The ratings on Calgary, Alta.-based Talisman Energy Inc. reflect a well-diversified portfolio of upstream assets, the growth potential inherent in the company's undeveloped acreage, and a history of fairly moderate financial policies. Somewhat offsetting these strengths is a continuing trend of weak reserve replacement economics, which result in falling internal reserve replacement statistics despite relatively high exploration and development spending. As Talisman continues to redeploy substantially all of its operating cash flows into its exploration and development activities, there was little opportunity for debt reduction in 2006 and 2007. Talisman's satisfactory business risk profile reflects the company's broadly diversified asset base, which allows it to offset weak reserve replacement performance in some regions with relatively stronger performance in its other
