Talisman Energy Announces $4.4 Billion Exploration & Development Budget for 2008

CALGARY, ALBERTA, Jan 15 (MARKET WIRE) --
Talisman Energy Inc. (TSX: TLM)(NYSE: TLM) announced its spending plans
and production guidance for 2008. The Company plans to spend $4.4 billion
on exploration and development in 2008, down from an estimated $4.6
billion in 2007. The major underpinnings of this program are:

- Increased investment in Southeast Asia and Norway, reflecting project
developments and exploration opportunities.

- Some reduction in spending on UK development projects, reflecting the
completion of a number of projects in 2007, and consistent with taking a
more measured pace. Developments at Auk and Burghley are being progressed.

- Some reduction in North American spending in light of uncertainty in
both natural gas prices and Alberta royalties, although North America
will still account for over one-third of total spending.

The Company expects production from continuing operations to grow 5-10%
annually to 2010. Production in 2008 is expected to be between 435,000
and 460,000 boe/d, with the range primarily defined by ongoing
commissioning of the Tweedsmuir field in the North Sea.

Commenting on this outlook, John Manzoni, President & Chief Executive
Officer said: "Although our outlook for growth to 2010 remains robust at
5-10% per annum, 2008 volumes are now expected to come in 3-8% higher
than production from continuing operations in 2007. Early estimates of
production in 2007 are around 452,000 boe/d. Asset sales last year were
circa 28,000 boe/d, so underlying production from continuing operations
was 424,000 boe/d. The 2008 projection is lower than our previous
expectations.

"Around 60% of the reduction from our previous projections comes from the
North Sea and is due to a number of factors. These include asset sales,
which were not contemplated previously and delays in commissioning
various projects during the second half of 2007, including Tweedsmuir.
Tweedsmuir remains in commissioning phase. The range of 2008 outcomes
largely reflects the range of Tweedsmuir volumes for the year, which
ranges from today's production level of 16,000 boe/d up to 40,000 boe/d.
We have also taken a more measured view of project timing in light of our
recent experiences and prevailing industry conditions. And finally, there
have been some minor reassessments of operating uptime and reservoir
performance.

"Around 20% of the reduction is a result of decisions to reduce capital
programs, primarily in North America, but also in the UK, in order to
improve our project delivery performance. We intend to maintain
flexibility in our expenditure in North America both up and down,
depending on the gas price. The remaining 20% reduction arises from other
operational issues, and project delays internationally, including the
Corallina riser failure in Australia and slower than expected ramp up of
West Java natural gas sales, although the pipeline is now completed and
volumes are increasing.

"I am disappointed in our projections for 2008 compared to our prior
estimates. However, we have set the business on a path which I believe is
realistic and deliverable, and I am determined that we increase internal
and external confidence, that we will meet the projections we set. These
projections incorporate our experience from the second half of 2007 as
well as a realistic view of project delivery in today's environment, in
particular in the UK business, where over the next few years we are
bringing on a number of brownfield projects. Steps are underway to
improve the delivery of these projects.

"The predictability of our growth profile has not been good. However,
after examining the portfolio, I believe the issues are mainly around
delays, and some optimistic projections on uptime, in particular on
assets recently brought into the portfolio, rather than a reduction of
reserves.

"Despite these short-term production issues, which we will fix, I am very
encouraged by our financial strength, recent exploration successes in
Vietnam and the UK North Sea, development projects in the pipeline and
the long-term potential of our assets. During 2008 we expect to see a
continuing strengthening of the balance sheet, building from the second
half of 2007. In the medium term, we have projects underway which will
deliver 5-10% per annum growth in the 2008-2010 period, based on today's
portfolio. Execution and delivery of these projects will be a short term
priority.

"We are in the process of undertaking a strategic review to underpin
growth in the longer term. This includes a full review of development and
exploration opportunities within the existing portfolio, as well as an
overall review of portfolio balance. I look forward to communicating the
outcomes from this review during the second quarter."

2008 Capital Program

Total exploration and development spending in 2008 will be reduced by
about 6% from an estimated $4,650 million in 2007. Of the planned $4,375
million exploration and development budget, 45% is being allocated to the
North Sea, 34% to North America, 17% in Southeast Asia and 4% for the
rest of the world. Approximately three quarters of spending is on
development projects and one quarter is earmarked for exploration.

Spending in Norway and Southeast Asia is expected to increase by
approximately $400 million this year (an increase of 34%). The Company
has a number of development projects underway in these regions including
Rev and Yme in Norway and the Northern Fields and Song Doc developments
in Southeast Asia.

In addition, the Company will continue drilling in its highly prospective
offshore exploration block in Vietnam. The Company is also increasing
exploration activity in Norway with six wells planned.

Spending will be reduced in the UK North Sea in 2008, following the
completion of a number of field developments in 2007. The Company will
progress the development of the Burghley field toward approval, as well
as a major redevelopment of the Auk field and continued appraisal of the
Cayley discovery.

