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Talisman Energy Inc. (AN26)

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Thursday 20 October, 2005

Talisman Energy Inc.

Offer for Paladin Resources

Talisman Energy Inc.
20 October 2005

FOR IMMEDIATE RELEASE

20 October 2005



   Not for release, publication or distribution in or into the United States,
                           Canada, Australia or Japan


                             Recommended cash offer

                         by Goldman Sachs International

                                  on behalf of

                       Talisman Energy Resources Limited

                          a wholly owned subsidiary of

                              Talisman Energy Inc.

                                      for

                             Paladin Resources plc


Summary



•       The Boards of Talisman and Paladin are pleased to announce that they
have reached an agreement on the terms of a recommended cash offer for the whole
of the issued and to be issued share capital of Paladin.

•       Under the terms of the Offer, Paladin Shareholders will be entitled to
receive 355 pence per Paladin Share in cash.  On this basis, the terms of the
Offer value the existing issued share capital of Paladin at approximately £1,218
million. A Loan Note Alternative, guaranteed by Talisman, will be made
available.

•       The Offer Price represents a premium of:

-       approximately 17.8 per cent. to the average Closing Price of
approximately 301 pence per Paladin Share over the 30 day trading period ended
19 October 2005, being the last dealing day prior to the date of this
announcement; and

-       approximately 29.1 per cent. to the Closing Price of 275 pence per
Paladin Share on 19 October 2005.

•       Under the terms of the Offer, Paladin Shareholders will retain the right
to receive the interim dividend of 1.0p per Paladin Share announced on 21
September 2005.

•       Bidco has agreed to acquire 26,343,000 Paladin Shares from Aberforth
Partners and 25,000,000 Paladin Shares from Caledonia Investments, representing
in aggregate approximately 14.96 per cent. of the existing issued share capital
of Paladin.  In addition, Bidco has received irrevocable undertakings to accept
the Offer from certain Paladin Shareholders (not including Paladin Directors) in
respect of 21,611,614 Paladin Shares in aggregate, representing approximately
6.30 per cent. of Paladin's existing issued share capital.  These irrevocable
undertakings will cease to be binding in the event of a competing offer being
made for Paladin at a price which is at least 10 per cent. higher than the Offer
Price and will cease to be binding if the Offer lapses or is withdrawn.

•       The Paladin Directors, who have been so advised by JPMorgan Cazenove and
Merrill Lynch, consider the terms of the Offer to be fair and reasonable.  In
providing their advice to the Paladin Directors, JPMorgan Cazenove and Merrill
Lynch have taken into account the Paladin Directors' commercial assessments.
Accordingly, the Paladin Directors have unanimously agreed to recommend that
Paladin Shareholders accept the Offer, as they have themselves irrevocably
undertaken to do (or procure to be done) in respect of their own beneficial
holdings of Paladin Shares (representing, in aggregate taken together with the
holdings of related trusts and close family members, approximately 1.07 per
cent. of the existing issued share capital of Paladin).

•       Accordingly, Bidco has agreed to purchase or has received irrevocable
undertakings in respect of, in aggregate, 76,626,840 Paladin Shares,
representing approximately 22.33% per cent. of Paladin's existing issued share
capital.

•       Talisman estimates that Paladin's proved plus probable reserves are
approximately 190 million boe.  This estimate takes into account Talisman's
knowledge of some of the areas in which Paladin has interests.  Paladin recently
reported production of approximately 46,000 boe/d (1st half 2005).  Talisman
expects incremental production in 2006 to be in the range of 45,000-50,000 boe/d
with potential for over 70,000 boe/d in 2009.

Commenting on the Offer, Dr. Jim Buckee, President and Chief Executive Officer
of Talisman, said:

'This is an attractive opportunity for Talisman and is a logical continuation of
Talisman's successful business model.  These assets materially enhance
Talisman's production growth profile and offer significant cash generation
potential.  Execution of Paladin's exploration and development program will fit
comfortably into Talisman's normal operating activity in the North Sea.

'We expect the acquisition to be accretive to cash flow in 2006 and at least
through Talisman's detailed planning period which extends to 2008.  It will help
deliver production per share growth for Talisman which is now expected to be in
excess of 10% per annum from 2006 through 2008.'

Mr. Roy Franklin, Chief Executive Officer of Paladin, said:

'The Offer provides Paladin Shareholders with an opportunity to lock-in value at
an attractive premium reflecting the quality of the Paladin business and its
prospects in the current commodity environment.'

ENQUIRIES

For further information contact:

Talisman
Jackie Sheppard                                       +1 403 237 1183
David Mann                                            +1 403 237 1196
Chris LeGallais                                       +1 403 237 1957

Goldman Sachs International
Julian Metherell                                      +44 (0)20 7774 1000
Nigel Robinson                                        +44 (0)20 7774 1000

Paladin
Roy Franklin, CEO                                     +44 (0)20 7024 4500

JPMorgan Cazenove
Colin Carscadden                                            +44 (0)207 588 2828
Barry Weir                                                  +44 (0)207 588 2828
John Paynter (Corporate Broking)                            +44 (0)207 588 2828

Merrill Lynch
Simon Mackenzie-Smith                                       +44 (0)20 7628 1000
Russell Alton                                               +44 (0)20 7628 1000
Peter Tracey (Corporate Broking)                            +44 (0)20 7628 1000

College Hill
Alex Sandberg                                               +44 (0)20 7457 2020
Ben Brewerton                                               +44 (0)20 7457 2020


This summary should be read in conjunction with the full text of the following
announcement. Appendix III to the following announcement contains definitions of
certain terms used in this summary and the following announcement.

Goldman Sachs International, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial adviser and
corporate broker to Talisman and Bidco in connection with the Offer and no one
else and will not be responsible to anyone other than Talisman and Bidco for
providing the protections afforded to customers of Goldman Sachs International
or for providing advice in relation to the Offer.

JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting for Paladin in connection with the
Offer and no one else and will not be responsible to anyone other than Paladin
for providing the protections afforded to clients of JPMorgan Cazenove or for
providing advice in relation to the Offer.

Merrill Lynch International is acting exclusively for Paladin and no one else in
connection with the Offer and will not be responsible to anyone other than
Paladin for providing the protections afforded to clients of Merrill Lynch
International or for providing advice in relation to the Offer.

This announcement does not constitute, or form part of, any offer for, or any
solicitation of any offer for, securities.  Any acceptance or other response to
the Offer should be made only on the basis of information referred to in the
Offer Document which Bidco intends to despatch shortly to Paladin Shareholders
and, for information only, to holders of options under the Paladin Share Option
Schemes.

The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of their relevant jurisdiction.  Such
persons should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction.  Further details in relation to
overseas shareholders will be contained in the Offer Document.



