Large portfolio of undeveloped acreage Large, well-diversified reserve base Moderate financial policies High full-cycle costs Weak reserve replacement metrics relative to similarly rated peers 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. In our view, Talisman's satisfactory business risk profile reflects the company's diversified asset base, which allows it to offset weak reserve replacement performance in some regions with relatively
