticipated by
Talisman and described in the forward-looking information contained in this
news release. The material risk factors 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; risks and uncertainties
involving geology of oil and gas deposits; risks associated with project
management, project delays and/or cost overruns; uncertainty related to
securing sufficient egress and access to markets; the uncertainty of reserves
and resources estimates, reserves life and underlying reservoir risk; the
uncertainty of estimates and projections relating to production, costs and
expenses, including decommissioning liabilities; risks related to strategic and
capital allocation decisions, including 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, interest
rates and tax or royalty rates; the outcome and effects of any future
acquisitions and dispositions; health, safety, security and environmental
risks, including risks related to the possibility of major accidents;
environmental regulatory and compliance risks, including with respect to
greenhouse gases and hydraulic fracturing; uncertainties as to access to
capital, including the availability and cost of credit and other financing, and
changes in capital markets; risks in conducting foreign operations (for
example, civil, political and fiscal instability and corruption); risks related
to the attraction, retention and development of personnel; changes in general
economic and business conditions; the possibility that government policies,
regulations or laws may change or governmental approvals may be delayed or
withheld; and results of the Company's risk mitigation strategies,
including insurance and any hedging activities.  
The foregoing list of risk factors is not exhaustive. Additional information on
these and other factors which could affect the Company's operations or
financial results or strategy are included in Talisman's most recent
Annual Information Form. In addition, information is available in the
Company's other reports on file with Canadian securities regulatory
authorities and the United States Securities and Exchange Commission.
Forward-looking information is based on the estimates and opinions of the
Company's management at the time the information is presented. The Company
assumes no obligation to update forward-looking information should
circumstances or management's estimates or opinions change, except as
required by law.  
As used in the context of the Company's Colombian assets, long-term
testing indicates continuous well production going to market at the most recent
weekly average. A permit for long term testing is required for a well to
produce oil until the permit for full field development has been granted. 
Oil and Gas Information  
Throughout this news release, Talisman makes reference to production volumes.
Unless otherwise stated, such production volumes are stated on a gross basis,
which means they are stated on a Company interest basis prior to the deduction
of royalties and similar payments. In the US, net production volumes are
reported after the deduction of these amounts.  
Barrel of oil equivalent (boe) throughout this news release is calculated at a
conversion rate of six thousand cubic feet (mcf) of natural gas for one barrel
of oil (bbl). This news release also includes reference to mcf equivalents
(mcfes) which are calculated at a conversion rate of one barrel of oil to 6,000
cubic feet of gas. Boes and mcfes may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf:1 bbl and an mcfe conversion ratio
of 1 bbl: 6 mcf are based on an energy equivalence conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead.  
In this news release, all references to "core" and
"non-core" assets and properties align with the company's
current public disclosure regarding its assets and properties.  
Talisman also discloses netbacks in this news release. Netbacks per boe are
calculated by deducting from the sales price associated royalties, operating
and transportation costs.  
In this news release, Talisman discloses average cumulative well test results
for seven wells drilled into the Wilrich formation in Edson, Alberta, two wells
drilled into the Dunvegan formation in Edson, Alberta, and two wells drilled
into the Elevala sandstone formation in Papua New Guinea  
The production tests' actual flow period durations were approximately 30
days. The average rate of flow for the seven wells in the Wilrich formation was
approximately 5.5 mmcf/d of gas with 235 bbls/d of total liquids net to
Talisman The wells produced natural gas with an average 60 degrees API for
condensate. No significant production or pressure decline was observed on the
tests. The average rate of flow for the two wells in the Dunvegan formation was
approximately 5.1 mmcf/d of gas with 375 bbls/d of liquids net to Talisman. The
wells produced natural gas with an average 57 degrees API for condensate. No
significant production or pressure decline was observed on the tests. The
production tests in Papua New Guinea ran over a period of 9.4 days for Manta-1
and 8.7 days for NW Koko-1, with the main flow period durations being
approximately 2.5 days for Manta-1 and 2.6 days for NW Koko-1. The average rate
of flow for the wells during the main flow period was approximately 21 mmcf/d
for Manta-1 & 28 mmcf/d for NW Koko-1 of gas and approx. 0.04 bbls/mmcf of
condensate for Manta-1 and approx. 0.1 bbl/mmscf of condensate for NW Koko-1.