Unless otherwise determined by Bidco, the Offer will not be made, directly or
indirectly, in or into or by the use of the mails of, or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or through any facilities
of a national securities exchange of, the United States, Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a violation of the
relevant laws of such jurisdiction, and the Offer, when made, should not be
accepted by any such use, means, instrumentality or facilities or from or within
the United States, Canada, Australia or Japan or any such other jurisdiction.
Accordingly, copies of this announcement are not being, and must not be mailed
or otherwise forwarded, distributed or sent in, into or from the United States,
Canada, Australia or Japan and all persons receiving this announcement
(including nominees, trustees and custodians) must not mail or otherwise
forward, distribute or send it in, into or from the United States, Canada,
Australia or Japan. Doing so may render invalid any purported acceptance of the
Offer.  Notwithstanding the foregoing, Bidco will retain the right to permit the
Offer to be accepted and any sale of securities pursuant to the Offer to be
completed if, in its sole discretion, it is satisfied that the transaction in
question can be undertaken in compliance with applicable law and regulation.

This announcement includes 'forward-looking statements' relating to the Offer
and the operations of Talisman and Paladin that are, by their nature, subject to
risks and uncertainties.  These risks and uncertainties include possible
competing bids or changes in the terms of the Offer; the risks of the oil and
gas industry, such as operational risks in exploring for, developing and
producing crude oil and natural gas and market demand; the uncertainty of
reserves estimates; the uncertainty of estimates and projections relating to
production, costs and expenses; potential delays or changes in plans with
respect to exploration or development projects or capital expenditures;
fluctuations in oil and gas prices, foreign currency exchange rates and interest
rates; health, safety and environmental risks; uncertainties as to the
availability and cost of financing; risks in conducting foreign operations (for
example, political and fiscal instability or the possibility of civil unrest or
military action); general economic conditions; the effect of acts of, or actions
against, international terrorism; and the possibility that government policies
or laws may change or governmental approvals may be delayed or withheld.  For
additional information identifying further factors, see Talisman's reports on
file with Canadian securities regulatory authorities and the United States
Securities and Exchange Commission.

Forward-looking statements only speak as of the date on which they are made, and
the events discussed herein may not occur.  Neither Talisman nor Bidco
undertakes any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent legally required.

The estimates of Paladin's proved plus probable reserves in this announcement
have been calculated based on the SPE/WPC definition for probable reserves.
Such estimates have been prepared internally by Talisman and no independent
reserves evaluator or auditor was involved in the preparation thereof.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Code, any person who, alone or acting
together with any other person(s) pursuant to an agreement or understanding
(whether formal or informal) to acquire or control securities of Paladin, owns
or controls, or becomes the owner or controller, directly or indirectly, of one
per cent. or more of any class of securities of Paladin is required to disclose,
by not later than 12.00 noon (London time) on the business day following the
date of the relevant transaction, every dealing in any relevant securities of
that company (or in any option in respect of, or derivative referenced to, any
such securities) during the period to the date on which the Offer becomes
effective or is withdrawn (or, if applicable, the Offer becomes or is declared
unconditional as to acceptances or lapses or is otherwise withdrawn).

Under the provisions of Rule 8.1 of the Code, any such dealings by Talisman or
Paladin or by any of their respective 'associates' (within the meaning of the
Code) must also be disclosed.

If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 (0) 20 7382 9026; fax +44 (0) 20 7638
1554.


FOR IMMEDIATE RELEASE

20 October 2005





   Not for release, publication or distribution in or into the United States,
                           Canada, Australia or Japan



                             Recommended cash offer

                         by Goldman Sachs International

                                  on behalf of

                       Talisman Energy Resources Limited

                          a wholly owned subsidiary of

                              Talisman Energy Inc.

                                      for

                             Paladin Resources plc



I.          Introduction

The Boards of Talisman and Paladin are pleased to announce that they have
reached an agreement on the terms of a recommended cash offer for the whole of
the issued and to be issued share capital of Paladin not already held by Bidco
or any of its Associates. The Offer will be made by Goldman Sachs on behalf of
Bidco, a wholly owned subsidiary of Talisman.

Under the terms of the Offer, Paladin Shareholders will be entitled to receive
355 pence per Paladin Share in cash.  On this basis, the terms of the Offer
value the existing issued share capital of Paladin at approximately £1,218
million. A Loan Note Alternative, guaranteed by Talisman, will be made
available.

The Offer Price represents a premium of:



-     approximately 17.8 per cent. to the average Closing Price of approximately
301 pence per Paladin Share over the 30 trading day period ended 19 October
2005, being the last dealing day prior to the date of this announcement; and

-     approximately 29.1 per cent. to the Closing Price of 275 pence per Paladin
Share on 19 October 2005.

II.      Recommendation

The Paladin Directors, who have been so advised by JPMorgan Cazenove and Merrill
Lynch, consider the terms of the Offer to be fair and reasonable.  In providing
their advice to the Paladin Directors, JPMorgan Cazenove and Merrill Lynch have
taken into account the Paladin Directors' commercial assessments.  Accordingly,
the Paladin Directors have unanimously agreed to recommend that Paladin
Shareholders accept the Offer, as they have themselves irrevocably undertaken to
do (or procure to be done) in respect of their own beneficial holdings of
Paladin Shares.



III.     Share purchases and irrevocable undertakings

Bidco has agreed to acquire 26,343,000 Paladin Shares from Aberforth Partners
and 25,000,000 Paladin Shares from Caledonia Investments, representing in
aggregate approximately 14.96 per cent. of the existing issued share capital of
Paladin.

The Paladin Directors have irrevocably undertaken to accept the Offer in respect
of their own beneficial holdings of, in aggregate, 3,672,226 Paladin Shares,
representing approximately 1.07 per cent. of the existing issued share capital.
 In addition, irrevocable undertakings to accept the Offer have been received
from Aberforth Partners in respect of 10,143,000 Paladin Shares, from Caledonia
Investments in respect of 5,468,614 Paladin Shares and from Henderson Global
Investors in respect of 6,000,000 Paladin Shares.

The irrevocable undertakings referred to above given by the Paladin Directors
will remain binding in the event of a competing offer being made for Paladin and
will cease to be binding only if the Offer lapses or is withdrawn.  The
irrevocable undertakings given by Aberforth Partners, Caledonia Investments and
Henderson Global Investors will cease to be binding in the event of a competing
offer being made for Paladin at a price which is at least 10 per cent. higher
than the Offer Price and will cease to be binding if the Offer lapses or is
withdrawn.

Accordingly, Bidco has agreed to purchase and has received irrevocable
undertakings in respect of, in aggregate, 76,626,840 Paladin Shares,
representing approximately 22.33 per cent. of Paladin's existing issued share
capital.



IV.     The Offer

The Offer, which will be subject to the conditions and certain further terms set
out in Appendix I and the further terms to be set out in the formal Offer
Document and Form of Acceptance, will be made on the following basis:


For each Paladin Share                                         355 pence in cash

The Paladin Shares will be acquired by Bidco pursuant to the Offer fully paid
and free from all liens, equitable interests, charges, encumbrances, rights of
pre-emption and other third party rights and/or interests of any nature
whatsoever and together with all rights now or hereafter attaching thereto,
including the right to receive and retain all dividends, interest and other
distributions declared, made or payable after the date of this announcement
other than the right to receive the interim dividend of 1.0p per Paladin Share
payable on 28 October 2005 in respect of those Paladin Shareholders who were on
the register at the close of business on 14 October 2005.



