Talisman Energy Inc - Annual Report (foreign private issuer) (40-F)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 40-F

(CHECK ONE)
o		Registration statement pursuant to Section 12 of the Securities and Exchange Act of 1934
OR
ý		Annual Report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended: December 31, 2007
Commission File Number: 001-06665

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TALISMAN ENERGY INC.
(Exact name of Registrant as specified in its charter)

Canada (Province or other jurisdiction of incorporation or organization)		1311 (Primary standard industrial classification code number, if applicable)		Not applicable (I.R.S. employer identification number, if applicable)
Suite 3400, 888 – 3 rd  Street S.W. Calgary, Alberta Canada T2P 5C5 [phone] (Address and telephone number of registrant's principal executive office)

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NATIONAL CORPORATE RESEARCH, LTD.

1780 Barnes Blvd. Southwest
Tumwater, Washington 98512-0410
[phone]
(Name, address (including zip code) and telephone number
(including area code) of agent for service in the United States)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Common Shares of no par value		Name of each exchange on which registered: Toronto Stock Exchange New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
        None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
        7.25% Debentures, due 2027
        5.125% Notes, due 2015
        5.750% Notes, due 2035
        5.850% Notes, due 2037
        6.250% Notes, due 2038

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For annual reports, indicate by check mark the information filed with this Form:

ý   Annual Information Form                    ý   Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.
         Common Shares: 1,018,590,255

Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). If "Yes" is marked, indicate the file number assigned to the Registrant in connection with such Rule.

Yes   o                    No   ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes   ý                    No   o

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        The following documents, or the portions thereof indicated below, that are filed as exhibits to this Annual Report on Form 40-F, are incorporated herein by this reference.

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Annual Information Form of the Registrant dated March 7, 2008;



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Management's Discussion and Analysis of the Registrant dated March 7, 2008;



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Comparative audited consolidated financial statements of the Registrant, including notes thereto, together with the Independent Auditors' Report thereon as at and for the year ended December 31, 2007, the Independent Auditors' Report on Internal Controls under Standards of The Public Company Accounting Oversight Board (United States) as at December 31, 2007, the Report of Management and the Management Report on Internal Control over Financial Reporting; and



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Statement of Corporate Governance Practices of the Registrant contained in Schedule A of the Registrant's Management Proxy Circular dated March 7, 2008, excluding the portion thereof which appears under the heading "Audit Committee Report".

Forward-Looking Information

        This Form 40-F contains or incorporates by reference information that constitutes "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. Forward-looking information is included throughout the Annual Report on Form 40-F and the documents incorporated by reference herein including among other places: (1) in the Annual Information Form of the Registrant dated March 7, 2008 under the headings "General Development of the Business", "Description of the Business", "Corporate Responsibility and Environmental Protection", "Legal Proceedings" and "Risk Factors"; and (2) in the Management's Discussion and Analysis of the Registrant dated March 7, 2008 under the headings "Outlook for 2008" and "Risk Factors". This forward-looking information includes, among others, statements regarding:

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estimated amounts and timing of capital expenditures;



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business plans for drilling, exploration, development, and redevelopment and estimated timing;



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business strategy and plans;



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planned acquisitions and dispositions and their timing;



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expected impact of proposed royalty changes;



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estimated timing and results of new projects, including the timing of production;



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anticipated construction and installation of facilities;



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anticipated environmental compliance costs;



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estimated movement in working capital;



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anticipated filings with securities regulatory authorities;



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estimates of production, production growth, and operations or financial performance;



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estimated impacts of penalties;



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estimated petroleum revenue taxes;



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the merits or anticipated outcome or timing of pending litigation; and



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other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance.

        Often, but not always, forward-looking information uses words or phrases such as: "expects", "does not expect" or "is expected", "anticipates" or "does not anticipate", "plans" or "planned", "estimates"

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or "estimated", "projects" or "projected", "forecasts" or "forecasted", "believes", "intends", "likely", "possible", "probable", "scheduled", "positioned", "goal", "objective" or states that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

        Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained or incorporated by reference in this Form 40-F. Information regarding oil and gas reserves, business plans for drilling, exploration, development, and appraisal assumes that the extraction of crude oil, natural gas and natural gas liquids remains economic. For the purposes of preparing this Form 40-F and the documents incorporated herein by reference, the Registrant assumed a West Texas Intermediate oil price of approximately US$70/bbl, a NYMEX natural gas price of approximately US$8/mmbtu, a US$/C$ exchange rate of approximately US$0.94 = C$1.00 and a C$/£ exchange rate of approximately C$2.14=UK£$1.00 in 2008.