Manta-1 produced natural gas of 0.63 SG with an average 35 degrees API of
condensate. NW Koko-1 produced natural gas of 0.59 SG with an average 35
degrees API of condensate. No significant production or pressure decline was
observed on the tests. This data should be considered to be preliminary until a
pressure transient analysis and/or well-flow test interpretation has been done.
The test results are not necessarily indicative of long-term performance or
ultimate recovery.  
Non-GAAP Financial Measures  
Included in this news release are references to financial measures commonly
used in the oil and gas industry such as cash flow, earnings (loss) from
operations, capital spending and net debt. These terms are not defined by
International Financial Reporting Standards (IFRS). Consequently, these are
referred to as non-GAAP measures. Talisman's reported results of such
measures may not be comparable to similarly titled measures reported by other
companies.  
Cash Flow 
/T/ 
---------------------------------------------------------------------------- 
Three Months Ended                 
-------------------------------------------------- 
June 30, March 31,  December September  June 30,  
2014      2014  31, 2013  30, 2013      2013 
----------------------------------------------------------------------------
Cash provided by operating                                                  
 activities                     365       471       442       637       357 
----------------------------------------------------------------------------
Changes in non-cash                                                         
 working capital                167       104        80      (166)       61 
----------------------------------------------------------------------------
Add: Exploration                                                            
 expenditure                     57        52        52        66        67 
----------------------------------------------------------------------------
Add: Restructuring costs         14         3        10         6        11 
----------------------------------------------------------------------------
Add: Income tax                                                             
 adjustments(1)                   -         -         -         -        15 
----------------------------------------------------------------------------
Add: Current tax on                                                         
 disposal(2)                      -         -        51         -         - 
----------------------------------------------------------------------------
Less: Dividends and                                                         
 distributions received                                                     
 from equity-accounted                                                      
 entities                         -         -       (21)      (37)        - 
----------------------------------------------------------------------------
Less: Finance costs (cash)      (76)      (76)      (77)      (77)      (71)
----------------------------------------------------------------------------
Cash flow from                                                              
 subsidiaries                   527       554       537       429       440 
----------------------------------------------------------------------------
Add: Cash provided by                                                       
 operating activities from                                                  
 equity-accounted entities       82       (26)       58        86       124 
----------------------------------------------------------------------------
Change in non-cash working                                                  
 capital from equity-                                                       
 accounted entities             (34)       93        (9)       54       (38)
----------------------------------------------------------------------------
Add: Exploration                                                            
 expenditure from equity-                                                   
 accounted entities               1         2         -        11         5 
----------------------------------------------------------------------------
Less: Finance costs (cash)                                                  
 from equity-accounted                                                      
 entities                        (9)       (7)       (6)       (7)       (5)
----------------------------------------------------------------------------
Cash flow from equity-                                                      
 accounted entities              40        62        43       144        86 
----------------------------------------------------------------------------
Cash Flow(3)                    567       616       580       573       526 
----------------------------------------------------------------------------
Cash flow per share            0.55      0.60      0.56      0.56      0.51 
----------------------------------------------------------------------------
Diluted cash flow per                                                       
 share                         0.55      0.59      0.56      0.55      0.51 
---------------------------------------------------------------------------- 
1.  A court ruling in Southeast Asia indicated an additional current income 
tax of $31 million be charged during Q2 2013. In addition, the company 
recorded a $16 million benefit from the resolution of a tax position in 
North America in Q2 2013. 