V.      Loan Note Alternative

As an alternative to some or all of the cash consideration to which they would
otherwise be entitled under the Offer, accepting Paladin Shareholders (other
than certain Overseas Shareholders) will be able to elect to receive Loan Notes
to be issued by Bidco on the following basis:



for every £1 of cash consideration under the Offer                    £1 nominal
value of Loan Notes



The Loan Notes, which will be governed by English law, will be guaranteed by
Talisman.  They will be unsecured and will be issued credited as fully paid in
amounts and integral multiples of £1 nominal value.  All fractional entitlements
to the Loan Notes will be disregarded and not paid.  No application will be made
for the Loan Notes to be issued or dealt in on any stock exchange and they will
not be transferable.



The Loan Notes will bear interest at 0.5 per cent below six-month sterling LIBOR
to be determined on the first business day of each interest period.  Interest
will be payable by half-yearly instalments in arrears (less any tax) on 30 June
and 31 December in each year.  The first payment of interest will be made on 30
June 2006 (the 'First Payment Date').



On the First Payment Date, interest will be paid in respect of the period from
(and including) the date of issue of the relevant Loan Notes to (but excluding)
the First Payment Date. The Loan Notes will be redeemable in whole or in part
for cash at the option of noteholders on 30 June 2006 and subsequently
semi-annually. Bidco will have the right to redeem all of the Loan Notes if the
aggregate nominal value of outstanding Loan Notes falls below £5 million at any
time during their term. If not previously redeemed, the final redemption date
will be 31 December 2009.



No Loan Notes will be issued unless valid elections have been received in
respect of at least £5 million in nominal value of Loan Notes. If insufficient
elections are received, Paladin Shareholders electing for the Loan Note
Alternative will instead receive cash in accordance with the terms of the Offer.



The Loan Note Alternative will be conditional upon the Offer becoming or being
declared unconditional in all respects in accordance with its terms.  The Loan
Notes will not be offered in the United States, Canada, Australia or Japan.



Further details of the Loan Notes and the Loan Note Alternative will be
contained in the Offer Document.



VI.     Non-solicitation, matching right and inducement fee



Paladin has entered into an arrangement with Bidco under which Paladin has
undertaken, amongst other things:



•      not to solicit or otherwise seek to procure  an Alternative Proposal,
enter into or continue discussions which relate to or may be expected to lead to
an Alternative Proposal, or release any third party from any standstill
agreement entered into in connection with an Alternative Proposal prior to 20
October 2005, except as required by the Code or in order for the Paladin
Directors to carry out their fiduciary duties;



•       to notify Bidco promptly of any approach made to Paladin in relation to
any Alternative Proposal or Superior Proposal and, in the case of a Superior
Proposal to provide Bidco with reasonable details of the terms proposed;



•       not to accept, recommend, approve or enter into any agreement to
implement a Superior Proposal and not to withhold, withdraw, change or modify
its recommendation in respect of the Offer, in each case unless Bidco shall have
failed, within 48 hours of receiving notice of the Superior Proposal, to confirm
to Paladin that it intends to increase its Offer to a price per share equal to
or greater than that provided under the Superior Proposal or to announce such
increase within 7 days of receiving notice of the Superior Proposal; and



•       to pay Bidco 1% of the total offer value (being approximately £12.5
million) if, following this announcement: (i) the Paladin Directors do not
recommend unanimously in the Offer Document that Paladin Shareholders accept the
Offer, or they withdraw or adversely modify their recommendation of the Offer or
agree or resolve prior to the date on which the Offer lapses or is withdrawn to
recommend a Third Party Transaction; and/or (ii) a Third Party Transaction
becomes or is declared unconditional in all respects or is completed provided
that the relevant Third Party Announcement is made prior to the date on which
the Offer which lapses or is withdrawn or, in certain circumstances, within one
month following the date on which the Offer lapses or is withdrawn.



VII.    Background to the recommendation



Since 1997, Paladin has followed a consistent strategy of acquiring interests in
oil and gas fields which offer attractive incremental investment opportunities
in combination with a disciplined exploration programme.



As a result of the successful delivery of this strategy, Paladin achieved record
financial results in 2004. Paladin's share price has reflected this strong
operating performance, having risen by approximately 68% in the twelve months
ending 19 October 2005. This operating performance, together with Paladin's
attractive portfolio of assets, has made Paladin an increasingly desirable
acquisition opportunity for larger participants in the oil and gas sector. In
reviewing the different strategic opportunities available for maximising
shareholder value, Paladin's Directors recently chose to explore the potential
for a corporate sale of Paladin. A formal process was carried out to establish
the willingness of potential acquirors to make formal offers for Paladin. This
process has resulted in the Offer now before Paladin Shareholders.



Against this background, the Paladin Directors consider the terms of the Offer
to be fair and reasonable and believe that the Offer provides Paladin
Shareholders with the opportunity to realise, in cash, their investment in
Paladin.



VIII.   Paladin current trading and prospects



Given the positive outlook for production and commodity prices, Paladin is set
for a very strong second half 2005 financial performance.  Development activity
in Paladin is at record levels and this should provide a major boost to
Paladin's production over the next two to three years, with Blane, Enoch and
Wood all scheduled to come on stream in late 2006.



IX.     Information relating to Paladin



Paladin is an independent oil and gas exploration and production company listed
on the London Stock Exchange under the symbol PLR. Paladin has a portfolio of
production and exploration assets in the U.K., Danish and Norwegian North Sea,
Australasia, Gabon, Indonesia, Romania and Tunisia.



Paladin has grown successfully over recent years, delivering strong results and
value to its shareholders. Paladin reported revenues of £284.4 million in the
year ended 31 December 2004 and generated operating profit of £119.2 million and
profit before taxation of £108.8 million.  Paladin reported net assets of £179.8
million as at 31 December 2004. For the six months ended 30 June 2005, Paladin
reported revenues of £177.4 million, operating profit of £107.6 million and
profit before taxation of £101.6 million.



Talisman estimates that Paladin's working capital and debt as of the anticipated
time of completion of the acquisition to be approximately £83.1m.  In addition,
Talisman estimates the mark to market liability associated with Paladin's
forward commodity contracts as of the anticipated time of completion of the
acquisition to be £72.5m.



Paladin is headquartered in London, has offices in Aberdeen, Perth (Australia)
and Stavanger (Norway) and currently employs 79 people worldwide.



X.            Background to and reasons for the Offer



North Sea



The acquisition of Paladin is a logical continuation of Talisman's proven North
Sea core area strategy.

Approximately three-quarters of Paladin's reserves and production are in the
North Sea.  The acquisition will add a significant operated core area at MonArb
in the Central North Sea (Montrose, Arbroath, Arkwright, Brechin, Wood).  With
the introduction of modern 4-D seismic a large number of prospects and leads
have been identified in MonArb.  Paladin will bring approximately 600,000 net
acres of exploration acreage in Norway.

Paladin's 40% working interest and operatorship of Production Licence 316 in
Norway will give Talisman a strategic position in the Egersund basin.  Talisman
acquired a 30% interest in this area earlier this year.  Talisman sees material
upside potential here from both exploration and development.

Reserves

Talisman estimates that Paladin's proved plus probable reserves are
approximately 190 million boe.  Talisman expects to invest more than C$1 billion
on Paladin acreage over the next three years, which represents a significant
increase over recent spending levels on these assets.

