The ratings on Calgary, Alta.-based Talisman Energy Inc. reflect, in Standard&Poor's Ratings Services' opinion, 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. We believe a continued trend of weak reserve replacement economics, which results in falling internal reserve replacement statistics despite relatively high exploration and development spending, somewhat offsets these strengths. Talisman is an independent upstream oil and gas company with operations in Canada, the U.K., Norway, Southeast Asia, North Africa and the U.S. The company's subsidiaries are also active in a number of other international areas. In our view, Talisman's satisfactory business risk profile reflects the company's broadly diversified asset base, which