        Information regarding estimated future production and production growth includes anticipated completion of the Beatrice asset sale but does not reflect the impact of any future asset dispositions. The completion of any contemplated asset dispositions is contingent on various factors, including favorable market conditions, the ability of the Registrant to negotiate acceptable terms of sale and receipt of any required approvals for such dispositions.

        Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks which could cause actual results to vary and in some instances to differ materially from those anticipated by the Registrant and described in the forward-looking information contained in this Form 40-F. The material risk factors include, but are not limited to:

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the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable facilities outages;



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risks and uncertainties involving geology of oil and gas deposits;



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the uncertainty of reserves and resources estimates, reserves life and underlying reservoir risk;



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the uncertainty of estimates and projections relating to production, costs and expenses;



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potential delays or changes in plans with respect to exploration or development projects or capital expenditures;



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the risk that adequate pipeline capacity to transport gas to market may not be available;



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fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;



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the outcome and effects of any future acquisitions and dispositions;



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the ability of the Registrant to integrate any assets it may acquire or the performance of those assets;



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health, safety and environmental risks;



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uncertainties as to the availability and cost of financing and changes in capital markets;



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uncertainties related to the litigation process, such as possible discovery of new evidence or acceptance of novel legal theories and difficulties in predicting the decisions of judges and juries;



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risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action);



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competitive actions of other companies, including increased competition from other oil and gas companies;



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changes in general economic and business conditions;



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the effect of acts of, or actions against, international terrorism;

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the possibility that government policies or laws may change or governmental approvals may be delayed or withheld;



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results of the Registrant's risk mitigation strategies, including insurance and any hedging activities; and



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the Registrant's ability to implement its business strategy.

        The foregoing list of risk factors is not exhaustive. Additional information on these and other factors which could affect the Registrants's operations or financial results are included: (1) under the heading "Risk Factors" in the Annual Information Form; (2) in the Report on Reserves Data by the Registrants's Internal Qualified Reserves Evaluator and in the Report of Management and Directors on Oil and Gas Disclosure, attached as schedules to the Annual Information Form; (3) under the heading "Risk Factors" in the Management's Discussion and Analysis; and (4) elsewhere in the Annual Information Form and Management's Discussion and Analysis. In addition, information is available in the Registrant's other reports on file with Canadian securities regulatory authorities and the United States Securities and Exchange Commission.

        Forward-looking information is based on the estimates and opinions of the Registrant's management at the time the information is presented. The Registrant assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change, except as required by law.

NOTE TO UNITED STATES READERS—
DIFFERENCES IN UNITED STATES AND
CANADIAN REPORTING PRACTICES

        The Registrant is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this annual report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant prepares its financial statements, which are filed with this Annual Report on Form 40-F, in accordance with Canadian generally accepted accounting principles ("GAAP"), and they may be subject to Canadian auditing and auditor independence standards. They may not be comparable to financial statements of United States companies. Significant differences between Canadian GAAP and United States GAAP are described in note 21 of the comparative audited consolidated financial statements of the Registrant.

        Acquiring, holding or disposing of the Registrant's securities may subject you to tax consequences both in the United States and Canada. Tax consequences of acquiring, holding and disposing of our securities are not described in this Annual Report.

CONTROLS AND PROCEDURES

        As of the end of the period covered by this Annual Report, an evaluation was carried out under the supervision of and with the participation of the Registrant's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operations of the Registrant's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Registrant in reports that it files with or submits to the Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

        It should be noted that while the Registrant's Chief Executive Officer and Chief Financial Officer believe that the Registrant's disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the Registrant's disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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        Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

        Management has conducted an evaluation of the Registrant's internal control over financial reporting based on criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

        Based on management's assessment as of December 31, 2007, the end of the Registrant's fiscal year, management concludes that the Registrant's internal control over financial reporting is effective.

