Talisman Energy Inc. is touting its Alberta Outer Foothills conventional gas development as a “major new natural gas play” that could yield 200 MMcf/d of production by the end of the decade. The company currently is drilling four wells with the expectation that each will produce 6-10 MMcf/d with 6-10 Bcf of recoverable reserves per well.

“This is an exciting development as Talisman continues to find new sources of relatively low-cost conventional natural gas in North America,” said Talisman CEO Jim Buckee. “We are hoping this will be a significant growth area for us, building on our expertise in structural play systems and developing infrastructure in growth areas.”

Other examples of Talisman’s success in developing new core gas plays include the Monkman deep play near the Fort St. John area of British Columbia and the Trenton Black River play in the Appalachian Basin. Over the past two years Talisman has become the largest gas producer in New York state with about 110 MMcf/d of production.

Over the past year, the company has acquired a significant land position in the Western Canadian Sedimentary Basin along the Outer Foothills trend, which extends from west of Edmonton toward northwestern Alberta. The acreage lies in a relatively undeveloped part of the basin, east of and running parallel to Talisman’s existing Foothills play in both Alberta and British Columbia. Talisman acquired the land through both Crown land sales and third-party deals, spending C$230 million to acquire over 260,000 acres of land along the trend, most of which is 100% Talisman working interest.

The land position provides Talisman with numerous multi-zone opportunities in several distinct regions. The company has identified more than 100 drilling locations to date and estimates prospective natural gas resources of 1-2 Tcf on the acquired acreage.

Talisman expects to spend C$250 million in the Outer Foothills area in 2007, drilling 30 or more wells. Shell also has had some success in the area with several large wells. Talisman has drilled four wells to date in 2006. Three are currently being tested and the fourth will be tested this winter.

The first well, Chinook 16-14-65-13W6M, has tested at 6 MMcf/d of raw gas from three intervals within the Nikanassin Formation. The well is expected to be tied in by the end of September, following testing of an additional two intervals. Three wells are drilling and an additional six wells are planned for the remainder of 2006. Average recovery per well is expected to be in the 6-10 Bcf range, although some wells along the trend have produced more than 25 Bcf.

Reservoir deliverability is enhanced by fracturing associated with the thrust and fold structures of the limestone in the area. Initial deliverability is expected to be in the range of 6-10 MMcf/d of sales gas per successful well with 20-30% declines in the initial year of production.

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