Analyst Bacton Day Presentation - Slide ... (PDF) - Tullow Oil plc

2005 Analyst DayUK Business UnitBuilding a balanced portfolio of Exploration and Production Assets

2005 Analyst Day – Bacton Gas TerminalIntroduction – Paul McDade

The Tullow footprintNW Europe□ Leading Gas Producer□ Mature basin Operator□ Growth through exploration,development and acquisitionAfrica□ Pan-African E&P business□ High impact exploration□ Growth through exploration,development and acquisitionAsia□ Materiality through organic growth□ High impact exploration□ Growth through exploration anddevelopment2005 Analyst Day – Bacton Gas Terminal

Tullow Growth StrategyPRODUCTION &DEVELOPMENTExploitation and expansion of Tullow’s current reserve base• 1H Reserve Replacement 97% before acquisitions• Ongoing development progress in Africa, UK and Asia• 2005/6: Organic growth to over 70,000 boepd by end 2006Broad portfolio with proven skills, knowledge and databaseEXPLORATION• H1 – Two successes from 3 wells in SNS, 1 success in Gabon on Niungo• Next – High impact programme due to start including Mauritania and Uganda.• 2006 onwards - continuing to build a high impact portfolioSelective acquisitions within core areasACQUISITIONS• 2001: £200 million of Southern North Sea assets acquired from BP• 2004: $570 million acquisition of Energy Africa• 2005: £200 million acquisition of Schooner and Ketch in the S. North SeaPORTFOLIOMANAGEMENTActive Portfolio Management• Focus on assets where we can add value and upside potential exists• Build positions where we have a material influence• 2005: Sale of UK oil and Congo (Brazzaville) offshore assets for total of $184 million2005 Analyst Day – Bacton Gas Terminal

Southern North Sea – Focussed ApproachCMS AreaHewett/Thames Area2001 acquisition of infrastructure, fields &acreage delivered two focus areas:□ CMS Area- Non-operated position- Established operator with no exit plan- Significant development and explorationupside- Infrastructure operating close to capacity□ Thames/Hewett/Bacton Corridor- Non-operated with minor operatedposition- No dominant operator- Significant development upside- Limited exploration potential- Infrastructure operating at ~30% ofcapacity- Unit operating costs becoming a key issue2005 Analyst Day – Bacton Gas Terminal

SNS Introduction – Alan Linn□ Management Team□ Business Framework□ Safety and Responsibility□ Business and Edge□ Agenda2005 Analyst Day – Bacton Gas Terminal

UK Business Unit – Organising for GrowthBusiness UnitManager – UKAlan LinnTechnical/TeamAssistantCathy EdgingtonRegional Asset MgrAlan MarshallOperated AssetsBacton/HewettOrwell/Horne & WrenUK FinanceManagerRob WhiteCommercial MgrMike SimpsonJV Assets & BusDevelopmentUK Development& EngineeringManagerMark AllenUK DrillingManagerCharlie TaylorExplorationAssetsChris FlavellAsset ManagerSchooner & KetchPeter EvansBUSINESS UNIT SUPPORT FUNCTIONSDrillingContracts &ProcurementGeoscientistsCommercialEH&SFinanceLegalEngineeringData/ITTechnologyBus Dev2005 Analyst Day – Bacton Gas Terminal

Tullow Integrated Management System (IMS)□ Tullow Corporate IMS sets 18standards and guidelines tosupport operations□ Assets meet defined standardsthrough local compliancedocuments.□ Internal and External audits forcompliance provide assurance atcorporate level.TullowIMSFrameworkTullowCorporate GuidelinesLocal Compliance DocumentOperational/Local Procedures2005 Analyst Day – Bacton Gas Terminal

Environment , Health and Safety (EH&S)□ Our EH&S policy sets the standard forperformance□ Add value by investing & empowering ourpeople and those we work alongside.□ In practice, this means:- Implementing safe systems of work- Horne and Wren development and Bacton,Hewett, Schooner and Ketch transitions- Certification of our EnvironmentalManagement System to ISO14001 in UK- Relationship building through UKOOA andother industry forums- Building strong working relationships withPartners and Contractors2005 Analyst Day – Bacton Gas Terminal

Corporate Social Responsibility (CSR)□ Proactive commitment to conduct ourbusiness with high standards ofintegrity.□ Corporate CSR report in 2006 topublicly report our 2005 performance.□ Provide support for Tullow personneland external sponsorship for projectswhich benefit local communitiesBacton :Environmental Liaison Committee –forum where Local Council Members,Police and Environmental Agency canparticipate and actively consult onterminal activity.2005 Analyst Day – Bacton Gas Terminal