With this acquisition Talisman expects to deliver production per share growth in
excess of 10% annually through 2008.  Talisman believes it can grow current
Paladin production (currently 46,000 boe/d) to over 70,000 boe/d in 2009.

Hedging

In valuing the acquisition, Talisman has taken into account that Paladin has
hedged approximately 7,800 boe/d in 2006 and 6,600 boe/d in 2007.  Talisman may
layer in additional hedges with a view to ensuring that the acquired properties
pay for the anticipated capital programs at significantly reduced commodity
prices.

Cash flow and debt

Talisman expects the acquisition to be accretive to its cash flow in 2006.
Assuming US$55.00 per barrel Brent oil prices and C$2.07 pound sterling exchange
rate, this transaction is expected to increase Talisman's cash flow by over
C$500 million in 2006.

After the completion of the acquisition Talisman expects that its debt to cash
flow ratio will be in the 1.0 range by the end of 2006.  Talisman's debt to debt
plus equity ratio is expected to be approximately 0.4 by the end of 2006.

XI.        Information relating to Talisman and Bidco

Talisman, which is listed on the Toronto and the New York stock exchanges under
the symbol TLM is an independent North American based oil and gas producer with
global operations that was established in 1992. North America accounted for 47%
of total production and the North Sea 32% in 2004. Talisman also has production
in Southeast Asia, Trinidad and Tobago and Algeria. This diversity provides
Talisman with a range of opportunities to grow and add value and lessens the
risk associated with operating solely in one area. In addition, Talisman has an
11-year track record as a successful international operator.

For the financial year ended 31 December 2004, Talisman reported total revenue
of C$5.4 billion and generated net income of C$663 million.  Talisman reported
total assets of C$12.4 billion as at 31 December 2004.  Talisman reported
average daily production of 438,000 boe/d in 2004.

Bidco is a UK incorporated company, and an indirect wholly owned subsidiary of
Talisman, formed for the purposes of making the Offer. To date, Bidco has
engaged in no activities other than those incidental to its organisation and the
making of the Offer.

XII.       Financing

Talisman has obtained committed financing, arranged by Goldman Sachs
International and the Royal Bank of Canada, sufficient to enable Bidco to
satisfy in full the cash consideration payable to Paladin Shareholders and to
otherwise fulfill its commitments under the terms of the Offer. Further
information on the financing of the Offer will be set out in the Offer Document.

XIII.      Employees

Talisman has confirmed that the existing employment rights, including pension
rights, of all employees of Paladin will be fully safeguarded upon the Offer
becoming or being declared unconditional in all respects.



XIV.     Paladin Share Option Schemes

The Offer will extend to any Paladin Shares issued or unconditionally allotted
prior to the date on which the Offer closes as a result of the exercise of
options granted under the Paladin Share Option Schemes.

To the extent that such options have not been exercised, it is intended that
appropriate proposals will be made to holders of options granted under the
Paladin Share Option Schemes once the Offer becomes or is declared unconditional
in all respects.



XV.    Disclosure of interests in Paladin

Save as disclosed above, neither Bidco, nor any director of Bidco, nor so far as
Bidco is aware any person acting in concert with Bidco, owns or controls any
Paladin Shares or holds any option to acquire any Paladin Shares or has entered
into any derivative referenced to Paladin Shares ('Relevant Paladin Securities')
which remains outstanding.  Nor does any such person have any arrangement in
relation to Paladin Shares.  For these purposes 'arrangement' includes any
indemnity or option arrangement, any agreement or understanding, formal or
informal, of whatever nature, relating to Relevant Paladin Securities which may
be an inducement to deal or refrain from dealing in such securities.

In the interests of secrecy prior to announcement, Bidco has not made any
enquiries of certain parties who may be deemed by the Panel to be acting in
concert with it for the purposes of the Offer.

XVI.     Compulsory acquisition, de-listing and cancellation of trading

If the Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Bidco intends to:

•       apply the provisions of sections 428 to 430F of the Companies Act to
acquire compulsorily any remaining Paladin Shares to which the Offer relates on
the same terms as the Offer; and

•       procure that Paladin applies to the FSA for cancellation of the listing
of the Paladin Shares on the Official List and to the London Stock Exchange for
the cancellation of trading of Paladin Shares on the London Stock Exchange's
market for listed securities.

It is anticipated that the cancellation of Paladin's listing and admission to
trading will take effect no earlier than the expiry of 20 business days after
the date on which the Offer becomes or is declared unconditional in all
respects.  Cancellation of the listing and admission to trading would
significantly reduce the liquidity and marketability of any Paladin Shares not
assented to the Offer.

XVII.    General

The Offer Document and Form of Acceptance will be posted to Paladin Shareholders
and, for information only, to participants in the Paladin Share Option Schemes
as soon as practicable and, in any event, (save with the consent of the Panel)
within 28 days of the Announcement Date.  The full terms and conditions of the
Offer will be set out in the Offer Document and Form of Acceptance.  In deciding
whether or not to accept the Offer, Paladin Shareholders should rely on the
information contained in, and follow the procedures described in, the Offer
Document and Form of Acceptance.



In accordance with Rule 2.10 of the City Code, as at the close of business on 19
October 2005 the issued share capital of Paladin comprised 343,150,080 ordinary
shares of 10 pence each.  In addition, as at that date, options to subscribe for
and awards to acquire a total of 9,587,927 ordinary shares of 10 pence each
remained outstanding.  The International Securities Identification Number for
Paladin's Shares is GB0006920325.



The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of their relevant jurisdiction.  Such
persons should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction.  Further details in relation to
overseas shareholders will be contained in the Offer Document.



Unless otherwise determined by Bidco, the Offer will not be made, directly or
indirectly, in or into or by the use of the mails of, or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or through any facilities
of a national securities exchange of, the United States, Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a violation of the
relevant laws of such jurisdiction, and the Offer, when made, should not be
accepted by any such use, means, instrumentality or facilities or from or within
the Unites States, Canada, Australia or Japan or any such other jurisdiction.
Accordingly, copies of this announcement are not being, and must not be mailed
or otherwise forwarded, distributed or sent in, into or from the United States,
Canada, Australia or Japan and all persons receiving this announcement
(including nominees, trustees and custodians) must not mail or otherwise
forward, distribute or send it in, into or from the United States, Canada,
Australia or Japan. Doing so may render invalid any purported acceptance of the
Offer.  Notwithstanding the foregoing, Bidco will retain the right to permit the
Offer to be accepted and any sale of securities pursuant to the Offer to be
completed if, in its sole discretion, it is satisfied that the transaction in
question can be undertaken in compliance with the applicable law and regulation.

This announcement does not constitute, or form, any offer for, or any
solicitation of any offer for Paladin Shares.  The Offer will be contained in
the formal Offer Document and related Form of Acceptance which Bidco intends to
despatch shortly to Paladin Shareholders and, for information only, to holders
of options under the Paladin Share Option Schemes.

Talisman expects to release a press announcement to its shareholders explaining
the Offer shortly after this announcement had been released.  The announcement
to Talisman's shareholders will be available on Talisman's website.

Details of the sources and bases of certain information set out in this
announcement are included in Appendix II.

