Who We Are

TALISMAN ENERGY INC.is an upstream oil and gas company with a balanced portfolio of North American and international operations. Talisman was established as an independent company in 1992, headquartered in Calgary, Alberta, Canada. Talisman is listed on both the Toronto and New York stock exchanges under the symbol TLM. Talisman is also part of the S&P/TSX 60 index. At year-end, the Company had an enterprise value (share value and debt) of approximately $25 billion, with 1,064 million shares outstanding.

Talisman’s mission is creating value for its shareholders with the objective of growing reserves, production and cash flow per share. The Company’s target is 5 to 10% annual production per share growth. Talisman’s strategic focus is high deliverability, deep gas opportunities in North America and large international oil and natural gas prospects. The Company believes this strategy will enable it to continue to meet its growth rates while generating superior economic returns.

In 2006, 96% of Talisman’s production came from three core areas: North America, the North Sea and Southeast Asia. Approximately 54% of Talisman’s production is high quality crude oil and liquids and 46% is natural gas. 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 is also included in the Dow Jones Sustainability (North America) Index. Talisman encourages its stakeholders to read the Company’s 2006 Annual Report Summary, Annual Financial Report and Annual Information Form. These documents can be obtained from the Company or viewed online at www.talisman-energy.com.

How We Report

About this report This report focuses on Talisman's corporate responsibility priorities set out in the Company's Policy on Business Conduct and Ethics (The Policy or the PBCE), including ethical business conduct; employee practices; health, safety and the environment; human rights and community relations. The report is a measurement and performance management tool. It is not intended to be an exhaustive review of all activity that Talisman has undertaken or supported. Rather, Talisman aims to illustrate through the report the breadth and scope of corporate responsibility-related action that has been taken, and is being taken to manage the Company's risks.

The key performance indicators reported in this document assist us in measuring our performance against certain corporate responsibility goals and objectives. Wherever possible, country-specific data has been used, while regional and aggregate data have also been included. Unless otherwise indicated, figures are reported in metric units and all financial information is reported in Canadian dollars. Unless the context indicates otherwise, a reference in this report to Talisman, the Company, our or we includes direct or indirect subsidiaries of Talisman Energy Inc. and partnership interests held by Talisman Energy Inc. and its subsidiaries. An independent third party, PricewaterhouseCoopers LLP (PwC), has reviewed the data noted in bold contained in the Performance Data Tables on pages 38 to 42 of this report.

Reporting periodThis report deals with the Company and its wholly owned subsidiaries operating around the world from January 1, 2006 to December 31, 2006. Talisman's last report was published in April 2006 and the next edition is scheduled for publication in April 2008.

Stakeholders While the term stakeholders holds multiple meanings, the Company defines its stakeholders as its employees, shareholders, suppliers, service providers, and those communities, indigenous groups, investors, debtholders, governments, regulators and Non-Governmental Organizations (NGOs) affected by, or that can affect, Talisman's operations.