Hilites

Talisman Energy Inc.
Highlights
	Three months ended		Six months ended
	June 30		June 30
	2003	2002	2003	2002
Financial
(millions of Canadian dollars unless otherwise stated)
Cash flow	600	652	1,445	1,229
Net income	201	90	774	191
Exploration and development expenditures	492	386	947	948
Per common share (dollars)
Cash flow (1)	4.65	4.84	11.17	9.15
Net income (2)	1.52	0.62	5.90	1.33
Production
(daily average)
Oil and liquids (bbls/d)
North America	57,302	60,381	58,087	60,524
North Sea	102,274	129,002	105,498	130,850
Southeast Asia	22,899	22,501	22,134	22,766
Algeria	3,766	-	3,336	-
Sudan	-	60,604	26,295	59,612
Synthetic oil	2,441	2,669	2,514	2,804
Total oil and liquids	188,682	275,157	217,864	276,556
Natural gas (mmcf/d)
North America	865	822	866	822
North Sea	91	136	114	128
Southeast Asia	105	93	98	97
Total natural gas	1,061	1,051	1,078	1,047
Total mboe/d	365	450	398	451
Prices (3)
Oil and liquids ($/bbl)
North America	32.92	32.76	37.87	29.80
North Sea	35.29	37.71	40.85	35.77
Southeast Asia	37.81	38.77	42.26	35.78
Algeria	35.05	-	37.33	-
Sudan	-	36.64	43.89	33.08
Crude oil and natural gas liquids	34.87	36.46	40.51	33.87
Synthetic oil	46.24	42.84	46.71	37.25
Total oil and liquids	35.02	36.53	40.58	33.90
Natural gas ($/mcf)
North America	6.41	4.08	7.22	3.68
North Sea	4.16	3.05	4.61	3.97
Southeast Asia	5.05	4.92	5.53	4.42
Total natural gas	6.09	4.02	6.80	3.78
Total ($/boe) (includes synthetic)	35.75	31.70	40.66	29.58
(1) Cash flow per common share is calculated before deducting preferred security charges.
(2) Net income per common share is calculated after deducting preferred security charges.
(3) Prices are before hedging.

BalSheet

Talisman Energy Inc.
Consolidated Balance Sheets
	June 30	December 31
(millions of Canadian dollars)	2003	2002
Assets
Current
Cash and short-term investments	488	27
Accounts receivable	690	719
Inventories	116	147
Prepaid expenses	16	24
	1,310	917
Accrued employee pension benefit asset	66	67
Other assets	78	99
Goodwill	444	469
Property, plant and equipment	9,168	10,042
	9,756	10,677
Total assets	11,066	11,594
Liabilities
Current
Accounts payable and accrued liabilities	890	803
Income and other taxes payable	219	186
	1,109	989
Deferred credits	53	57
Provision for future site restoration	766	813
Long-term debt	2,280	2,997
Future income taxes	2,020	2,236
	5,119	6,103
Shareholders' equity
Preferred securities	431	431
Common shares	2,747	2,785
Contributed surplus	73	75
Cumulative foreign currency translation	(134)	140
Retained earnings	1,721	1,071
	4,838	4,502
Total liabilities and shareholders' equity	11,066	11,594
See accompanying notes.
Interim statements are not independently audited.

