Talisman Energy Expects Significant Production Growth in 2006; $5.2-$5.6 Billion in Cash Flow; $4.4 Billion in Exploration and Development Spending.CALGARY, Alberta -- Talisman Energy Talisman Energy TSX: TLM is one of Canada's largest petroleum companies. It was originally part of British Petroleum, known as BP Canada, but in 1992 it became an independent company named Talisman Energy. Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :TLM TLM Telemetry TLM Transaction Level Modeling TLM Tout Le Monde (French) TLM The Leprosy Mission (Northern Ireland) TLM Transmission Line Matrix TLM The Little Mermaid (fairy tale) ) (NYSE NYSE See: New York Stock Exchange :TLM) plans to spend $4.4 billion on exploration and development in 2006, representing an increase of approximately 36% over 2005 (1). North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and the North Sea account for more than 80% of expected spending. Looking forward, Talisman talisman: see amulet. talisman amulet with which Saladin cures Richard the Lion-Hearted. [Br. Lit.: The Talisman] See : Charms believes it can deliver growth at the upper end of its targeted 5-10% production per share range through 2008. Production in 2006 is estimated to average between 515,000-545,000 boe/d. This represents growth of 11-18% relative to 2005, excluding any Paladin Paladin archetypal gunman who leaves a calling card. [TV: Have Gun, Will Travel in Terrace, I, 341] See : Wild West volumes in 2005. The Paladin acquisition was initially expected to close late in the year but is now anticipated to add 5,000-6,000 boe/d of production (annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis) in 2005. Including these Paladin volumes, growth relative to 2005 is expected to be in the 10-16% range. The Company intends to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose some 10,000-15,000 boe/d of production from non-core assets in Western Canada
Western Canada, commonly referred to as the West and the North Sea early in 2006. Once the impact of these sales is known, subsequent production and financial guidance for 2006 will be updated. Talisman expects to generate approximately $5.2-$5.6 billion in cash flow (2) in 2006, based on a US$57/bbl WTI WTI West Texas Intermediate WTI Western Transportation Institute (Montana State University) WTI World Tribunal on Iraq WTI With The Idea (used in chess to point to the idea behind a specific move) oil price, a US$9.00/mmbtu NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). natural gas price and a US$/C$ exchange rate of $0.84. Additional guidance details and sensitivities are included in tables later in this news release. The Company plans to release its 2005 results on March 1, 2006. "Talisman has a very attractive opportunity set which is reflected in our 2006 capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. program," said Dr. Jim Buckee, President and Chief Executive Officer. "The Paladin acquisition has gone smoothly and adds significantly to both production and drilling opportunities in 2006 and beyond. We have assumed that commodity prices will be relatively flat in 2006 with continued demand growth. Even so, we expect upwards of 15% growth in cash flow, well in excess of anticipated capital spending. "Our inventory of investment opportunities should generate approximately 10% production growth annually through 2008. In North America, we expect to drill 685 gross wells in 2006 with large programs in the Alberta Foothills, Bigstone/Wild River, Edson, the Deep Basin, Appalachia and Monkman areas. We expect to grow our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. gas production by at least 3-5% annually over the next three years through the drill bit. "We have a significant program in the North Sea next year, led by the 45,000 bbls/d Tweedsmuir development which is expected to be onstream at the end of the first quarter of 2007. In addition, we are planning to drill 63 gross wells, including 18 exploration wells. "Our major project in Malaysia/Vietnam will be the Northern Fields development on Block PM-3 CAA Caa See CCC. , with first production in 2008. We also have seven exploration wells planned including our first well on Block 15-2/01 offshore Vietnam. "The Corridor expansion project is on schedule for first gas deliveries to West Java West Java (Indonesian: :Jawa Barat) is a province of Indonesia, located on the island of Java. The capital is Bandung. History in the first quarter of 2007. We expect Talisman's Indonesian gas production to increase from approximately 175 mmcf/d in 2005 to over 300 mmcf/d in 2008. "Elsewhere, phase two expansion of the MLN MLN Million MLN Modern Language Notes (literary journal) MLN Management & Leadership Network (Northern Ireland) MLN Missouri League for Nursing MLN Main Listed Number facilities in Algeria is proceeding, with an expected onstream date late in 2007. In Trinidad, we are currently drilling our first onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. exploration well with plans for two to three additional wells in 2006. We are drilling our first offshore exploration well in Qatar and plan two additional wells next year. Talisman is also evaluating additional drilling in Peru to follow up on our recent oil discovery. "In summary, we expect to continue to deliver strong production, drilling and financial results. Talisman has a visible growth profile going forward. We anticipate record cash flow again in 2006. Our balance sheet is strong and we have world class exploration opportunities." 