SNS Business BackgroundDTI – maximise indigenous supply from mature basin□ Fallow fields initiatives□ Annual licensing rounds to churn acreage□ Promote licences to attract “small players”□ Low Cost mature basin approach – initiative to attract GoM players□ Stewardship drive to maximise reserves recoveryHSE - Recognition of changing environment□ Cost reduction does not have to compromise safety or the environment□ Openness to discuss “new concepts”Exit of Majors□ Mature basin - assets not material for the Majors and not attracting investment□ Acquisitions from BP, Shell, ExxonMobil, ENI, ConocoPhillips, ChevronTexaco2005 Analyst Day – Bacton Gas Terminal

SNS – Gas Pricing BackgroundGas Supply□ Transition from self-sufficiency to importation□ Increasing importance of indigenous gas8070Arco Schooner / Ketch 30/09/2005Forward Curve Comparison6050p/therm403020100Apr01Oct01Apr02Oct02Apr03Oct03Apr04Oct04Apr05Oct05Apr06Oct06Apr07Oct07Apr082005 Analyst Day – Bacton Gas Terminal

Southern North Sea – Focussed ApproachCMS AreaHewett/Thames Area2001 acquisition of infrastructure, fields &acreage delivered two focus areas:□ CMS Area- Non-operated position- Established operator with no exit plan- Significant development and explorationupside- Infrastructure operating close to capacity□ Thames/Hewett/Bacton Corridor- Non-operated with minor operatedposition- No dominant operator- Significant development upside- Limited exploration potential- Infrastructure operating at ~30% ofcapacity- Unit operating costs becoming a key issue2005 Analyst Day – Bacton Gas Terminal

SNS Business EdgeTullow Oil is a full-cycle E&P BusinessRisk/Equity ProfileFast Track DevelopmentsField Life ExtensionExplore Appraise Develop Produce AbandonInfra-Structure LeverageLow Cost OperationPortfolio ManagementAlternate UseDivestAcquire2005 Analyst Day – Bacton Gas Terminal

SNS Position in Tullow Portfolio□ 30% group commercial reserves and 20% of group contingentreserves□ Schooner and Ketch acquisition reserves confirmed at 330 bcf- Re-development moving ahead at pace- Material “early gains” from production stability□ SNS Gas production of 112mmscfd ytd 40% of group 2005production (with Alba)□ Horne & Wren development completed in June and productionexceeding expectation (110mmscfd gross/ 55 mscfd nett)□ Significant exploration potential in CMS area□ Working to further extend Hewett/Bacton economic life2005 Analyst Day – Bacton Gas Terminal

Summary – Strategy Implementation□ Tullow has built a significant platform for growth in the UK SNS□ Successfully pursuing Tullow’s four “value adding routes”- P&D, Exploration, Acquisitions & Portfolio management□ Continuing to leverage the team’s commercial, technical and operating skills□ Material activities in both SNS core areas in 2005 and beyond□ Opportunities to maximise benefits of favourable gas market□ Pursuing suitable opportunities to build a third core area (Dutch Sector?)The SNS is a key component of Tullow’s future2005 Analyst Day – Bacton Gas Terminal

AgendaThames/Hewett Area- Cost Control and Consolidation (Alan Marshall)CMS Area- Preparing for Further Growth (Mike Simpson)Schooner and Ketch- Re-development Programme (Peter Evans)Exploration- Maximising Near Field Potential (Chris Flavell)UK Gas Market- Marketing and Hedging (Brian Williams)Q&A2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalThames/Hewett Area – Alan Marshall

Thames/Hewett Corridor 2005□ Thames-Hewett-Bacton infrastructureposition purchased from BP – 2000/01□ Series of Bolt-On Acquisitions andoperatorships added□ Development, operatorships, and thirdparty opportunities continue to bepursuedLaps/BactonPipelineThames/BactonPipelineHewett/Bacton PipelineTullownon-operatedTullowoperatedLicensedacreageOpenacreage210 Kilometres102005 Analyst Day – Bacton Gas Terminal

Hewett/Bacton Case StudyHewett/Bacton□□Hewett Complex feeding into the Bacton terminalTerminal processes gas from the Hewett, Thames andLAPS complexesTullow Progress□□□□2000 – 20% non operated stake acquired from BP2003 – Additional 19% acquired from ConocoPhillips2003 - Operatorship transferred to Tullow - strategicimportance- Establish Operator capabilities and credentials- Build foundations for other operated activities- Controlling influence in Hewett field direction- Influence on Thames infrastructure through Bactoninitiatives2004 – Delivered 25% cost reduction targetHewett Growth Opportunities□ Focus on extending field life□- Continued pursuit of cost reductions- Maximise in-field reserves recovery- Marginal field developmentsGas storage opportunity2005 Analyst Day – Bacton Gas Terminal