2.  Current tax on the gain on disposal of Talisman's equity interest in the 
Ocensa pipeline in Colombia in Q4 2013. 
3.  Includes cash flow from subsidiaries and Talisman's share of equity-    accounted entities' cash flow.  
/T/ 
Cash flow, as commonly used in the oil and gas industry, represents net income
before exploration costs, DD&A, deferred taxes and other non-cash expenses,
including Talisman's share of cash flow from equity- accounted entities.
Cash flow is used by the company to assess operating results between years and
between peer companies using 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 determined in
accordance with IFRS as an indicator of the company's performance or
liquidity. Cash flow per share is cash flow divided by the average number of
common shares outstanding during the period. Diluted cash flow per share is
cash flow divided by the diluted number of common shares outstanding during the
period, as reported in the interim condensed Consolidated Financial Statements
filed on July 29, 2014. A reconciliation of cash provided by operating
activities to cash flow is provided above. 
Capital Spending  
/T/ 
---------------------------------------------------------------------------- 
Three Months Ended          
------------------------------------ 
June 30,   March 31,    June 30, 
2014        2014        2013
----------------------------------------------------------------------------
Subsidiaries                                                                
----------------------------------------------------------------------------
Exploration, development and other               470         547         649
----------------------------------------------------------------------------
Exploration expensed                              57          52          67
----------------------------------------------------------------------------
Exploration and development spending -                                      
 subsidiaries                                    527         599         716
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Talisman's share of equity- accounted                                       
 entities                                                                   
----------------------------------------------------------------------------
Exploration, development and other               196         167         122
----------------------------------------------------------------------------
Exploration expensed                               1           2           5
----------------------------------------------------------------------------
Exploration and development spending -                                      
 joint ventures                                  197         169         127
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Capital spending for subsidiaries and                                       
 joint ventures                                  724         768         843
---------------------------------------------------------------------------- 
/T/ 
Capital spending is calculated by adjusting the capital expenditure per the
interim condensed Consolidated Financial Statements for exploration costs that
were expensed as incurred and adding Talisman's share of joint ventures. 
Earnings (loss) from Operations  
/T/ 
---------------------------------------------------------------------------- 
Three Months Ended          
------------------------------------ 
June 30,   March 31,    June 30,  
2014        2014        2013 
----------------------------------------------------------------------------
Net income (loss)                              (237)        491          97 
----------------------------------------------------------------------------
Gain on disposals (tax adjusted)                 (1)       (486)        (45)
----------------------------------------------------------------------------
Unrealized (gain) loss on financial                                         
 instruments(tax adjusted)(1)                   120           1        (193)
----------------------------------------------------------------------------
Share-based payments (tax adjusted)(2)           15         (32)         (4)
----------------------------------------------------------------------------
Foreign exchange on debt (tax adjusted)          10           3           4 
----------------------------------------------------------------------------
Impairment (tax adjusted)                        39         107           7 
----------------------------------------------------------------------------
Restructuring costs (tax adjusted)               14           2           8 
----------------------------------------------------------------------------
Income tax adjustment(3)                          -           -          41 
----------------------------------------------------------------------------
Derecognition of deferred tax asset(4)            6           -           - 
----------------------------------------------------------------------------
Deferred tax adjustments(5)                      25          (7)         58 
----------------------------------------------------------------------------
Earnings (loss) from operations(6)               (9)         79         (27)
---------------------------------------------------------------------------- 
1.  Unrealized (gain) loss on financial instruments relates to the change in 
the period of the mark-to-market value of the Company's held-for-trading 
financial instruments. 
2.  Share-based payments relates to the mark-to-market value of the 
Company's outstanding stock options and cash units at June 30.  The 
Company's share-based payments expense is based on the difference 
between the Company's share price and its stock options or cash units 
exercise price. The Company uses the Black-Scholes option pricing model 
to estimate the fair value of its share-based payment plans.           