        Management reviewed the results of management's assessment with the Audit Committee of the Registrant's Board of Directors. The Registrant's independent registered public accounting firm, Ernst & Young LLP, independently assessed the effectiveness of the Registrant's internal control over financial reporting. Ernst & Young LLP's attestation is located in the Independent Auditors' Report on Internal Controls under Standards of the Public Company Accounting Oversight Board (United States) which is incorporated by reference in this Annual Report on Form 40-F as Exhibit 99.8.

Inherent Limitations on Effectiveness of Controls

        Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of the Registrant's financial statements would be prevented or detected. Further, the evaluation of the effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

        No changes were made in the Registrant's internal control over financial reporting during the fiscal year ended December 31, 2007 that have materially affected or are reasonably likely to materially affect the Registrant's internal control over financial reporting.

AUDIT COMMITTEE FINANCIAL EXPERT

        The Registrant's Board of Directors has determined that Robert G. Welty, a member of the Audit Committee, qualifies as an audit committee financial expert (as defined in paragraph (8)(b) of General Instruction B of Form 40-F) and is independent as defined by the New York Stock Exchange Corporate Governance Rules.

AUDIT COMMITTEE INFORMATION, AUDITOR FEES AND CODE OF ETHICS

        The following information is included in the Registrant's Statement of Corporate Governance Practices contained in Schedule A of the Registrant's Management Proxy Circular (excluding the portion thereof which appears under the heading "Audit Committee Report") and Schedule C of the Registrant's Annual Information Form:

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Information regarding the Registrant's Audit Committee;



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Information regarding fees paid to the Registrant's principal accountants, including policies and procedures adopted for pre-approval of audit fees, audit-related fees, tax fees and all other fees; and



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Information regarding the Registrant's code of ethics.

OFF-BALANCE SHEET TRANSACTIONS AND CONTRACTUAL OBLIGATIONS

        Information regarding off-balance sheet transactions and contractual obligations of the Registrant is included in Management's Discussion and Analysis of the Registrant and notes 12 and 13 of the comparative audited consolidated financial statements of the Registrant, which are incorporated by reference in this Annual Report on Form 40-F.

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UNDERTAKING

        The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an Annual Report on Form 40-F arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

        The Registrant has previously filed with the Commission a written consent to service of process and power of attorney on Form F-X. Any change to the name or address of the Registrant's agent for service shall be communicated promptly to the Commission by amendment to the Form F-X referring the file number of the Registrant.

SIGNATURES

        Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereto duly authorized.

Registrant:		TALISMAN ENERGY INC.
		By:		/s/   M. JACQUELINE SHEPPARD
		Name:		M. Jacqueline Sheppard, Q.C.
		Title:		Executive Vice-President, Corporate and Legal, and Corporate Secretary

Date:    March 7, 2008

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EXHIBIT INDEX

Exhibits		Description
99.1		Certificates of the Chief Executive Officer and Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
99.2		Certificates of the Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
99.3		Consent of Ernst & Young LLP.
99.4		Consent of Michael Adams, Internal Qualified Reserves Evaluator.
99.5		Annual Information Form of the Registrant dated March 7, 2008.
99.6		Management's Discussion and Analysis of the Registrant dated March 7, 2008.
99.7		Comparative audited consolidated financial statements of the Registrant, including notes thereto, together with Independent Auditors' Report thereon as at and for the year ended December 31, 2007, the Independent Auditors' Report on Internal Controls Under Standards of The Public Company Accounting Oversight Board (United States) as at December 31, 2007, the Report of Management and the Management Report on Internal Control over Financial Reporting.
99.8		Statement of Corporate Governance Practices of the Registrant contained in Schedule A of the Registrant's Management Proxy Circular dated March 7, 2008, excluding the portion thereof which appears under the heading "Audit Committee Report".

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QuickLinks

Forward-Looking Information
NOTE TO UNITED STATES READERS— DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
CONTROLS AND PROCEDURES
AUDIT COMMITTEE FINANCIAL EXPERT
AUDIT COMMITTEE INFORMATION, AUDITOR FEES AND CODE OF ETHICS
OFF-BALANCE SHEET TRANSACTIONS AND CONTRACTUAL OBLIGATIONS
UNDERTAKING
CONSENT TO SERVICE OF PROCESS
SIGNATURES
EXHIBIT INDEX