Southeast Asia – positioned for continued profitable growth
1
2
Base Free cash flow to invest
Growth
Southeast Asia – ~8% growth from known projects, self-funded
5-10% sustainable growth
Ex
3
Exploration
Southeast Asia – Talisman focus area
Renewal of the firm
Delivering profitable growth Land million acres (net)
Production mboe/d
Free cash flow* $ million
20
120
250
100
200
80 10
150
60 100
40 50
20 0
0
0 2008
2009
2010
2008
2009
2010
2008
2009
2010
• Growth strategy in Southeast Asia is on track Four-fold increase in footprint 10% production growth in 2010 with significant free cash flow generation Medium-term ~8% p.a. growth through existing developments
• Infrastructure in place • Gas price underpinned by demand Gas to Java
• Demonstrated execution
May 2011
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Page 4
Corridor – a major cash generator for Southeast Asia • Largest gas producing property in Talisman’s portfolio
1Q 2011 price realization and netbacks $/mcf
$9.41
$3.09 $0.76
Realized price
Royalties
Opex/ transportation
$5.55
TLM Southeast Asia netback
1 bcf/d (gross) sales gas 4.3 tcfe (gross) committed to gas contracts 1.2 tcfe (gross) waiting to be monetized Further upside Majority of production linked to oil price
• Technical unitization agreed in 2010 Allow further development opportunities Potential for additional gas contracts
• 3 wells currently producing over 600 mmcf/d • Latest new well capable of 160 mmcf/d
Corridor – continuing to grow Incremental production mboe/d
Sumpal plant expansion
40
•
Increase capacity to 310 mmcf/d (gross) raw dry gas
Letang Tengah Rawa Optimization (LTRO) • • 20
Rawa station modification Additional 45 mmcf/d (gross) sales gas
Suban • •
Wells and additional compression Train 5
Dayung •
0
2011
2012
2013
2014
Additional compression and debottlenecking
2015
Total future development costs – $3.86/boe
May 2011
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Jambi Merang – a high quality acquisition TLM block TLM non-focus block Past well Prospect/lead Gas pipeline Oil field
South Sumatra
Gas field
Production mboe/d
12
8
4
Gas to Singapore and Duri
0
Jambi Jambi Merang Merang
2011
2012
2013
2014
2015
• Strategically located next to key infrastructure • 2P reserves of 28 mmboe at cost of $8.15/boe • Fast track development Gas to Java
• Leveraging premium domestic market • Potential for significant upside
Jambi Merang – first production delivered in 15 months • Results exceeding pre-drill expectations
Late 2009
• Ahead of schedule and on budget • Targeting plant expansion • 7.4 million hours in 2010 without LTI
Early 2011
• Strong execution reinforcing NOC relationship • 10 mboe/d production in 2015
May 2011
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Malaysia – proven project execution PM-3 CAA – Southern fields Sanction date
2000
First production
2003
Total gross cost ($ million)
2,700
Total gross project EUR (mmboe)
310
PM 305/314 Late 2003
Sanction date
August 2005
First production Total gross cost ($ million) Total gross project EUR (mmboe)
385 40
PM-3 CAA – Northern fields Sanction date
Late 2005
First gas
July 2008
First oil
March 2009 1,990
Total gross cost ($ million) Total gross project EUR (mmboe)
269
PM-3 CAA – stable production base with near-term growth TLM block Vietnam
Prospect/lead Oil pipeline
Song Doc
Malaysia
Production mboe/d 50
Development
Gas pipeline Oil field
40
Base
Gas field 30 20
PM-3 PM-3 CAA CAA
10 0
2008 2009 2010 2011
2015
• Stable and reliable production base • Substantial cash flow • Further organic growth through incremental oil recovery projects
May 2011
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PM-3 CAA – incremental oil recovery projects Gas export to Vietnam
IOR IOR Phase Phase 2a 2a (Kekwa) (Kekwa)