3.  A court ruling in Southeast Asia indicated an additional income tax of 
$57 million be charged during Q2 2013. In addition, the company recorded 
a $16 million benefit from the resolution of a tax position in North 
America in Q2 2013. 
4.  During Q2 2014, the Company derecognized deferred tax assets in 
Australia. 
5.  Deferred tax adjustments largely comprise tax on foreign exchange on tax 
pools.        
6.  Earnings (loss) from operations include results and adjustments from 
subsidiaries and Talisman's share of equity accounted entities.          
/T/ 
Earnings (loss) from operations are calculated by adjusting the company's
net income (loss) per the interim condensed Consolidated Financial Statements
for certain items of a non-operational nature, on an after-tax basis. The
adjustments include items from subsidiaries and Talisman's share of equity
accounted entities. The company uses this information to evaluate performance
of core operational activities on a comparable basis between periods. A
reconciliation of net income (loss) to earnings (loss) from operations is
provided above. 
Net Debt  
/T/ 
---------------------------------------------------------------------------- 
As at                              
-------------------------------------------------- 
June 30,   March 31,  December 31,   June 30,   
2014        2014          2013        2013 
----------------------------------------------------------------------------
Long-term debt                  4,690       4,365         5,239       4,923 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 net of bank indebtedness        (352)       (515)         (351)       (232)
----------------------------------------------------------------------------
Cash and cash equivalents                                                   
 from equity accounted                                                      
 entities(1)                                                                
----------------------------------------------------------------------------
  TSEUK                           (47)          5           (21)        (41)
----------------------------------------------------------------------------
  Equion                          (64)        (42)          (34)        (60)
----------------------------------------------------------------------------
Total net debt                  4,227       3,813         4,833       4,590 
---------------------------------------------------------------------------- 
1.  Includes Talisman's share of equity-accounted entities' cash and cash 
equivalents.  
/T/ 
Net debt is calculated by adjusting the company's long-term debt per the
interim condensed Consolidated Financial Statements for bank indebtedness, cash
and cash equivalents from subsidiaries and joint ventures. The company uses
this information to assess its true debt position and eliminate the impact of
timing differences. 
Sensitivities  
Talisman's financial performance is affected by factors such as changes in
production volumes, commodity prices and exchange rates. The estimated
annualized impact of these factors for 2014 (excluding the effect of derivative
contracts) is summarized in the following table, based on a Dated Brent oil
price of approximately $105/bbl, a NYMEX natural gas price of approximately
$4.45/mmbtu and exchange rates of US$0.90=C$1 and UKGBP 1=US$1.65. 
/T/ 
---------------------------------------------------------------------------- 
Cash Provided                 
by Operating                 
Activities      Cash Flow 
(millions of $)                 Net Income(1)       (GAAP(2))  (Non-GAAP(3))
----------------------------------------------------------------------------
Volume changes                                                              
----------------------------------------------------------------------------
Oil - 10,000 bbls/d                        70            135            190 
----------------------------------------------------------------------------
Natural gas - 60 mmcf/d                    15             65             65 
----------------------------------------------------------------------------
Price changes(4)                                                            
----------------------------------------------------------------------------
Oil - $1.00/bbl                            20              5             30 
----------------------------------------------------------------------------
Natural gas (North America)(5)                                              
 - $0.10/mcf                               15              5             25 
----------------------------------------------------------------------------
Exchange rate changes                                                       
----------------------------------------------------------------------------
US$/C$ decreased by US$0.01                (5)            (5)            (5)
----------------------------------------------------------------------------
US$/UKGBP  increased by US$0.02             -              -              5 
---------------------------------------------------------------------------- 
1.  Net income includes Talisman's share of net income (loss) from TSEUK and 
Equion, after tax. 
2.  Changes in cash flow provided by operating activities (GAAP) excludes 
TSEUK and Equion due to the application of equity accounting. 
3.  Changes in cash flow (Non-GAAP) includes TSEUK and Equion and is 
included for comparative purposes only. 