The Company is reducing spending in North America, drilling higher return
prospects, following up on drilling successes in 2007 and adding drilling
locations in order to high grade its prospect inventory. In addition,
Talisman will step up work on its non-conventional tight gas and shale
opportunities and drill a number of wells in the US Foothills.

North America

The Company plans to spend $1.5 billion in North America in 2008,
participating in 300 gross wells (230 net). Spending over 2007 and 2008
has been reduced by approximately $1 billion compared to the outlook a
year ago. The majority of North American spending will continue to be
directed towards natural gas drilling. At planned spending levels,
Talisman believes it can sustain existing production levels in North
America, generating free cash flow at current natural gas prices, while
maintaining flexibility.

Talisman will build on its success in the multi-zone Outer Foothills play
in Alberta and British Columbia, following up on a number of promising
discoveries made in Ojay, Hinton and Solomon in 2007. Development of our
tighter gas opportunities in Wild River, Edson and Bigstone provide a
large number of relatively low risk wells with outcomes that are
predictable.

Major drilling programs are planned for the Alberta and BC Foothills
again in 2008 where Talisman has a strategic land position supported by
its midstream operations. However, spending in some parts of the Alberta
Foothills is being reduced due to proposed royalty changes, which have
made some higher cost, high deliverability gas wells uneconomic. We
believe Talisman's expertise as the leading gas driller in the Canadian
Foothills is transferable to the Western US, where the Company plans to
drill two wells in the first half of 2008. If successful, we will
increase our focus in this new and exciting area.

The Company has large unconventional natural gas resources within its
existing land base and plans are underway to continue evaluating this
potential and develop it as a long term strategic resource. This includes
initiatives in the Montney play in the Greater Arch area as well as a
better understanding of the shale potential in Appalachia, Quebec and
Western Canada.

Capital costs are expected to moderate in 2008, although the Company
expects unit operating costs to increase 10-15% reflecting increased
production in the Outer Foothills and higher property taxes.

North Sea

Planned spending in 2008 is relatively unchanged at approximately $2
billion, although with the capital spend largely complete at Blane,
Duart, Enoch and Tweedsmuir, there is a shift in spending from the UK
towards Norway. Total UK capital expenditure is expected to decrease to
$1,140 million and to increase to $850 million (up 35%) in Scandinavia.
This includes $100 million of exploration spending in the UK and $170
million in Norway.

The UK development program will focus on continuing exploitation of
existing core areas, progressing new projects at Burghley and starting
redevelopment of the Auk field, which was acquired at the end of 2006.
Development drilling programs will continue primarily at Montrose,
Claymore and Tartan. A key part of the UK exploration program will be the
continued appraisal of the Cayley discovery.

In Norway, the Company will continue the development of the Rev field,
with production due to start in 2008, and the Yme field, with production
due to start in 2009. Since 2003, Talisman has built the third largest
acreage holding in Norway and 2008 will see six exploration wells drilled.

Southeast Asia

In Southeast Asia, the Company plans to increase spending by
approximately $180 million (33%) in 2008 on existing project
developments, ongoing exploration and appraisal of our offshore acreage
in Vietnam and prospect identification and delineation in Indonesia. The
majority of the spending increase will be in the PM-3 Commercial
Arrangement Area between Malaysia and Vietnam as we progress completion
of the Northern Fields development where first natural gas sales are
expected in mid-2008 and first oil in the first half of 2009.

In Vietnam, we will see first production from Song Doc, and on Block
15-2/01 Talisman will progress unitization and development plans around
the Hai Su Trang and Te Giac Trang discoveries. In Indonesia, gas volumes
are flowing through the pipeline from Corridor to West Java and are
expected to build through the year and work is progressing on the next
tranche of gas sales contracts.

The Company has a very active drilling program planned in 2008. In
addition to participating in 57 development wells (mainly on Northern
Fields and Song Doc), Talisman plans to spend approximately $200 million
on exploration. In Vietnam, we are very encouraged by the Hai Su Den
exploration well, which is testing a large basement structure and we plan
to drill up to four additional exploration and three appraisal wells in
Block 15-2/01 this year.

Overall production volumes in Southeast Asia are expected to be
relatively flat in 2008, with a significant increase expected in 2009,
following completion of the Northern Fields project and with increasing
Indonesian natural gas volumes going to West Java.

Algeria, Tunisia, Trinidad and International Exploration

Capital expenditure on developments is expected to be $42 million in
Algeria, Trinidad and Tunisia.

Excluding North America, exploration spending in 2008 is budgeted at
approximately $600 million. The most likely places for substantial
resource additions in 2008 are in Vietnam and Norway. Key wells planned
for Norway include Bjorn (currently drilling) and Trow, Marsvin and TR3.
In Vietnam, two key wells (Hai Su Nau and Hai Su Bac) are expected to
spud in the first quarter.

In the UK, the Company plans to drill four exploration wells and one
appraisal well. In Indonesia, Talisman plans to shoot seismic over the
deepwater Sageri and Pasangkayu blocks in Indonesia, preparing for
drilling in 2009. In South America, the Company expects to acquire
seismic in Colombia and start the drilling of one exploration well, while
in Peru a well to appraise the earlier discovery is expected to spud
towards the end of 2008.