Income

Talisman Energy Inc.
Consolidated Statements of Income
	Three months ended		Six months ended
(millions of Canadian dollars	June 30		June 30
except per share amounts)	2003	2002	2003	2002
Revenue
Gross sales	1,169	1,312	2,812	2,475
Less royalties	190	219	516	414
Net sales	979	1,093	2,296	2,061
Other	14	18	37	39
Total revenue	993	1,111	2,333	2,100
Expenses
Operating	249	254	543	510
General and administrative	35	35	74	66
Depreciation, depletion and amortization	329	364	690	723
Dry hole	42	25	114	52
Exploration	42	41	91	78
Interest on long-term debt	32	46	72	84
Stock-based compensation	105	-	105	-
Other	41	23	34	74
Total expenses	875	788	1,723	1,587
Gain on sale of Sudan operations	-	-	296	-
Income before taxes	118	323	906	513
Taxes
Current income tax	43	73	135	124
Future income tax (recovery)	(143)	125	(53)	122
Petroleum revenue tax	17	35	50	76
	(83)	233	132	322
Net income	201	90	774	191
Preferred security charges, net of tax	5	6	11	12
Net income available to common shareholders	196	84	763	179
Per common share (dollars)
Net income	1.52	0.62	5.90	1.33
Diluted net income	1.50	0.61	5.82	1.31
Average number of common shares outstanding (millions)
Basic	129	135	129	134
Diluted	131	137	131	137
Consolidated Statements of Retained Earnings
	Three months ended		Six months ended
	June 30		June 30
(millions of Canadian dollars)	2003	2002	2003	2002
Retained earnings, beginning of period	1,566	882	1,071	787
Net income	201	90	774	191
Common share dividends	(39)	(40)	(39)	(40)
Purchase of common shares	(2)	-	(74)	-
Preferred security charges, net of tax	(5)	(6)	(11)	(12)
Retained earnings, end of period	1,721	926	1,721	926
See accompanying notes.

Cashflow

Talisman Energy Inc.
Consolidated Statements of Cash Flows
	Three months ended		Six months ended
	June 30		June 30
(millions of Canadian dollars)	2003	2002	2003	2002
Operating
Net income	201	90	774	191
Items not involving current cash flow	357	521	580	960
Exploration	42	41	91	78
Cash flow	600	652	1,445	1,229
Deferred gain on unwound hedges	(2)	(13)	(5)	(25)
Changes in non-cash working capital	78	28	2	10
Cash provided by operating activities	676	667	1,442	1,214
Investing
Proceeds on sale of Sudan operations	-	-	1,012	-
Capital expenditures
Exploration, development and corporate	(505)	(392)	(966)	(960)
Acquisitions	(14)	(15)	(398)	(20)
Proceeds of resource property dispositions	4	8	14	12
Investments	(2)	-	(3)	-
Changes in non-cash working capital	23	(132)	(15)	(79)
Cash used in investing activities	(494)	(531)	(356)	(1,047)
Financing
Long-term debt repaid	(180)	(647)	(737)	(1,163)
Long-term debt issued	-	571	292	1,055
Common shares issued (purchased)	2	14	(114)	34
Common share dividends	(39)	(40)	(39)	(40)
Preferred security charges	(9)	(10)	(19)	(21)
Deferred credits and other	-	(4)	18	(13)
Cash used in financing activities	(226)	(116)	(599)	(148)
Effect of translation on foreign currency cash	(26)	-	(26)	-
Net (decrease) increase in cash	(70)	20	461	19
Cash and short-term investments, beginning of period	558	16	27	17
Cash and short-term investments, end of period	488	36	488	36
See accompanying notes.

