5 Year Summary

A Very Strong Year in 2004

Operationally and financially, Talisman had a very strong year in 2004 and expects this momentum to continue in 2005.

  • Record cash flow of $2.9 billion
  • 11% production per share growth
  • 179% proved reserve placement
  • Record high share price
  • Strong balance sheet
  • 5-10% production per share growth target
 Cash Flow Per Share Graph

Talisman Energy — Creating Value for its Shareholders

(millions of Canadian dollars
unless otherwise stated)		 2004 2003 2002 2001 2000
    (restated) (restated) (restated) (restated)
Gross sales 6,784 5,610 5,351 5,039 5,213
Cash flow1 2,931 2,729 2,645 2,494 2,413
Net Income 663 1,012 544 751 887
Earnings from operations1 773 673 434 560 763
Shares outstanding (millions) at December 31 375 384 393 401 406
Per common share
Cash flow1 7.65 7.07 6.58 6.16 5.84
Net income 1.77 2.56 1.29 1.80 2.09
Earnings from operations1 2.02 1.74 1.08 1.38 1.85
Annual dividend 0.30 0.23 0.20 0.20 —
Production (boe) 0.42 0.38 0.40 0.38 0.36
Reserves (boe) 4.0 3.5 3.8 3.7 2.9
Total assets 12,408 11,780 12,017 11,228 9,028
Long-term debt 2,457 2,203 2,997 2,794 1,703
Oil production (mbbls/d) 228 217 273 251 244
Gas production (mmcf/d) 1,259 1,090 1,036 1,010 988
Total production (mboe,d)2,4 438 398 445 419 409
Total net production (mboe/d)3,4 365 334 366 337 335
Exploration & Development spending 2,538 2,180 1,848 1,882 1,179
Year end proved reserves (mmboe) 1,488 1,362 1,485 1,487 1,177
Net oil and gas wells drilled (number) 405 410 310 394 415
Realized oil & gas price ($/boe)5,6 42.75 38.51 32.89 32.90 34.74
WTI oil price (US$/bbl) 41.40 30.99 26.15 25.92 30.35
NYMEX gas price (US$/mmbtu) 6.09 5.44 3.25 4.38 3.89
Number of permanent employees at December 31 1,870 1,758 1,565 1,358 1.263
  1. Non-GAAP measures. See inside back cover.
  2. Production numbers are before royalties, unless otherwise indicated. Additional information for US Readers can be found on page 76
  3. Net production (after royalties
  4. Six mcf of natural gas equals one boe
  5. Before hedging
  6. Excludes synthetic oil.
Additional information can be found on pages 20 and 21.


Historical Share Price Growth Chart
 

Talisman's share price continued to reach new highs, closing 2004 at $32.35 and reaching $44.05 in February 2005. Over the 1992-2004 period, Talisman shares have increased by an average of 17% compounded annually compared to 8% for the S&P TSX composite and 10% for the Dow Jones Industrial average.

 

  • Cash flow was a record $2.9 billion on gross sales of $6.9 billion. Higher oil prices and increased volumes were the major factors. Net income was down largely due to non-recurring gains in 2003 (Sudan asset sale, tax rate changes). Earnings from operations removes onetime and non-operational factors. On this basis, earnings increased 15% to $773 million. The Company expects $3.6-$3.8 billion of cash flow in 2005 (see assumptions) 1
  • Talisman subdivided its shares on a three for one basis in May 2004. All of the historical per share numbers have been restated for comparability. Talisman also repurchased approximately nine million shares in 2004, bringing the total to 52.5 million over five years. Talisman increased its dividend by 12.5% to $0.30/share in 2004.
  • Production per share (boe of annual production/average number of shares outstanding) also reached a record high, up 11% over 2003. Since 1993, Talisman has grown its production per share at an annual compound rate of 8%.
  • The Company’s long-term debt at year end was $2.5 billion and the debt to cash flow ratio was 0.8.
  • Total production averaged 438,000 boe/d in 2004, with the majority of the increase coming from Southeast Asia. Talisman expects production in 2005 to be in the range of 445,000-475,000 boe/d.1
  • Talisman spent a record $2.5 billion on exploration and development in 2004 and expects to spend $3.1 billion in 2005. Proved reserves at year end increased 9% to 1.5 billion boe. These reserves are predominantly high quality light oil and natural gas.
  • The Company participated in 405 net oil and gas wells in 2004 with a 90% success rate.
  • WTI oil prices averaged US$41.40/bbl in 2004, an increase of US$10.41 over the previous year. Talisman’s realized price averaged $42.75/boe.
  1. Assumes US$40/bbl WTI oil price, US$ 6.25/mmbtu NYMEX gas price and US$/C$ exchange rate of $0.80. Excludes volumes from the recent acquisitions in Norway. Please see the advisories on page 24 and the inside back cover.