TLM block Prospect/lead Oil pipeline Gas pipeline Oil field Gas field
IOR IOR Phase Phase 2b 2b (Raya) (Raya)
• 9 new producers, 3 new injectors • 11 mmboe incremental reserves (2P) • Results exceeded expectations
IOR Phase 2a* • New platforms, new wells, facility upgrades • Targeting 24 mmboe (2P) in medium-term
Gas export to Malaysia
IOR (Phases 1 & 2a) production
IOR Phase 2b*
mboe/d 8
• New well slots and wells to existing platforms
IOR Phase 2a IOR Phase 1
6
IOR Phase 1 (completed in 2010)
IOR Phase 3*
4
• Additional wells • Facilities debottlenecking
2
0
2011
2012
2013
2014
2015
* To be sanctioned
Vietnam Block 15-2 HST/HSD development TLM block Multiphase production Gas lift Water injection Gas export Oil field
HSD HSD
HST HST
Hai Su Trang (HST) • Underpins development in Block 15-2 • Clastic reservoir • Initial development with 3 producers and 1 injector
TGT TGT
Hai Su Den (HSD)
FPSO FPSO
Vietnam
Gas to Bach Ho Field
15-2/01
• Re-sized with significant capital reduction • Fractured basement reservoir • Initial development on Block B with completion of 2 existing wells
Current plan Sanction
2011 year-end
2P reserves (mmboe)
24
First oil
2013
Peak production (boe/d)
10,000 – 15,000
IRR
>30% at $75/bbl
May 2011
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Long-term potential from high quality exploration portfolio TLM block Major exploration option Other exploration option LNG facility
Vietnam Nam Nam Con Con Son Son Basin Basin Sabah Sabah
Arun LNG
Malaysia
Bontang LNG
Papua Papua New New Guinea Guinea
Makassar Makassar Straits Straits
North Sumatra
Tangguh LNG
East Indonesia
PNG
Indonesia PNG LNG JPDA
Km 0
500
1,000
Australia
1,500
Expanding exploration footprint in the region • Four-fold increase in footprint
Total land holdings million acres (net) 20
• Substantial exploration position provides potential long-term growth
Malaysia Vietnam Indonesia 10
PNG
Vietnam – Nam Con Son Basin Indonesia – Makassar Straits PNG – Foreland Basin
0
2008
2009
2010
Peer land holdings comparison – Southeast Asia*
• Continued access to acreage via regular licensing rounds
million acres (gross) 120
NOCs
100
Talisman IOCs
80
• Talisman is the leading IOC with largest acreage position in Southeast Asia
60 40 20 0 Source: Wood Mackenzie *Includes China
May 2011
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Page 9
Exploration supports longer-term production growth Southeast Asia production mboe/d 250
200
Medium-term exploration ~8%
150
Vietnam • Nam Con Son
Indonesia
Near-term projects
100
• • • • • •
50
• Makassar Straits • Andaman III block • Indonesia JSAs and future licensing
Southeast Asia incremental production Incremental production mboe/d
Corridor
60
• Underpinned by demand
Corridor PM-3 CAA Kitan
50
PM-3 CAA
Jambi Merang
• Organic growth through incremental oil recovery projects
HST/HSD 40
Jambi Merang
30
• Steady liquids rich gas with potential upside 20
HST/HSD • High quality oil with upside
10
0
2011
2012
2015
Southeast Asia – summary
Long-term, safe, profitable growth • Strong free cash flow generation from base operations • ~8% growth largely self-funded over the medium-term
Large footprint with high quality acreage • Four-fold increase in footprint over last three years • Substantial position in high quality exploration basins to support future growth
Leveraging regional skills and relationships for a competitive advantage • Strong execution strengthens relationships with partner NOCs • Provides access to additional opportunities for further development
Strong regional gas demand and oil-linkage supports premium gas markets • ~70% of Southeast Asia production linked to oil • Strong regional demand should underpin continued price support for future contracts