SegInfo

8. Segmented Information
North America (1)					North Sea (2)					Southeast Asia (3)					Algeria					Sudan					Other					Total
	Three months		Six months			Three months		Six months			Three months		Six months			Three months		Six months			Three months		Six months			Three months		Six months			Three months		Six months
	ended		ended			ended		ended			ended		ended			ended		ended			ended		ended			ended		ended			ended		ended
	June 30		June 30			June 30		June 30			June 30		June 30			June 30		June 30			June 30		June 30			June 30		June 30			June 30		June 30
(millions of Canadian dollars)		2003	2002	2003	2002		2003	2002	2003	2002		2003	2002	2003	2002		2003	2002	2003	2002		2003	2002	2003	2002		2003	2002	2003	2002		2003	2002	2003	2002
Revenue
Gross sales		671	510	1,489	941		362	480	837	947		124	121	256	227		12	-	21	-		-	201	209	360		-	-	-	-		1,169	1,312	2,812	2,475
	Royalties	157	89	338	170		(8)	22	(4)	49		35	31	74	58		6	-	11	-		-	77	97	137		-	-	-	-		190	219	516	414
	Net sales	514	421	1,151	771		370	458	841	898		89	90	182	169		6	-	10	-		-	124	112	223		-	-	-	-		979	1,093	2,296	2,061
	Other	7	8	20	18		7	10	17	21		-	-	-	-		-	-	-	-		-	-	(1)	-		-	-	1	-		14	18	37	39
Total revenue		521	429	1,171	789		377	468	858	919		89	90	182	169		6	-	10	-		-	124	111	223		-	-	1	-		993	1,111	2,333	2,100
Segmented expenses
	Operating	94	82	193	166		134	128	288	266		20	19	41	38		1	-	3	-		-	25	18	40		-	-	-	-		249	254	543	510
	DD&A	172	148	340	300		131	172	284	334		24	21	43	43		2	-	4	-		-	23	19	46		-	-	-	-		329	364	690	723
	Dry hole	37	5	62	21		4	-	51	-		1	4	1	4		-	-	-	-		-	7	-	7		-	9	-	20		42	25	114	52
	Exploration	15	13	38	31		8	7	11	11		3	4	7	6		-	-	-	-		-	2	5	4		16	15	30	26		42	41	91	78
	Other	(7)	(1)	(20)	(4)		28	5	29	55		3	4	4	4		-	1	-	1		-	-	-	-		3	(1)	3	-		27	8	16	56
Total segmented expenses		311	247	613	514		305	312	663	666		51	52	96	95		3	1	7	1		-	57	42	97		19	23	33	46		689	692	1,454	1,419
Segmented income before taxes		210	182	558	275		72	156	195	253		38	38	86	74		3	(1)	3	(1)		-	67	69	126		(19)	(23)	(32)	(46)		304	419	879	681
Non-segmented expenses
	General and administrative																															35	35	74	66
	Interest on long-term debt																															32	46	72	84
	Gain on sale of Sudan operations																															-	-	(296)	-
	Stock based compensation																															105	-	105	-
	Currency translation																															14	15	18	18
Total non-segmented expenses																																186	96	(27)	168
Income before taxes																																118	323	906	513
Capital expenditures
	Exploration	98	55	233	162		19	26	34	53		18	10	33	14		6	(1)	3	-		-	9	7	14		24	31	38	65		165	130	348	308
	Development	135	92	258	270		117	79	183	201		56	45	121	91		4	24	22	41		-	12	(5)	32		15	4	20	5		327	256	599	640
Exploration and development		233	147	491	432		136	105	217	254		74	55	154	105		10	23	25	41		-	21	2	46		39	35	58	70		492	386	947	948
	Property acquisitions																															14	15	398	20
	Proceeds on dispositions																															(4)	(8)	(14)	(12)
	Other non-segmented																															13	6	19	12
Net capital expenditures (4)																																515	399	1,350	968
Property, plant and equipment				5,367	4,955				2,474	2,921				1,033	1,093				219	244				-	772				75	57				9,168	10,042
Goodwill				291	291				40	46				113	132				-	-				-	-				-	-				444	469
Other				858	350				299	387				201	205				12	6				-	56				18	12				1,388	1,016
Segmented assets				6,516	5,596				2,813	3,354				1,347	1,430				231	250				-	828				93	69				11,000	11,527
Non-segmented assets																																		66	67
Total assets (5)																																		11,066	11,594
		Three months		Six months								Three months		Six months								Three months		Six months
		ended		ended								ended		ended								ended		ended
		June 30		June 30								June 30		June 30								June 30		June 30
(1)	North America	2003	2002	2003	2002	(2)	North Sea					2003	2002	2003	2002	(3)	Southeast Asia					2003	2002	2003	2002
	Canada	475	429	1,072	789		United Kingdom					370	460	841	902		Indonesia					74	77	149	144
	US	46	-	99	-		Netherlands					7	8	17	17		Malaysia					14	12	26	23
	Total revenue	521	429	1,171	789		Total revenue					377	468	858	919		Vietnam					1	1	7	2
	Canada			4,948	4,848		United Kingdom							2,435	2,875		Total revenue					89	90	182	169
	US			419	107		Netherlands							39	46		Indonesia							420	515
	Property, plant and equipment (5)			5,367	4,955		Property, plant and equipment							2,474	2,921		Malaysia							602	565
																	Vietnam							11	13
(4)	Excluding corporate acquisitions.																Property, plant and equipment							1,033	1,093
(5)	Current year represents balances as at June 30, prior year represents balances as at December 31.