2006 GUIDANCE (3) Talisman expects to generate cash flow of $14.25-15.25/share in 2006, based on the mid-point of the production guidance range. This is a 12-20% increase over the estimated 2005 figure, without additional share buy backs in 2006. Production in 2006 is expected to average between 515,000-545,000 boe/d, with most of the increase over 2005 coming from the North Sea and Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. . Talisman believes it can achieve average compound production per share growth of approximately 10% per annum Per annum Yearly. between 2005 and 2008. Talisman has budgeted approximately $4.4 billion in exploration and development spending in 2006, up 36% over 2005. Approximately one-third of this increased spending is on the Paladin assets and the remainder is due to an increased work scope and some cost inflation. Approximately $2.1 billion (48% of the budget) will be spent drilling 685 domestic and 136 international exploration and development wells. The other major budget items are plant and equipment ($1.7 billion) and land/G&G ($450 million). Exploration and development spending in North America is estimated at $2 billion (45% of total Company spending). Over 90% of conventional North American spending will be directed towards natural gas exploration and development. Capital spending in the North Sea is expected to increase to about $1.6 billion in 2006. Exploration activity remains centered on prospects in the central North Sea and the Norwegian Continental Shelf The Norwegian continental shelf is the continental shelf over which Norway exercises sovereign rights as defined by the United Nations Convention on the Law of the Sea. Its major parts are the shelves of the North Sea, Norwegian Sea and Barents Sea, with the sector line in the . In SE Asia, spending will increase with expansion of the gas processing facility in the Corridor Block in Indonesia. In addition, spending in Malaysia and Vietnam is expected to total approximately $350 million, including commencement of the Northern Fields development project on Block PM-3 CAA. Algerian spending will increase with expansion of the MLN facilities. Spending in Trinidad will be directed at exploration with one offshore and up to three onshore wells planned. Royalty rates are expected to average between 15-17%. Unit operating costs operating costs npl → gastos mpl operacionales (including transportation) are forecast at $9.35-$10.45/boe. An effective income tax rate of between 42-48% is expected (calculated on income after PRT PRT Print PRT Port PRT Portugal (ISO country code) PRT Printer PRT Provincial Reconstruction Team (Iraq) PRT Personal Rapid Transit PRT Personal Rapid Transit expense which is deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). for income tax purposes). Cash and future income tax estimates incorporate the 10% UK tax rate increase effective January 1, 2006; however, future tax estimates exclude an estimated one-time non-cash income tax charge of approximately $300 million associated with the rate increase which the Company expects to book in the first quarter of 2006. This one-time charge relates to years prior 2006 and will not be reflected in Earnings from Operations. Unit G&A is expected to fall slightly to $1.13/boe. As a result of increased debt in conjunction with the Paladin acquisition, interest expense is estimated to increase to approximately $280 million in 2006, of which approximately $70 million is expected to be capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. . Talisman Energy Inc. is a large, independent oil and gas producer with operations in Canada and, through its subsidiaries, the North Sea, Indonesia, Malaysia, Vietnam, Australia, Algeria, Trinidad and Tobago Trinidad and Tobago (trĭn`ĭdăd, təbā`gō), officially Republic of Trinidad and Tobago, republic (2005 est. pop. 1,088,000), 1,980 sq mi (5,129 sq km), West Indies. The capital is Port of Spain. , Tunisia and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Talisman's subsidiaries also conduct business in Colombia, Qatar, Peru, Romania and Gabon. Talisman has adopted the International Code of Ethics Code of Ethics can refer to:
The extent to which businesses are socially responsible in meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim it to create higher standards of living and quality of life in the community in which it operates, while and social and environmental responsibility wherever its business is conducted. The Company is a participant in the United Nations Global Compact, a voluntary initiative that brings together companies, governments, civil society and other groups to advance human rights, labour and environmental principles. Talisman's shares are listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. in Canada and the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. in the United States under the symbol TLM. (1) Readers are cautioned that this news release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Please see "Forward-looking Statements" and "Corporate Guidance Assumptions" below. (2) The term "cash flow" is a non-GAAP measure, please see the Non-GAAP Financial Measures advisory below. (3) The forward-looking statements set forth above and under "2006 Guidance" are based on assumptions and factors set out at the end of the news release. 