Appendix III contains definitions of the terms used in this announcement.

ENQUIRIES

For further information contact:

Talisman
Jackie Sheppard                                       +1 403 237 1183
David Mann                                            + 1 403 237 1196
Chris LeGallais                                       +1 403 237 1957

Goldman Sachs International
Julian Metherell                                      + 44(0)20 7774 1000
Nigel Robinson                                        + 44(0)20 7774 1000

Paladin
Roy Franklin, CEO                                     +44 (0)20 7024 4500

JPMorgan Cazenove
Colin Carscadden                                      +44 (0)207 588 2828
Barry Weir                                            +44 (0)20 7588 2828
John Paynter (Corporate Broking)                      +44 (0)20 7588 2828

Merrill Lynch
Simon Mackenzie-Smith                                 +44 (0)20 7628 1000
Russell Alton                                         +44 (0)20 7628 1000
Peter Tracey (Corporate Broking)                      +44 (0)20 7628 1000

College Hill
Alex Sandberg                                         +44 (0)20 7457 2020
Ben Brewerton                                         +44 (0)20 7457 2020



Goldman Sachs International, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial adviser and
corporate broker to Talisman and Bidco in connection with the Offer and no one
else and will not be responsible to anyone other than Talisman and Bidco for
providing the protections afforded to customers of Goldman Sachs International
or for providing advice in relation to the Offer.

JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting for Paladin in connection with the
Offer and no one else and will not be responsible to anyone other than Paladin
for providing the protections afforded to clients of JPMorgan Cazenove or for
providing advice in relation to the Offer.

Merrill Lynch International is acting exclusively for Paladin and no one else in
connection with the Offer and will not be responsible to anyone other than
Paladin for providing the protections afforded to clients of Merrill Lynch
International or for providing advice in relation to the Offer.


Appendix I -
Conditions and certain further terms
of the Offer



The Offer, which will be made by Goldman Sachs International on behalf of Bidco,
will comply with the rules and regulations of the FSA and the City Code.



Part A:             Conditions of the Offer



The Offer will be subject to the following conditions:





(a)       valid acceptances being received (and not, where permitted, withdrawn)
by not later than 3.00 p.m. on the first closing date of the Offer (or such
later time(s) and/or date(s) as Bidco may, with the consent of the Panel or in
accordance with the Code, decide) in respect of not less than 90 per cent. (or
such lower percentage as Bidco may decide) in nominal value of the Paladin
Shares to which the Offer relates, provided that this condition shall not be
satisfied unless Bidco and/or any members of the Talisman Group shall have
acquired or agreed to acquire, whether pursuant to the Offer or otherwise,
shares in Paladin carrying in aggregate more than 50 per cent. of the voting
rights then normally exercisable at general meetings of Paladin.



For the purposes of this condition:



(i)                  shares which have been unconditionally allotted but not
issued before the Offer becomes or is declared unconditional as to acceptances,
whether pursuant to the exercise of any outstanding subscription or conversion
rights or otherwise, shall be deemed to carry the voting rights they will carry
on being entered into the Register of Members of Paladin;



(ii)                the expression 'Paladin Shares to which the Offer relates'
shall be construed in accordance with sections 428 to 430F of the Companies Act
1985, as amended;



(iii)               Paladin Shares that cease to be held in treasury before the
Offer becomes or is declared unconditional as to acceptances are Paladin Shares
to which the Offer relates; and



(iv)              valid acceptances shall be treated as having been received in
respect of any Paladin Shares that Bidco or any other member of Talisman Group
shall, pursuant to section 429(8) and, if applicable, section 430E of the
Companies Act, be treated as having acquired or contracted to acquire by virtue
of acceptances of the Offer;







(b)                   the Office of Fair Trading in the United Kingdom
indicating, in terms reasonably satisfactory to Bidco, that the proposed
acquisition of Paladin by Bidco or any matter arising therefrom or related
thereto, will not be referred to the Competition Commission and the deadline for
appealing such a decision to the Competition Appeals Tribunal having expired,
with no appeal having been lodged;



(c)       save as publicly announced by Paladin in accordance with the Listing
Rules prior to 20 October 2005 or as contained in Paladin's accounts for the
year ended 31 December 2004 or in Paladin's interim report and accounts for the
six months ended 30 June 2005 or as fairly disclosed in writing to Talisman
prior to 20 October 2005, there being no provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
wider Paladin Group is a party or by or to which any such member or any of its
assets may be bound, entitled or subject, which in consequence of the Offer or
the proposed acquisition of any shares or other securities in Paladin or because
of a change in the control or management of Paladin or otherwise, could or might
result in to an extent which is material in the context of the wider Paladin
Group as a whole:



(i)                  any moneys borrowed by or any other indebtedness (actual or
contingent) of, or grant available to any such member, being or becoming
repayable or capable of being declared repayable immediately or earlier than
their or its stated maturity date or repayment date or the ability of any such
member to borrow moneys or incur any indebtedness being withdrawn or inhibited
or being capable of becoming or being withdrawn or inhibited;



(ii)                any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
obligation or liability arising or any adverse action being taken thereunder;



(iii)       any assets or interests of any such member being or falling to be
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged;



(iv)       the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member;



(v)                the rights, liabilities, obligations or interests of any such
member in, or the business of any such member with, any person, firm or body (or
any arrangement or arrangements relating to any such interest or business) being
terminated, adversely modified or affected;



(vi)              the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;



(vii)             any such member ceasing to be able to carry on business under
any name under which it presently does so; or



(viii)           the creation of any liability, actual or contingent, by any
such member,



and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
wider Paladin Group is a party or by or to which any such member or any of its
assets may be bound, entitled or subject, would or might reasonably be expected
to result, to an extent which is material in the context of the wider Paladin
Group, taken as a whole, in any of the events or circumstances as are referred
to in sub-paragraphs (i) to (viii) of this paragraph (c);



(d)       without prejudice to paragraph (c) above or (g) or (h) below, the
Secretary of State for Trade and Industry not having indicated an intention to
(i) revoke or recommend the revocation of any material exploration or production
licence held by Paladin or any of its subsidiaries or (ii) to require a further
change of control of Paladin and/or its subsidiaries following a change of
control of any of them as a result of the implementation of the Offer;



(e)       the Treasurer of the Commonwealth of Australia notifying Bidco (or a
related party thereof) in writing that there is no objection under the
Australian Federal Government's foreign investment policy or under the Foreign
Acquisitions and Takeovers Act 1975 to the acquisition of Paladin Shares by
Bidco (such notice being unconditional) or the Treasurer ceasing to be entitled
to make an order under Part II of the Foreign Acquisitions and Takeovers Act
1975 regarding the acquisition of those Paladin Shares by Bidco;



(f)        the receipt of the Norwegian Ministry of Petroleum and Energy's and
the Norwegian Ministry of Finance's approval of the transaction prior to
completion (to the extent the granting of such approval is applicable and/or
necessary);



