Economic Performance

Not all of this expense represents cash payments to host governments. Under certain contractual terms, royalties and taxes represent the entitlement of the host government to a portion of production. Talisman does not distinguish between cash payments and ‘commodity-based payments’ in determining the Company’s total fiscal contribution to host governments. Talisman recognizes such amounts at market prices in the month the Company sells its share of production. With respect to other material payments of $1 million or greater paid to governments, Talisman paid $4.9 million to the Government of Norway in respect of exploration licences. Talisman also paid US$25 million to the Kurdistan Regional Government for capacity building projects for the benefit of the people in the region. Talisman also paid US$6 million to the Government of Vietnam for not drilling the final commitment well in Hai Su Vang North. Taxes represent current tax expense and current production taxes.