4.  The impact of price changes excludes the effect of commodity 
derivatives. See specific commodity derivative terms in the 'Risk 
Management' section of the MD&A, and note 16 to the interim condensed 
Consolidated Financial Statements filed on July 29, 2014. 
5.  Price sensitivity on natural gas relates to North American natural gas 
only. The company's exposure to changes in the natural gas prices in 
Norway and Malaysia/Vietnam and Colombia is not material. Most of the 
natural gas price in Indonesia is based on the price of crude oil and, 
accordingly, has been included in the price sensitivity for oil except 
for a small portion which is sold at a fixed price.  
Talisman Energy Inc.                             
Highlights                                  
(unaudited)                                  
Three months ended       Six months ended  
June 30                June 30  
2014         2013        2014       2013 
----------------------------------------------------------------------------
Financial                                                                   
(millions of US$ unless                                                     
 otherwise stated)                                                          
Cash flow (1)                       567          526       1,183      1,043 
Net income (loss)                  (237)          97         254       (116)
Capital Spending (1)                724          843       1,492      1,618 
Per common share (US$)                                                      
  Cash flow (1)                    0.55         0.51        1.15       1.01 
  Net income (loss)               (0.23)        0.09        0.24      (0.12)
----------------------------------------------------------------------------
Production (3)                                                              
(Daily Average - Gross)                                                     
Oil and liquids (bbls/d)                                                    
  North America                  44,776       32,675      43,310     30,785 
  Southeast Asia                 44,963       43,116      44,521     42,115 
  North Sea                      30,872       29,506      31,542     33,364 
  Other                          24,949       20,251      24,400     21,016 
----------------------------------------------------------------------------
Total oil and liquids           145,560      125,548     143,773    127,280 
----------------------------------------------------------------------------
Natural gas (mmcf/d)                                                        
  North America                     795          846         831        861 
  Southeast Asia                    515          519         518        525 
  North Sea                          22            6          19         11 
  Other                              48           43          47         41 
----------------------------------------------------------------------------
Total natural gas                 1,380        1,414       1,415      1,438 
----------------------------------------------------------------------------
Total mboe/d (2)                    375          361         380        367 
----------------------------------------------------------------------------
Prices (3)                                                                  
Oil and liquids (US$/bbl)                                                   
  North America                   66.11        65.84       67.04      64.92 
  Southeast Asia                 110.99       101.07      110.67     106.54 
  North Sea                      108.61       103.34      107.61     108.68 
  Other                          105.02        94.78      103.63     106.24 
----------------------------------------------------------------------------
Total oil and liquids             95.66        91.42       95.66      96.99 
----------------------------------------------------------------------------
Natural gas (US$/mcf)                                                       
  North America                    4.35         3.92        4.62       3.62 
  Southeast Asia                   8.94         9.51        9.04       9.87 
  North Sea                        7.51        24.01        8.30      13.87 
  Other                            3.88         4.11        3.99       4.37 
----------------------------------------------------------------------------
Total natural gas                  6.10         6.06        6.27       6.00 
----------------------------------------------------------------------------
Total (US$/boe) (2)               59.49        55.50       59.58      57.14 
---------------------------------------------------------------------------- 
(1) Cash flow, capital spending and cash flow per share are non-GAAP         
measures.                                                               
(2) 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.     
(3) Production and realized prices include Talisman's proportionate results  
from Talisman Sinopec Energy UK Limited (TSEUK) and Equion Energia       
Limited (Equion).                                                        
Talisman Energy Inc.                             