(g)       save as publicly announced by Paladin in accordance with the Listing
Rules prior to 20 October 2005 or as contained in Paladin's accounts for the
year ended 31 December 2004 or in Paladin's interim report and accounts for the
six months ended 30 June 2005 or as fairly disclosed in writing to Talisman
prior to 20 October 2005, no government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or investigative body,
court, trade agency, association, institution or any other body or person
whatsoever in any jurisdiction (each a 'Third Party') having decided to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference, or enacted, made or proposed any statute, regulation,
decision or order, or having taken any other steps, in the case of any of the
foregoing which is or is likely to be material in the context of the Offer and
which would or might reasonably be expected to:



(i)                  require, prevent or delay the divestiture, or alter the
terms envisaged for any proposed divestiture by any member of the Talisman Group
or any member of the wider Paladin Group of all or any portion of their
respective businesses, assets or property or impose any limitation on the
ability of any of them to conduct their respective businesses (or any of them)
or to own any of their respective assets or properties or any part thereof
which, in any such case, is material in the context of the Talisman Group or the
wider Paladin Group in either case taken as a whole;



(ii)                require, prevent or delay the divestiture by any member of
the Talisman Group of any shares or other securities in Paladin;



(iii)               impose any limitation on, or result in a delay in, the
ability of any member of the Talisman Group directly or indirectly to acquire or
to hold or to exercise effectively any rights of ownership in respect of shares
or loans or securities convertible into shares or any other securities (or the
equivalent) in any member of the wider Paladin Group or the Talisman Group or to
exercise management control over any such member;



(iv)              otherwise adversely affect the business, assets, profits or
prospects of any member of the Talisman Group or of any member of the wider
Paladin Group to an extent which is material in the context of the Talisman
Group or the wider Paladin Group;



(v)                make the Offer or its implementation or the acquisition or
proposed acquisition by Bidco or any member of the Talisman Group of any shares
or other securities in, or control of Paladin void, illegal, and/or
unenforceable under the laws of any jurisdiction, or otherwise, directly or
indirectly, restrain, restrict, prohibit, delay or otherwise materially
interfere with the same, or impose additional conditions or obligations with
respect thereto, or otherwise challenge or interfere therewith;



(vi)              require any member of the Talisman Group or the wider Paladin
Group to offer to acquire any shares or other securities (or the equivalent) or
interest in any member of the wider Paladin Group or the Talisman Group owned by
any third party;



(vii)             impose any limitation on the ability of any member of the
wider Paladin Group to co-ordinate its business, or any part of it, with the
businesses of any other members to an extent which is material in the context of
the wider Paladin Group; or



(viii)           result in any member of the wider Paladin Group ceasing to be
able to carry on business under any name under which it presently does so,



and all applicable waiting and other time periods during which any such Third
Party could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of any
jurisdiction in respect of the Offer or the acquisition or proposed acquisition
of any Paladin Shares having expired, lapsed or been terminated;



(h)       all necessary filings or applications having been made in connection
with the Offer and all statutory or regulatory obligations in any relevant
jurisdiction having been complied with in connection with the Offer or the
acquisition by any member of the Talisman Group of any shares or other
securities in, or control of, Paladin in circumstances where non-compliance
would have a material adverse effect on the wider Paladin Group taken as a whole
or would be material in the context of the Offer and all authorisations, orders,
recognitions, grants, consents, licences, confirmations, clearances, permissions
and approvals reasonably considered necessary by Bidco or any member of the
Talisman Group for or in respect of the Offer or the proposed acquisition of any
shares or other securities in, or control of, Paladin by any member of the
Talisman Group having been obtained in terms and in a form reasonably
satisfactory to Bidco from all appropriate Third Parties or persons with whom
any member of the wider Paladin Group has entered into contractual arrangements,
in each case where the absence of such authorisation, order, recognition, grant,
consent, licence, confirmation, clearance, permission or approval would have a
material adverse effect on the wider Paladin Group taken as a whole or would be
material in the context of the Offer, and all such authorisations, orders,
recognitions, grants, consents, licences, confirmations, clearances, permissions
and approvals together with all material authorisations orders, recognitions,
grants, licences, confirmations, clearances, permissions and approvals
reasonably considered by Bidco as necessary to carry on the business of any
member of the wider Paladin Group remaining in full force and effect and there
being no notice or intimation of any intention to revoke or not to renew any of
the same at the time at which the Offer becomes otherwise unconditional;



(i)         save as publicly announced by Paladin in accordance with the Listing
Rules prior to 20 October 2005 or as contained in Paladin's accounts for the
year ended 31 December 2004 or in Paladin's interim report and accounts for the
six months ended 30 June 2005 or as fairly disclosed in writing to Talisman
prior to 20 October 2005, no member of the wider Paladin Group having, since 31
December 2004:



(i)                  save as between Paladin and wholly-owned subsidiaries of
Paladin or for Paladin Shares issued pursuant to the exercise of options granted
under the Paladin Share Option Schemes, issued, authorised or proposed the issue
of additional shares of any class;



(ii)                save as between Paladin and wholly-owned subsidiaries of
Paladin or for the grant of options under the Paladin Share Option Schemes,
issued or agreed to issue, authorised or proposed the issue of securities
convertible into shares of any class or rights, warrants or options to subscribe
for, or acquire, any such shares or convertible securities;



(iii)               other than to another member of the Paladin Group,
recommended, declared, paid or made or proposed to recommend, declare, pay or
make any bonus, dividend or other distribution whether payable in cash or
otherwise;



(iv)       merged or demerged with any body corporate or acquired or disposed of
or transferred, mortgaged or charged or created any security interest over any
assets or any right, title or interest in any asset (including shares and trade
investments) or authorised or proposed or announced any intention to propose any
merger, demerger, acquisition or disposal, transfer, mortgage, charge or
security interest, in each case, other than in the ordinary course of business;



(v)                save for intra-Paladin Group transactions, made or authorised
or proposed or announced an intention to propose any change in its loan capital;



(vi)              issued, authorised or proposed the issue of any debentures or
(save for intra-Paladin Group transactions), save in the ordinary course of
business, incurred or increased any indebtedness or become subject to any
contingent liability (which in either case is material in the context of the
wider Paladin Group taken as a whole);



(vii)             purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in sub-paragraph (i) above, made
any other change to any part of its share capital;



(viii)           implemented, or authorised, proposed or announced its intention
to implement, any reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement otherwise than in the ordinary course of business or
entered into or changed the terms of any contract with any director or senior
executive;



(ix)       entered into or varied or authorised, proposed or announced its
intention to enter into or vary any material contract, transaction or commitment
(whether in respect of capital expenditure or otherwise) which is of a long
term, onerous or unusual nature or magnitude or which is or could be materially
restrictive on the businesses of any member of the wider Paladin Group or the
Talisman Group or which involves or could reasonably be expected to involve an
obligation of such a nature or magnitude or which is other than in the ordinary
course of business;



(x)        (other than in respect of a member which is dormant and was solvent
at the relevant time) taken any corporate action or had any legal proceedings
started or threatened against it for its winding-up, dissolution or
reorganisation or for the appointment of a receiver, administrative receiver,
administrator, trustee or similar officer of all or any of its assets or
revenues or any analogous proceedings in any jurisdiction or had any such person
appointed;



(xi)              waived or compromised any claim otherwise than in the ordinary
course of business; or



