Leading shale portfolio

TLM land

Area of operation

Montney JV

Average working interest 50%

Development/pilot

Montney JV

Average working interest 50%

Development/pilot

Eagle Ford

Average working interest ~40%

Development

Eagle Ford

Average working interest ~40%

Development

Marcellus

Average working interest ~80%

Development

Marcellus

Average working interest ~80%

Development

Quebec Utica

Average working interest 75%

Pilot

Quebec Utica

Average working interest 75%

Pilot

5.5

5.0

4.5

4.0

3.5

3.0

2.5

Industry full cycle break-even

$/mcfe

Eag

le F

ord

Marc

ellu

s (d

ry g

as)

Mo

ntn

ey

Barn

ett

Fa

yette

ville

Ho

rn R

iver

Ha

yn

esville

Bo

ssie

r

Wo

od

ford

Source: Wood Mackenzie

0

1

2

3

4

5

MontneyFarrell Creek

excluding carry

Eagle FordMarcellus

North America shale break-even analysis

2011 remaining life of field break-even

$/mmbtu

0

1

2

3

4

5

MontneyFarrell Creek

including carry

Eagle FordMarcellus

2015 remaining life of field break-even

$/mmbtu

Note: Liquids value based on WTI $73

Range Range

May 2011 NYSE: TLM TSX: TLM www.talisman-energy.com Page 5

• Acreage in liquids rich window, largely evaluated, >50% held by production

• Ramp from 4 to 10 rigs 2011, manageable land expiries

• Full cycle break-even <$4.00/mmbtu

Eagle Ford Shale – JV

750Net well locations

Net acres 78,000

Contingent resource550 mmboe

(~50% liquids)

55-65Average production (mmcfe/d)

Horizontal well metrics (TLM operated)

Key metrics2011

assumptions

Net new wells on-stream ~25

EUR per well (mboe) 660

30 day IP per well (boe/d) 1,200

Mexico

Texas

Oil

Liquids rich

Drygas

CorpusChristi

San Antonio

JV land

Major pipeline

Sales pipeline

Pro

spective fairw

ay

Sasol upstream Montney JV

• Farrell Creek and Cypress A to be an integrated development area

• Cypress A carrying capital may be applied to Farrell Creek development

• Cypress A JV expected to close2H 2011

109,000

20.6

1,580

520

2,100

Total

57,00052,000Acreage (net acres)

20152011Start-up

11.29.4Contingent resource (tcfe)

Joint VentureFarrell

Creek

Cypress

A

Transaction value

(C$ million)1,050 1,050

Cash (C$ million) 260 260

Carry (C$ million) 790 790

Alberta

British

Columbia

Farrell Creek &

Cypress A

partnership

Farrell Creek &

Cypress A

partnership

TLM land

Partnership land

Basin

Major pipeline

May 2011 NYSE: TLM TSX: TLM www.talisman-energy.com Page 7