25-05 Financial Information All dollar amounts are stated in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents , except where otherwise indicated. Unless otherwise indicated below, the Canadian financial information included in this news release is set out in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , which differs from generally accepted accounting principles in the U.S. See the notes to the Company's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for information concerning significant differences between Canadian and U.S. generally accepted accounting principles. Non-GAAP Financial Measures Cash flow per share is one measure used by the Company to assess operating results. Cash flow per share is not defined by Canadian or US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and as such does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by Canadian or US GAAP. Cash flow per share may not be comparable to similarly titled measures reported by other companies. Cash flow per share should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities per share or net income per share as determined in accordance with Canadian or US GAAP as an indicator of the Company's performance or liquidity. Cash flow per share as presented in this news release has been calculated on a consistent basis for the year ended December 31, 2005 and the year ending December 31, 2006. This news release does not include an estimate of the 2005 net income per share as it is not practicable practicable adj. when something can be done or performed. to do so at this time. Forward-looking Statements This news release contains statements concerning future projects and growth, anticipated cash flow and cash flow per share, estimated volumes and timing of future production, business plans for exploration, development and drilling, anticipated budget costs for items including drilling, plant and equipment and land/G&G costs, or other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about future events, conditions, results of operations or performance that constitute "forward-looking statements" within the applicable securities legislation. Undue reliance should not be placed on forward-looking statements. 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 the Company and described in the forward-looking statements. These risks and uncertainties include: - the ability of management to execute the business plan which forms the basis for this news release; - 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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; - health, safety and environmental risks; - uncertainties as to the availability and cost of financing; - uncertainties related to the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. process, such as possible discovery of new evidence or acceptance of novel legal theories and the 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 Unrest is a sociological phenomenon, for instance:
- general economic conditions; - the effect of acts of, or actions against international terrorism Noun 1. international terrorism - terrorism practiced in a foreign country by terrorists who are not native to that country act of terrorism, terrorism, terrorist act - the calculated use of violence (or the threat of violence) against civilians in order to attain ; and - the possibility that government policies or laws may change or governmental approvals may be delayed or withheld. The completion of contemplated asset dispositions discussed in this news release is contingent on Adj. 1. contingent on - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent upon, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent various factors including favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market conditions, the ability of the Company to negotiate acceptable terms of sale Terms of sale Conditions under which a firm proposes to sell its goods or services for cash or credit. and receipt of any required approvals for such dispositions. We caution that the foregoing list of risks and uncertainties is not exhaustive. Events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. Additional information on these and other factors, which could affect the Company's operations or financial results, are included in the Company's Annual Report under the headings "Management's Discussion and Analysis- Risks and Uncertainties", "- Liquidity and Capital Resources", and "- Outlook for 2005", as well as in the Company's other reports on file with Canadian securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and the United States Securities and Exchange Commission. Forward-looking statements are based on the estimates and opinions of the Company's management at the time the statements are made. The Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Advisory - Oil and Gas Information Throughout this news release, 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 U.S., net production volumes are reported after the deduction of these amounts. Throughout this report, 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 ration a fixed allowance of total feed for an animal for one day. Usually specifies the individual ingredients and their amounts and the amounts of the specific nutriments such as carbohydrate, fiber, individual minerals and vitamins. of 6 mcf:1 bbl is based on an energy equivalence conversion method primarily applicable at the burner A drive that writes write-once optical discs such as CD-Rs and DVD-Rs. A "burner" implies a one-time recording, but the term is erroneously used to refer to drives that "write" to re-recordable CD-RW and DVD-RW/+RW media as well. See burn, CD-R and DVD-R. tip and does not represent a value equivalence at the wellhead well·head n. 1. The source of a well or stream. 2. A principal source; a fountainhead. 3. The structure built over a well. wellhead Noun 1. . You may read any document Talisman furnishes to the SEC at the SEC's public reference rooms at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and 500 West Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. Street, Suite 1400, Chicago, Illinois 60661. You may also obtain copies of the same documents from the public reference room of the SEC at 450 Fifth Street, N.W., Washington D.C. 20549 by paying a fee. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Talisman Corporate Guidance Assumptions(1) These Corporate Guidance Assumptions set forth the material assumptions that form the basis for the forward-looking information set forth in the December 19, 2005 news release and certain material factors that could cause actual results to materially differ from the forward-looking information.