(xii)             entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect to
or announced any intention to, or to propose to, effect any of the transactions,
matters or events referred to in this condition,



and, for the purposes of paragraphs (iii), (v) and (vi) of this condition, the
term 'Paladin Group' shall mean Paladin and its wholly-owned subsidiaries;



(j)         since 31 December 2004 and save as disclosed in the accounts for the
year then ended and save as publicly announced in accordance with the Listing
Rules by Paladin prior to 20 October 2005 or as contained in Paladin's interim
report and accounts for the six months ended 30 June 2005 or as fairly disclosed
in writing to Talisman prior to 20 October 2005:



(i)                  no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects of any
member of the wider Paladin Group and which is material in the context of the
wider Paladin Group taken as a whole;



(ii)                no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the wider Paladin Group is or may
become a party (whether as a plaintiff, defendant or otherwise) and no
investigation by any Third Party against or in respect of any member of the
wider Paladin Group having been instituted announced or threatened by or against
or remaining outstanding in respect of any member of the wider Paladin Group
which in any such case might reasonably be expected to adversely affect any
member of the wider Paladin Group to an extent which is material in the context
of the wider Paladin Group taken as a whole;



(iii)               no contingent or other liability having arisen or become
apparent to Bidco which might reasonably be expected to adversely affect any
member of the wider Paladin Group which is material in the context of the wider
Paladin Group taken as a whole; and



(iv)       no steps having been taken which might reasonably be expected to
result in the withdrawal, cancellation, termination or modification of any
licence held by any member of the wider Paladin Group which is necessary for the
proper carrying on of its business and which would or might reasonably be
expected to materially adversely affect the wider Paladin Group taken as a
whole;



(k)        save as fairly disclosed in writing to Talisman prior to 20 October
2005, Bidco not having discovered:



(i)                  that any financial, business or other information
concerning the wider Paladin Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the wider Paladin Group
is materially misleading, contains a material misrepresentation of fact or omits
to state a fact necessary to make that information not misleading;



(ii)                that any member of the wider Paladin Group, or partnership,
company or other entity in which any member of the wider Paladin Group has a
significant economic interest and which is not a subsidiary undertaking of
Paladin is subject to any liability (contingent or otherwise) which is not
disclosed in the annual report and accounts of Paladin for the year ended 31
December 2004 or the interim report and accounts for the six months ended 30
June 2005 and which is material in the context of the Offer or, as the case may
be, in the context of the wider Paladin Group taken as a whole; or



(iii)       any information which materially affects the import of any
information disclosed at any time by or on behalf of any member of the wider
Paladin Group and which is material in the context of the wider Paladin Group
taken as a whole; and



(l)         save as fairly disclosed in writing to Talisman prior to 20 October
2005, Bidco not having discovered that:



(i)                  any past or present member of the wider Paladin Group has
materially failed to comply with any and/or all applicable legislation or
regulation of any jurisdiction with regard to the disposal, spillage, release,
discharge, leak or emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health or animal health or
otherwise relating to environmental matters, or that there has otherwise been
any such disposal, spillage, release, discharge, leak or emission (whether or
not the same constituted a non-compliance by any person with any such
legislation or regulations, and wherever the same may have taken place) any of
which disposal, spillage, release, discharge, leak or emission would be likely
to give rise to any liability (actual or contingent) on the part of any member
of the wider Paladin Group and which is material in the context of the wider
Paladin Group taken as a whole; or



(ii)                there is, or is likely to be, for that or any other reason
whatsoever, any liability (actual or contingent) of any past or present member
of the wider Paladin Group to make good, repair, reinstate or clean up any
property or any controlled waters now or previously owned, occupied, operated or
made use of or controlled by any such past or present member of the wider
Paladin group, under any environmental legislation, regulation, notice, circular
or order of any government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body, agency, court,
association or any other person or body in any jurisdiction and which is
material in the context of the wider Paladin Group taken as a whole.



For the purposes of these conditions, the 'wider Paladin Group' means Paladin
and its subsidiary undertakings, associated undertakings and any other
undertaking in which Paladin and/or such undertakings (aggregating their
interests) have a significant interest and the 'Talisman Group' means Talisman
and its subsidiary undertakings, associated undertakings and any other
undertaking in which Talisman and/or such undertakings (aggregating their
interests) have a significant interest and for these purposes 'subsidiary
undertaking', 'associated undertaking' and 'undertaking' have the meanings given
by the Companies Act 1985, other than paragraph 20(1)(b) of Schedule 4A to that
Act which shall be excluded for this purpose, and 'significant interest' means a
direct or indirect interest in 20 per cent. or more of the equity share capital
(as defined in that Act).



Bidco reserves the right to waive, in whole or in part, all or any of the above
conditions, except condition (a).



Conditions (b) to (l) (inclusive) must be fulfilled or waived by midnight on the
21st day after the later of the first closing date of the Offer and the date on
which condition (a) is fulfilled (or in each such case such later date as the
Bidco may, with the consent of the Panel, decide).  Bidco shall be under no
obligation to waive or treat as satisfied any of the conditions (b) to (l)
(inclusive) by a date earlier than the latest date specified above for the
satisfaction thereof, notwithstanding that the other conditions of the Offer may
at such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such conditions may not be
capable of fulfilment.



If Bidco is required by the Panel to make an offer for Paladin Shares under the
provisions of Rule 9 of the Code, Bidco may make such alterations to any of the
above conditions as are necessary to comply with the provisions of that Rule.



This Offer will be governed by English law and be subject to the jurisdiction of
the English courts, to the conditions set out below and in the formal Offer
Document and related Form of Acceptance.



Part B:                        Certain further terms of the Offer



The Offer will lapse if it is referred to the Competition Commission, or if the
Offer constitutes a concentration with a community dimension within the scope of
Council Regulation (EEC) 139/2004 and the European Commission initiates
proceedings under Article 6(1)(c), or following a referral by the European
Commission under Article 9.1 there is a subsequent reference to the Competition
Commission before 3.00 p.m. on the first closing date of the Offer or the date
on which the Offer becomes or is declared unconditional as to acceptances,
whichever is later.



If the Offer lapses, it will cease to be capable of further acceptance and
persons accepting the Offer and Talisman shall thereupon cease to be bound by
acceptances submitted before the time the Offer lapses.



Unless otherwise determined by Bidco, the Offer will not be made, directly or
indirectly, in or into, or by use of the mails of, or by any means or
instrumentality (including, without limitation, facsimile transmission, telex,
telephone or e-mail) of interstate or foreign commerce of, or of any facility of
a national securities exchange of, the United States, Canada, Japan or Australia
and the Offer will not be capable of acceptance by any such use, means,
instrumentality or facility or from within the United States, Canada, Japan or
Australia.



Paladin Shares will be acquired under the Offer free from all liens, equities,
charges, encumbrances and other interests and together with all rights attaching
thereto other than the right to receive the interim dividend of 1.0p per Paladin
Share payable on 28 October 2005.








Appendix II - Sources and bases of Information



(i)                   The value placed by the Offer on the existing issued share
capital of Paladin is based on 343,150,080 Paladin Shares in issue on 19 October
2005, being the last dealing day prior to the date of this announcement.



(ii)                  The Closing Price on 19 October 2005, being the last
dealing day prior to the date of this announcement, is taken from the Official
List.