Consolidated Balance Sheets                         
(Unaudited)                                 
June 30,   December 31,
(millions of US$)                                        2014           2013
---------------------------------------------------------------------------- 
Assets                                                                      
Current                                                                     
  Cash and cash equivalents                               356            364
  Accounts receivable                                   1,060          1,117
  Risk management                                          22             17
  Income and other taxes receivable                        57             52
  Restricted cash                                         125            121
  Inventories                                             175            137
  Prepaid expenses                                         26             14
  Assets held for sale                                    134            776
---------------------------------------------------------------------------- 
1,955          2,598
----------------------------------------------------------------------------
Other assets                                              184            160
Restricted cash                                            61             94
Investments                                             1,535          1,204
Risk management                                            16             20
Goodwill                                                  568            575
Property, plant and equipment                           9,603          9,752
Exploration and evaluation assets                       3,138          3,165
Deferred tax assets                                     1,694          1,593
---------------------------------------------------------------------------- 
16,799         16,563
----------------------------------------------------------------------------
Total assets                                           18,754         19,161
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Liabilities                                                                 
Current                                                                     
  Bank indebtedness                                         4             13
  Accounts payable and accrued liabilities              1,652          1,835
  Current portion of Yme removal obligation               125            121
  Risk management                                         180            101
  Income and other taxes payable                           94            155
  Loans from joint ventures                               306            288
  Current portion of long-term debt                       696            882
  Liabilities associated with assets held for                                
sale                                                    57            160
---------------------------------------------------------------------------- 
3,114          3,555
----------------------------------------------------------------------------
Decommissioning liabilities                             1,824          1,727
Yme removal obligation                                     98            131
Other long-term obligations                               270            246
Risk management                                            86             37
Long-term debt                                          3,994          4,357
Deferred tax liabilities                                  681            553
---------------------------------------------------------------------------- 
6,953          7,051
----------------------------------------------------------------------------
Shareholders' equity                                                        
Common shares                                           1,759          1,723
Preferred shares                                          191            191
Contributed surplus                                       124            135
Retained earnings                                       5,802          5,695
Accumulated other comprehensive income                    811            811
---------------------------------------------------------------------------- 
8,687          8,555
----------------------------------------------------------------------------
Total liabilities and shareholders' equity             18,754         19,161
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Talisman Energy Inc.                             
Consolidated Statements of Income (Loss)                   
(Unaudited)                                  
Three months ended       Six months ended     
June 30,                June 30,         
(millions of US$)                  2014        2013        2014        2013 
---------------------------------------------------------------------------- 
Revenue                                                                     
  Sales                           1,248       1,152       2,535       2,250 
  Other income                       31          15          79          42 
  Income (loss) from joint                                                   
ventures and associates,                                                  
after tax                        (37)         23         (31)         21 
----------------------------------------------------------------------------
Total revenue and other                                                     
 income                           1,242       1,190       2,583       2,313 
---------------------------------------------------------------------------- 
Expenses                                                                    
  Operating                         351         381         712         710 
  Transportation                     44          51          93         102 
  General and administrative        105         111         210         214 
  Depreciation, depletion                                                    
and amortization                 480         464         949         885 
  Impairment (impairment                                                     
reversals)                        28          (9)        158          (2)
  Dry hole                           12          69          28          69 
  Exploration                        57          67         109         142 
  Finance costs                      90          79         181         157 
  Share-based payments                                                       
expense (recovery)                25           2          (7)         24 
  (Gain) loss on held-for-                                                   
trading financial                                                         
instruments                      171        (221)        231        (141)
  (Gain) loss on disposals            5         (59)       (554)        (59)
  Other, net                         37          18          45          24 
----------------------------------------------------------------------------
Total expenses                    1,405         953       2,155       2,125 
----------------------------------------------------------------------------
Income (loss) before taxes         (163)        237         428         188 
----------------------------------------------------------------------------
Income taxes                                                                
  Current income tax                129         139         260         286 
  Deferred income tax                                                        
(recovery)                       (55)          1         (86)         18 
---------------------------------------------------------------------------- 
74         140         174         304 
----------------------------------------------------------------------------
Net income (loss)                  (237)         97         254        (116)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Per common share (US$):                                                     
  Net income (loss)               (0.23)       0.09        0.24       (0.12)
  Diluted net income (loss)       (0.24)       0.06        0.19       (0.14)
----------------------------------------------------------------------------
Weighted average number of                                                  
 common shares outstanding                                                  
 (millions)                                                                 
  Basic                           1,034       1,030       1,033       1,029 
  Diluted                         1,034       1,033       1,039       1,033 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
/T/ 
/T/ 
Talisman Energy Inc.                             