Netbacks

Talisman Energy Inc.
Product Netbacks
		Three months ended		Six months ended
		June 30		June 30
(C$ - production before royalties)		2003	2002	2003	2002
North	Oil and liquids ($/bbl)
America	Sales price	32.92	32.76	37.87	29.80
	Hedging (gain)	1.26	0.11	2.83	(0.33)
	Royalties	6.50	6.35	7.90	6.12
	Operating costs	5.89	4.64	6.08	5.06
		19.27	21.66	21.06	18.95
	Natural gas ($/mcf)
	Sales price	6.41	4.08	7.22	3.68
	Hedging (gain)	0.12	(0.21)	0.22	(0.32)
	Royalties	1.54	0.73	1.61	0.70
	Operating costs	0.70	0.65	0.73	0.65
		4.05	2.91	4.66	2.65
North Sea	Oil and liquids ($/bbl)
	Sales price	35.29	37.71	40.85	35.77
	Hedging (gain)	0.14	0.11	1.98	(0.32)
	Royalties	(0.89)	1.41	(0.39)	1.50
	Operating costs	12.91	9.51	13.49	9.89
		23.13	26.68	25.77	24.70
	Natural gas ($/mcf)
	Sales price	4.16	3.05	4.61	3.97
	Hedging (gain)	-	-	-	-
	Royalties	0.04	0.41	0.16	0.59
	Operating costs	0.38	0.49	0.50	0.47
		3.74	2.15	3.95	2.91
Southeast Asia (1)	Oil and liquids ($/bbl)
	Sales price	37.81	38.77	42.26	35.78
	Hedging (gain)	1.26	0.11	2.72	(0.33)
	Royalties	15.86	13.76	17.23	13.04
	Operating costs	7.22	7.61	7.78	7.38
		13.47	17.29	14.53	15.69
	Natural gas ($/mcf)
	Sales price	5.05	4.92	5.53	4.42
	Hedging (gain)	-	-	-	-
	Royalties	0.27	0.25	0.30	0.23
	Operating costs	0.49	0.49	0.56	0.45
		4.29	4.18	4.67	3.74
Algeria	Oil ($/bbl)
	Sales price	35.05	-	37.33	-
	Hedging (gain)	1.26	-	2.62	-
	Royalties	18.04	-	18.96	-
	Operating costs	4.07	-	5.01	-
		11.68	-	10.74	-
Sudan	Oil ($/bbl)
	Sales price	-	36.64	43.89	33.08
	Hedging (gain)	-	0.11	-	(0.31)
	Royalties	-	13.96	20.34	12.67
	Operating costs	-	4.55	3.73	3.74
		-	18.02	19.82	16.98
Total Company	Oil and liquids ($/bbl)
	Sales price	34.87	36.46	40.51	33.87
	Hedging (gain)	0.65	0.11	2.06	(0.32)
	Royalties	3.83	6.32	6.49	5.92
	Operating costs	9.87	7.17	9.58	7.27
		20.52	22.86	22.38	21.00
	Natural gas ($/mcf)
	Sales price	6.09	4.02	6.80	3.78
	Hedging (gain)	0.10	(0.16)	0.18	(0.25)
	Royalties	1.28	0.65	1.34	0.64
	Operating costs	0.65	0.62	0.69	0.61
		4.06	2.91	4.59	2.78
(1) Includes operations in Indonesia and Malaysia/Vietnam.
Netbacks do not include synthetic oil or pipeline operations.

NetProd

Talisman Energy Inc.
Additional Information for US Readers
Production net of royalties
	Three months ended		Six months ended
	June 30		June 30
	2003	2002	2003	2002
Oil and liquids (bbls/d)
North America	45,982	48,677	45,969	48,088
North Sea	104,862	124,183	106,506	125,352
Southeast Asia (1)	13,291	14,514	13,110	14,466
Algeria	1,828	-	1,642	-
Sudan	-	37,511	14,111	36,777
Synthetic oil (Canada)	2,296	2,521	2,376	2,664
Total oil and liquids	168,259	227,406	183,714	227,347
Natural gas (mmcf/d)
North America	657	675	674	666
North Sea	90	118	110	109
Southeast Asia (1)	99	88	92	93
Total natural gas	846	881	876	868
Total mboe/d	309	375	330	372
(1) Includes operations in Indonesia and Malaysia/Vietnam.