(iii)                Unless otherwise stated, the financial information relating
to Paladin is extracted from the audited consolidated financial statements of
Paladin for the relevant financial year and has been prepared in accordance with
IFRS.



(iv)                The financial information relating to Talisman Energy Inc.
is extracted from the audited consolidated financial statements of Talisman for
the year ended 31 December 2004 and has been prepared in accordance with
Canadian GAAP.



(v)                 An exchange rate of C$2.07/£1.00 has been used to estimate
the value of Paladin's working capital and debt and future commodity contracts,
referenced in Section IX.


Appendix III - Definitions

The following definitions apply throughout this announcement unless the context
requires otherwise:

'Acquisition'                             the proposed acquisition of Paladin by Bidco to be
                                          effected by means of the Offer

'Alternative Proposal'                    an offer or possible offer or proposal put forward by
                                          any third party which is not acting in concert with
                                          Bidco in respect of or for all or a significant
                                          proportion (being in excess of 25 per cent. when
                                          aggregated with shares already held by the third party
                                          and anyone acting in concert (as defined in the Code)
                                          with it) of the shares of Paladin or the sale or
                                          possible sale of the whole or any material part of the
                                          assets of the Paladin Group or in relation to a
                                          transaction which is otherwise inconsistent with
                                          consummation of the Acquisition, in each case howsoever
                                          it is proposed that such offer, proposal or transaction
                                          be implemented (whether legally binding or not)

'Announcement Date'                       20 October 2005

'Associates'                              shall have the meaning given by Section 430E of the
                                          Companies Act

'Bidco'                                   Talisman Energy Resources Limited

the 'Board'                               the board of directors of Paladin

'boe'                                     barrel of oil equivalent

'boe/d'                                   barrel of oil equivalent per day

'Canadian GAAP'                           Canadian Generally Accepted Accounting Principles

'Closing Price'                           the closing middle market price of a Paladin Share as
                                          derived from the Daily Official List on any particular
                                          day

'Code' or 'City Code'                     the City Code on Takeovers and Mergers as from time to
                                          time interpreted by the Panel

the 'Companies Act'                       the Companies Act 1985, as amended


'Daily Official List'                     the daily official list of the London Stock Exchange

'dealing day'                             a day on which dealings in domestic securities may take
                                          place on, and with the authority of, the London Stock
                                          Exchange

'first closing date'                      the date falling 21 days after the date on which the
                                          Offer Document is posted

'Form of Acceptance'                      the form of acceptance, election and authority relating
                                          to the Offer which will accompany the Offer Document

'FSA'                                     the Financial Services Authority

'Goldman Sachs'                           Goldman Sachs International

'JPMorgan Cazenove'                       JPMorgan Cazenove Limited

'LIBOR'                                   London Interbank Offered Rate

'Listing Rules'                           the listing rules of the FSA under Part VI of the
                                          Financial Services and Markets Act 2000

'Loan Notes'                              the floating rate guaranteed unsecured loan notes of £1
                                          each to be issued by Bidco pursuant to the Loan Note
                                          Alternative

'Loan Note Alternative'                   the arrangements pursuant to which Paladin Shareholders
                                          (other than certain Overseas Shareholders) who validly
                                          accept the Offer may elect to receive Loan Notes
                                          instead of some or all of the cash consideration to
                                          which they would otherwise be entitled under the Offer

'London Stock Exchange'                   London Stock Exchange plc

'Merrill Lynch'                           Merrill Lynch International

'Offer'                                   the recommended offer, including the Loan Note
                                          Alternative, to be made by Goldman Sachs on behalf of
                                          Bidco, a wholly owned subsidiary of Talisman, to
                                          acquire all of the issued and to be issued Paladin
                                          Shares on the terms and subject to the conditions to be
                                          set out in the Offer Document and the Form of
                                          Acceptance and, where the context so requires, any
                                          subsequent revision, variation, extension or renewal
                                          thereof

'Offer Document'                          the document to be sent to Paladin Shareholders which
                                          will contain the Offer

'Official List'                           the Official List of the UK Listing Authority

'Overseas Shareholders'                   Paladin Shareholders whose registered addresses are
                                          outside the United Kingdom or who are citizens or
                                          residents of countries other than the United Kingdom

'Paladin'                                 Paladin Resources plc

'Paladin Directors'                       the directors of Paladin

'Paladin Group'                           Paladin and its subsidiary undertakings

'Paladin Shareholders'                    holders of Paladin Shares

'Paladin Share Option Schemes'            the Paladin Approved Share Option Schemes, the Paladin
                                          Unapproved Share Option Scheme, the Paladin
                                          Savings-Related Share Option Scheme and the Long-Term
                                          Incentive Plan 2000

'Paladin Shares'                          the existing unconditionally allotted or issued and
                                          fully paid ordinary shares of 10 pence each of Paladin
                                          and any further such shares which are unconditionally
                                          allotted or issued fully paid, or credited as fully
                                          paid, before the date on which the Offer closes (or
                                          before such earlier date as Bidco may, subject to the
                                          Code, decide not being earlier than (a) the date on
                                          which the Offer becomes or is declared unconditional as
                                          to acceptances or (b) if later, the first closing date
                                          of the Offer)

'Panel'                                   the Panel on Takeovers and Mergers

'Superior Proposal'                       a bona fide Alternative Proposal which the Paladin
                                          Directors consider, acting reasonably and in good faith
                                          and after consultation with their legal and financial
                                          advisers, is likely to be completed on its terms taking
                                          into account all financial, regulatory and other
                                          aspects of such proposal (including the ability of the
                                          proposing party to consummate the transactions
                                          contemplated by such proposal) and which, if
                                          consummated, would be superior to the Offer from a
                                          financial point of view to Paladin Shareholders

'Talisman '                               Talisman Energy Inc.

'Third Party Announcement'                an announcement (a) made by a third party, which is not
                                          acting in concert with Bidco, of an intention to make
                                          an offer (whether or not subject to pre-conditions) for
                                          the entire ordinary share capital of Paladin, pursuant
                                          to Rule 2.5 of the Code; or (b) of any other proposal
                                          by Paladin or to Paladin shareholders, which involves,
                                          in any such case, a change of control of Paladin (other
                                          than the acquisition of control by Bidco and/or a
                                          person acting in concert with Bidco) or which involves
                                          the disposal of any interest in a material part of the
                                          business of Paladin or which is otherwise inconsistent
                                          with consummation of the Acquisition

'Third Party Transaction'                 an offer, proposal or transaction referred to in a
                                          Third Party Announcement.

'UK GAAP'                                 UK Generally Accepted Accounting Principles

'United States' or 'US'                   the United States of America, its territories and
                                          possessions, any state of the United States and the
                                          District of Columbia and all other areas subject to its
                                          jurisdiction

In this document:

the expressions 'associated undertaking', 'subsidiary', 'subsidiary undertaking'
and 'undertaking' have the meanings given by the Companies Act (but for this
purpose ignoring paragraph 20(1)(b) of Schedule 4A to the Companies Act); and
references to time are to London time.

$ means US dollars, the lawful currency of the United States of America.

C$ means Canadian dollars, the lawful currency of Canada.


CE052930001

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