Daily Production Volumes (Before Royalties)
FY 2006
-------------------
Oil & NGL (bbls/d)
North America (2) 54,000 - 56,000
United Kingdom (3) 109,000 - 113,000
Norway (3) 45,000 - 49,000
Indonesia 11,000 - 13,000
Malaysia/Vietnam 36,000 - 38,000
North Africa (4) 16,000 - 18,000
Trinidad 7,000 - 9,000
Australia 6,000 - 8,000
-------------------
284,000 - 304,000
Natural Gas (mmcf/d)
North America 935 - 955
United Kingdom (3) 135 - 140
Norway (3) 10 - 15
Indonesia 190 - 210
Malaysia/Vietnam 115 - 125
-------------------
1,385 - 1,445
Total mboe/d (6mcf equals 1boe) 515 - 545
Capital Expenditures (C$ millions)(5)
North America 1,985
United Kingdom (3) 1,210
Norway (3) 405
Indonesia 85
Malaysia / Vietnam 350
North Africa (4) 65
Trinidad 65
Australia 5
Other International 230
Corporate 40
Acquisitions (net) 20
-------
Total 4,460
Average Cost Data (5)
FY 2006
-------------------------------------------
Unit
Royalty Unit Op Transport
Rate (%) Costs Costs (7)
-------------------------------------------
Oil & Liquids (C$per bbl)
North America (6) 20% - 22% 7.55 - 8.50 0.53 - 0.57
United Kingdom (3) 1% 15.65 - 17.60 1.84 - 1.98
Norway (3) 0.5% 14.80 - 16.70 1.50 - 1.60
Indonesia 55% - 59% 8.30 - 9.35 0.80 - 0.86
Malaysia/Vietnam 33% - 37% 3.10 - 3.50 nil
North Africa (4) 36% - 40% 3.10 - 3.50 1.51 - 1.62
Trinidad 13% - 15% 3.90 - 4.40 nil
Australia nil 4.70 - 5.30 nil
-------------------------------------------
Natural Gas (C$per mcf)
North America 19% - 22% 0.87 - 0.98 0.22 - 0.24
United Kingdom (3) 4% - 6% 0.60 - 0.65 0.56 - 0.60
Norway (3) nil 2.55 - 2.85 0.23 - 0.25
Indonesia 29% - 33% 0.37 - 0.43 0.57 - 0.61
Malaysia/Vietnam 22% - 24% 0.15 - 0.17 nil
-------------------------------------------
(C$per boe)
Average Total 15% - 17% 7.95 - 8.95 1.40 - 1.50
-------------------------------------------
-------------------------------------------
(1) Corporate Guidance assumptions do not reflect any impact of
potential asset sales.
(2) Includes 4,000 bbls/d Syncrude production.
(3) United Kingdom includes Netherlands, Norway includes Denmark
(4) Includes Algeria and Tunisia.
(5) Assumptions: WTI: US$57.00/bbl; NYMEX: US$9.00/mmbtu; US$/C$:
0.84; C$/ Pounds Sterling: 2.10
(6) Excludes Syncrude (approximately 11% royalty and $20.00 /bbl
operating costs).