In Alaska, the Company will acquire additional seismic data during 2008.

A conference call will be held to discuss this press release at 11:00 am
MST on Tuesday, January 15, 2008. To participate in the call, please
contact the Talisman Energy conference operator at 10:50 a.m. MST (12:50
p.m. EST), 10 minutes prior to the conference call.

Conference Operator Dial in Numbers:
1-800-731-5774 (North America) or
1-416-644-3418 (Local Toronto & International)

The conference call will also be broadcast live on the internet and
can be accessed by going to the Talisman website
(www.talisman-energy.com) and following the links from the home page.
Alternatively, you can point your browser to:

www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2139940

Talisman Energy Inc. is an independent upstream oil and gas company
headquartered in Calgary, Alberta, Canada. The Company and its
subsidiaries have operations in North America, the North Sea, Southeast
Asia, and North Africa. Talisman's subsidiaries are also active in a
number of other international areas. Talisman is committed to conducting
its business in an ethically, socially and environmentally responsible
manner. The Company is a participant in the United Nations Global Compact
and included in the Dow Jones Sustainability (North America) Index.
Talisman's shares are listed on the Toronto Stock Exchange in Canada and
the New York Stock Exchange in the United States under the symbol TLM.

Financial Information:

All dollar amounts are stated in Canadian dollars, except where otherwise
indicated.

Forward-Looking Information:

This press release contains statements that constitute "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 plans for drilling, exploration and development, appraisal and
estimated timing;

- estimates of production, production growth, and operations performance;

- estimates of future sales;

- estimated amounts and timing of capital expenditures;

- estimates of operating costs and unit operating costs;

- business strategy and plans or budgets;

- estimated timing and results of new development, including new
production;

- royalty rates; and

- other expectations, beliefs, plans, goals, objectives, assumptions,
information and statements about possible future events, conditions,
results of operations or performance.

Often, but not always, forward-looking information uses words or phrases
such as: "expects", "does not expect" or "is expected", "anticipates" or
"does not anticipate", "plans" or "planned", "estimates" or "estimated",
"projects" or "projected", "forecasts" or "forecasted", "believes",
"intends", "likely", "possible", "probable", "scheduled", "positioned",
"goal", "objective" or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be achieved.

Various assumptions were used in drawing the conclusions or making the
forecasts and projections contained in the forward-looking information
contained in this press release. Information regarding business plans for
drilling, exploration and development, assumes that the extraction of
crude oil, natural gas and natural gas liquids remains economic.

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 press 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, market
demand and unpredictable facilities outages;

-risks and uncertainties involving geology of oil and gas deposits;

- the uncertainty of estimates and projections relating to production,
costs and expenses;

- potential delays or changes in plans with respect to exploration or
development projects or capital expenditures;

- risk that adequate pipeline capacity to transport the gas to market may
not be available;

- fluctuations in oil and gas prices, foreign currency exchange rates and
interest rates;

- the outcome and effects of any future acquisitions and dispositions;

- the ability of the Company to integrate any assets it may acquire or
the performance of those assets;

- health, safety and environmental risks;

- uncertainties as to the availability and cost of financing and changes
in capital markets;

- risks in conducting foreign operations (for example, political and
fiscal instability or the possibility of civil unrest or military action);

- competitive actions of other companies, including increased competition
from other oil and gas companies and companies providing alternative
sources of energy;

- changes in general economic and business conditions;

- the effect of acts of, or actions against, international terrorism;

- the possibility that government policies or laws may change or
governmental approvals may be delayed or withheld;

- results of the Company's risk mitigation strategies, including
insurance; and

- the Company's ability to implement its business strategy.

Readers are cautioned that 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 are included in the
Company's most recent Annual Information Form and Annual Financial
Report. 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 released. The Company
assumes no obligation to update forward-looking information should
circumstances or management's estimates or opinions change, except as
required by law.

Production

Throughout this press release, Talisman makes reference to forecasted
production volumes. 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. U.S. readers may refer to the table
headed "Continuity of Proved Net Reserves" in Talisman's most recent
Annual Information Form for a statement of Talisman's net production
volumes by reporting segment that are comparable to those made by U.S.
companies subject to SEC reporting and disclosure requirements.

Boe Conversion

Throughout this press release, 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 ratio of 6 mcf:1 bbl is based on an
energy equivalence conversion method primarily applicable at the burner
tip and does not represent a value equivalence at the wellhead.

Contacts:
Talisman Energy Inc.
David Mann
Senior Manager, Corporate & Investor Communications
(403) 237-1196
(403) 237-1210 (FAX)
Email: tlm@talisman-energy.com

Talisman Energy Inc.
Christopher J. LeGallais
Senior Manager, Investor Relations
(403) 237-1957
(403) 237-1210 (FAX)
Email: tlm@talisman-energy.com
Website: www.talisman-energy.com

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