Consolidated Statements of Cash Flows                     
(Unaudited)                                  
Three months ended       Six months ended     
June 30,                June 30,        
(millions of US$)                  2014        2013        2014        2013 
----------------------------------------------------------------------------
Operating activities                                                        
Net income (loss)                  (237)         97         254        (116)
Add: Finance costs (cash and                                                
 non-cash)                           90          79         181         157 
Items not involving cash            679         242         672         729 
---------------------------------------------------------------------------- 
532         418       1,107         770 
Changes in non-cash working                                                 
 capital                           (167)        (61)       (271)        (82)
----------------------------------------------------------------------------
Cash provided by operating                                                  
 activities                         365         357         836         688 
----------------------------------------------------------------------------
Investing activities                                                        
Capital expenditures                                                        
  Exploration, development                                                   
and other                       (470)       (649)     (1,017)     (1,218)
Proceeds of resource                                                        
 property dispositions               52          99       1,392          99 
Yme removal obligation               13          (7)         29         275 
Restricted cash                     (13)          7         (29)       (238)
Investments                           -           -           -          (7)
Loan to joint venture              (178)        (19)       (350)        (89)
Changes in non-cash working                                                 
 capital                            (92)        (31)        (42)       (115)
----------------------------------------------------------------------------
Cash used in investing                                                      
 activities                        (688)       (600)        (17)     (1,293)
---------------------------------------------------------------------------- 
Financing activities                                                        
Long-term debt repaid                (2)         (4)       (879)         (4)
Long-term debt issued               315         416         315         509 
Loans from (repayments to)                                                  
 joint ventures                       -         (61)         18          49 
Common shares issued                  -           1           4          17 
Finance costs (cash)                (76)        (71)       (152)       (141)
Common share dividends              (70)        (68)       (140)       (138)
Preferred share dividends            (2)         (2)         (4)         (4)
Deferred credits and other           (6)         (6)          1         (15)
Changes in non-cash working                                                 
 capital                             (2)         (7)         13          11 
----------------------------------------------------------------------------
Cash provided by (used in)                                                  
 financing activities               157         198        (824)        284 
----------------------------------------------------------------------------
Effect of translation on                                                    
 foreign currency cash and            3           1           6           - 
 cash equivalents                                                           
----------------------------------------------------------------------------
Net increase (decrease) in                                                  
 cash and cash equivalents         (163)        (44)          1        (321)
Cash and cash equivalents                                                   
 net of bank indebtedness,          515         276         351         553 
 beginning of period                                                        
----------------------------------------------------------------------------
Cash and cash equivalents                                                   
 net of bank indebtedness,          352         232         352         232 
 end of period                                                              
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Cash and cash equivalents           356         270         356         270 
Bank indebtedness                    (4)        (38)         (4)        (38)
----------------------------------------------------------------------------
Cash and cash equivalents                                                   
 net of bank indebtedness,                                                  
 end of period                      352         232         352         232 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
/T/ 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Talisman Energy Inc. - Media and General Inquiries:
Brent Anderson
Manager, External Relations
403-237-1912
tlm@talisman-energy.com
or
Talisman Energy Inc. - Shareholder and Investor Inquiries:
Lyle McLeod
Vice-President, Investor Relations
403-767-5732
tlm@talisman-energy.com 
INDUSTRY:  Energy and Utilities - Oil and Gas  
SUBJECT:  ERN 
-0-
-0- Jul/29/2014 09:00 GMT
 
 
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