In 2010, Tullow’s Business Performed Better than Ever, CEO Says (Ghana)

Tullow Oil plc (Tullow) issues this Trading Statement in respect of its financial year to 31 December 2010.

This is in advance of the Group’s Full Year Results, which are scheduled for release on 9 March 2011. The Operational Update is in respect of recent production, development and exploration activities. The information contained herein has not been audited and is subject to further review.

HIGHLIGHTS

Production and Development activities

• Jubilee Phase 1 production commenced on schedule at the end of November; currently producing at 50,000 bopd; ramp up to 120,000 bopd expected within six months.
• In Ghana, Tweneboa and Enyenra (formerly ‘Owo’) development options are under review.
• In Uganda, preparation of a legally binding Memorandum of Understanding to pave the way for the farm-down and development of all assets within the Lake Albert rift basin is progressing well.
• Working interest production averaged 58,100 boepd in 2010, in line with previous guidance, and is expected to average 86,000 to 92,000 boepd in 2011.

Exploration and Appraisal activities

• 83% exploration and appraisal success in 2010; four successes year-to-date in 2011.
• In Ghana, extensive appraisal programme commenced in Deepwater Tano; Tweneboa-3 well confirms significant Greater Tweneboa Area resource potential.
• Cormoran-1 well in Mauritania supports Cretaceous play; Down-dip Nsoga-2 appraisal well in Uganda proves upside potential.
• Oil discovery at Mercury-1 in Sierra Leone further underpins Cretaceous potential in Liberian basin.
• Further high-impact E&A programme consisting of approximately 40 wells planned for 2011.

Group operations and financials

• 2010 full year capital expenditure of $1.2 billion; Forecast 2011 expenditure of $1.5 billion.
• Net debt at 31 December 2010 was approximately $1.9 billion

COMMENTING TODAY, AIDAN HEAVEY, CHIEF EXECUTIVE SAID:

“In 2010, our business performed better than ever. We achieved exceptional exploration success and together with our partners delivered ‘First Oil’ on schedule in Ghana by year-end. In Uganda, while negotiations with the Government have taken longer than expected, they are progressing well. The new partnership of Tullow, CNOOC and Total remains fully committed and looks forward to commencing the basin-wide development this year. In 2010, we also expanded our portfolio and restructured our finances to position the Group to deliver further growth and continue as Africa’s leading independent oil company.”

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Source:Tullow Oil , January 27, 2011;