(7) Separate item from unit operating costs.
Talisman Corporate Guidance Assumptions(1)
Other Information (5), (8)
Income Taxes (9) (C$ millions) FY 2006
----------------
Current Income Tax 1,190 - 1,320
Future Income Tax (Recovery) 280 - 305
Petroleum Revenue Tax (Current) 270 - 310
Petroleum Revenue Tax (Deferred) 30 - 50
---------------------------------------------------------------------
Effective Income Tax Rate
(After Deducting Petroleum Revenue Tax) 42% - 48%
DD&A and ARO (C$/boe): 12.15 - 12.45
Dry Hole Costs (C$ millions): 400 - 460
Exploration Costs (C$ millions): 325 - 375
Midstream, Pipeline and Other:
Revenues (C$ millions): 120 - 140
Operating Costs (C$ millions): 30 - 40
Other Expenses (C$ millions): 10 - 20
Average
Price Realization Assumptions (10) Realized Prices
Oil & Liquids US$/bbl C$/bbl
At Posted Prices ------------------
North America 44.33 52.77
United Kingdom (3) 53.79 64.04
WTI (US$/bbl): 57.00 Norway (3) 54.94 65.41
Edmonton Light (C$/bbl): 66.96 Indonesia 53.64 63.86
Brent (US$/Bbl) 55.00 Malaysia/Vietnam: 57.16 68.05
North Africa (4) 55.00 65.48
Henry Hub (US$/mmbtu): 9.00 Trinidad 53.00 63.10
AECO (C$/GJ): 8.44 Australia 56.12 66.81
Natural Gas US$/mcf C$/mcf
------------------
North America 8.11 9.66
United Kingdom (3) 6.41 7.63
Norway (3) 3.03 3.61
Indonesia 6.08 7.24
Malaysia/Vietnam 3.42 4.07
Sensitivities (10),(11)
Cash Flow Sensitivity (Approximate impact in 2006, in millions C$)
(12)
Pre-Tax Income After-Tax
Cash Flow (12) Taxes (9) PRT (9) Cash Flow (12)
-------------------------------------------------
Volume Changes
Oil +/-10% 538 231 44 263
Natural Gas +/-10% 310 61 7 242
Price Changes (10)
WTI Oil - US$1.00/bbl 111 49 8 54
N.A. Natural Gas
- C$0.10/mcf 25 3 - 22
Exchange Rate Changes
US$ increased by
US$0.01 94 17 4 73
Pounds Sterling
increased by C$0.025 (4) (7) (1) 4
(8) Talisman employs the "Successful Efforts Accounting Method",
whereby exploration costs and unsuccessful exploration drilling
costs ("Dry Hole Costs") are expensed as incurred. Dry Hole
Costs are estimated from an evaluation of the geological risks
associated with the Company's exploration prospects, and are
subject to uncertainty.
(9) Cash and future income taxes, and Petroleum Revenue Taxes (PRT)
vary with revenue and the level and classification of
expenditures; and are complicated by the fact that the Company
carries on business in several different tax jurisdictions. Cash
and future income tax estimates incorporate the 10% UK tax rate
increase effective Jan 1, 2006; however, future tax estimates
exclude a one-time non-cash income tax charge of approximately
C$300 million associated with the rate change which the Company
expects to book in 1Q06. This one-time charge relates to years
prior to 2006 and will not be reflected in Earnings from
Operations.
(10) Assumptions: WTI: US$57.00/bbl; NYMEX: US$9.00/mmbtu; US$/C$:
0.84; C$/Pounds Sterling : 2.10. The impact of commodity
contract hedges has been included.
(11) Price sensitivity on natural gas relates to North American
natural gas only. The Company's exposure to changes in North Sea
and Malaysia/Vietnam natural gas prices is not material. Except
for a small portion which is sold at a fixed price, most of the
Indonesian natural gas price is based on the price of crude oil
and has therefore been included in the price sensitivity for
oil.
(12) Cash Flow is a non-GAAP measure, the components of which are set
out in the 2004 annual report.
Talisman Energy Inc. (NYSE:TLM) (TSX:TLM) |
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