Coming during an era in which large natural gas finds in North American are few and far between, Calgary-based Talisman Energy Inc. said Tuesday it made a "significant gas discovery" in the foothills area of northeastern British Columbia with Husky Oil Operations Ltd., which has a 50% interest in the well.

The Talisman Husky Federal d-28-H/94-B-7 well tested at restricted rates of 21-25 MMcf/d with a flowing wellhead pressure of 2,300 psi. The company said it expects to find more drilling success in the play as well.

"This is an exciting result in a new area," said Talisman CEO Jim Buckee. "Using our extensive thrust and fold belt exploration experience, we have opened up a new high potential area north of Monkman and we are well positioned from a land perspective."

Expected to commence production by November 2007, the well was drilled along a new exploration fairway. The new discovery is approximately 100 kilometers north of Talisman's Monkman area. In addition, the company has identified two 100%-owned opportunities on the structure, which it expects to drill in 2007 and 2008. Talisman holds rights to approximately 10,000 gross hectares in the region.

"It is basically an underexplored and underdrilled area," Talisman spokesman Barry Nelson told NGI. "While it just north of our Monkman play, it is a totally different geological play. This new well is not as deep or as expensive as the deep wells at Monkman. The new well is a shallower Mississippian well, which is about 3,000 meters deep. It cost about C$15 million to drill, as will each of the two additional wells.

"The well we announced Tuesday along with the two we have planned will be drilled into a single structure," Nelson added. "We are targeting a range of 30 Bcf to 200 Bcf per structure and there are other structures within the play. This new well extends the play into the deeper part of the basin and is about 10 miles from a pipeline tie-in."

Late last year (see Daily GPI, Dec. 13, 2006), Talisman announced that it was setting aside C$2.2 billion for North American exploration and development spending in 2007, with more than 90% of the money for natural gas projects. More than half of the amount will be spent on Talisman's four core gas plays: the Alberta Foothills, Edson, Bigstone/Wild River and Monkman. Another C$130 million is set aside for its U.S. Appalachian play, and C$30 million will be spent on exploring new deep gas plays in the western United States. The company noted that most of its growth between 2007 and 2009 will come from development projects overseas and in Canada that are currently under way.

In its guidance for 2007, the Calgary-based independent said it plans to drill 380 development and 65 exploration wells (gross), including eight high-impact exploration wells, in the United States and Canada. Talisman also budgeted C$190 million for continued expansion of its midstream operations. Talisman's total exploration and development spending was estimated at C$4.8 billion in 2007, flat compared with 2006. About 50% of the capital budget, C$2.4 billion, will be spent on drilling, with more than 600 wells planned. An additional C$1.8 billion will be spent on plants and equipment. Projects in North America and the North Sea will account for 80% of planned expenditures.

The independent upstream oil and gas company has operations in Canada and its subsidiaries operate in the North Sea, Southeast Asia, Australia, North Africa, the United States and Trinidad and Tobago.

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