USNetbacks

Talisman Energy Inc.
Additional Information for US Readers
Product Netbacks
		Three months ended		Six months ended
		June 30		June 30
(US$ - production net of royalties)		2003	2002	2003	2002
North	Oil and liquids (US$/bbl)
America	Sales price	23.54	21.08	26.04	18.93
	Hedging (gain)	1.13	0.09	2.46	(0.26)
	Operating costs	5.25	3.71	5.29	4.04
		17.16	17.28	18.29	15.15
	Natural gas (US$/mcf)
	Sales price	4.58	2.63	4.97	2.34
	Hedging (gain)	0.12	(0.16)	0.20	(0.25)
	Operating costs	0.66	0.51	0.65	0.51
		3.80	2.28	4.12	2.08
North Sea	Oil and liquids (US$/bbl)
	Sales price	25.24	24.26	28.09	22.72
	Hedging (gain)	0.10	0.07	1.35	(0.21)
	Operating costs	9.00	6.35	9.19	6.56
		16.14	17.84	17.55	16.37
	Natural gas (US$/mcf)
	Sales price	2.97	1.96	3.17	2.52
	Hedging (gain)	-	-	-	-
	Operating costs	0.28	0.37	0.36	0.35
		2.69	1.59	2.81	2.17
Southeast Asia (1)	Oil and liquids (US$/bbl)
	Sales price	27.04	24.94	29.06	22.73
	Hedging (gain)	1.55	0.11	3.15	(0.33)
	Operating costs	8.90	7.59	9.03	7.38
		16.59	17.24	16.88	15.68
	Natural gas (US$/mcf)
	Sales price	3.61	3.17	3.80	2.81
	Hedging (gain)	-	-	-	-
	Operating costs	0.37	0.33	0.41	0.30
		3.24	2.84	3.39	2.51
Algeria	Oil (US$/bbl)
	Sales price	25.06	-	25.67	-
	Hedging (gain)	1.86	-	3.66	-
	Operating costs	6.00	-	7.00	-
		17.20	-	15.01	-
Sudan	Oil (US$/bbl)
	Sales price	-	23.57	30.18	21.01
	Hedging (gain)	-	0.11	-	(0.32)
	Operating costs	-	4.73	4.78	3.85
		-	18.73	25.40	17.48
Total Company	Oil and liquids (US$/bbl)
	Sales price	24.91	23.50	27.79	21.63
	Hedging (gain)	0.52	0.09	1.68	(0.25)
	Operating costs	7.92	5.59	7.83	5.63
		16.47	17.82	18.28	16.25
	Natural gas (US$/mcf)
	Sales price	4.30	2.59	4.62	2.41
	Hedging (gain)	0.09	(0.12)	0.15	(0.19)
	Operating costs	0.59	0.47	0.58	0.47
		3.62	2.24	3.89	2.13
(1) Includes operations in Indonesia and Malaysia/Vietnam.
Netbacks do not include synthetic oil or pipeline operations.

Ratios

Talisman Energy Inc.
Consolidated Financial Ratios
June 30, 2003
The following financial ratios are provided in connection with the Company's continuous offering of
medium term notes pursuant to the short form prospectus dated March 27, 2002 and a prospectus supplement
dated March 28, 2002, and are based on the corporation's consolidated financial statements that are prepared
in accordance with accounting principles generally accepted in Canada.
The asset coverage ratios are calculated as at June 30, 2003.
The interest coverage ratios are for the 12 month period then ended.
	Preferred	Preferred
	Securities	Securities
	as equity (5)	as debt (6)
Interest coverage (times)
Income (1)	9.71	7.71
Cash flow (2)	21.04	16.70
Asset coverage (times)
Before deduction of future income taxes and deferred credits (3)	4.37	3.71
After deduction of future income taxes and deferred credits (4)	3.12	2.65
(1) Net income plus income taxes and interest expense; divided by the sum of interest expense and capitalized interest.
(2) Cash flow plus current income taxes and interest expense; divided by the sum of interest expense and capitalized interest.
(3) Total assets minus current liabilities; divided by long-term debt.
(4) Total assets minus current liabilities and long-term liabilities excluding long-term debt; divided by long-term debt.
(5) The Company's preferred securities are classified as equity and the related charges have been excluded from interest expense.
(6) Reflects adjusted ratios, had the preferred securities been treated as debt and the related charges been included in interest expense.