Hewett Field Cost ChallengeComplex Infrastructure□ 3 platform central facility□ 3 normally unmannedinstallations□ 9 subsea wellsCost challenge□ 2004 – 25% costreduction achieved2005 Analyst Day – Bacton Gas Terminal

Hewett-Bacton Management ResponsibilitiesTullow OilPetrofac□ Business Support:□ JV Operator□ DTI Interface□ Subsurface Management□ Drilling□ Well Operations□ Field Development/Economics□ Legal and Commercial□ Finance□ Public Relations□ Facilities Management :□ HSEQ (Duty/COMAH holder)□ Emergency Response□ Production Services□ Maintenance and Inspection□ Ops & Maintenance Organisation□ Facilities Engineering□ Project Management□ Information Management□ Cost Control□ Planning and Co-ordination□ Supply Chain□ Logistics2005 Analyst Day – Bacton Gas Terminal

Hewett Field Cost ChallengeComplex Infrastructure□ 3 platform central facility□ 3 normally unmannedinstallations□ 9 subsea wellsCost challenge□ 2004 – 25% costreduction achieved□ 2005-2006 offshore- Simplification- Reliability improvements- De-manning□ Operational modelapplicable in other assets□ Bacton cost challenge2005 Analyst Day – Bacton Gas Terminal

Hewett Area Opportunities1718d18c170 Kilometres 1016b21b22b23b18b19b24b19e19d20b 1625a 25b 21Tullow non-operatedTullow operatedLicensed acreage262722aOngoingdevelopmentevaluation28a23aBlythe23c24a29Dawn30DeborahDelilahF22226 27Open acreageDelilah work over□ Delilah workover /and sidetracksidetrack 1Q 2006□ Zechstein velocitystring campaign12England28b3b4aB10Hewett4bBig Dotty5a5bZechsteinkalkopportunitiesLittle DottyDella48 4952 531a1bLemanF1F2□ Late life reservesrecovery – lowpressure operation□ Production efficiency– compressionoptimisation□ Third Party Business–Blythe, sour gasBacton2005 Analyst Day – Bacton Gas Terminal

Hewett– Extending Field LifeProduction Rate mmscfd45403530252015105Economic cut-off date whenTullow assumed operatorshipDelilah workoverZechstein Velocity Strings2005 ForecastPost OCC2 Min Econ Rate0Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-112005 Analyst Day – Bacton Gas Terminal

Thames Facilities Case StudyThames Facilites□ Central processing hub for five field groups,pipeline to Tullow’s Bacton terminal□ Operated by ExxonMobil, supported by Tullowsubsurface and commercial expertise300250Thames Facilities ThroughputTimeline□ 2000 – various interests acquired from BP□ 2003 – Agip’s interest in Thames acquired□ 2004 – ChevTex interest in Orwell acquired□ Jan 2005 – First gas from Arthur field□ June 2005 – First gas from Horne and Wren□ July 2005 – 2 nd Arthur dev well on lineThroughput (mmscfd)200150100Forward Plan□ Maintain facilities at capacity- Progress marginal developments- Attract further third party gas5002000 2001 2002 2003 2004 2005 20062005 Analyst Day – Bacton Gas Terminal

Horne and Wren Case StudyHorne and Wren Development□□Marginal fields development with 2 wells and aminimum facilities not normally manned installationTullow’s first UK operated development –delivered ontime and within budgetTimeline□□□□□2000 – 8% acquired from BP2003 – Additional 38% acquired from BP2004 – Remaining 54% and operatorship acquiredfrom Shell and 50% sold to Centrica.Mid 2004 – Project sanction2005 – First gas flowed in JuneForward Plan□□Maximise reserves recovery over 3-4 year field life.Seek re-use opportunities for platform facilities2005 Analyst Day – Bacton Gas Terminal

Thames FieldsEQUITY :Tullow 66.66%ExxonMobil (op) 23.33%Centrica 10.0%Thames NWLatimerProducing Fields:□ BGT Contract- Thames, Bure, Bure West, Yare, Wensum- Considering benefits of acceleratedproduction through blowdown profileBureDebenQThamesChalfontWensumFirst gas 1986□ Production to 30/6/2005 401.5 Bscf (plus 16.4Bscf from Deben)LemanThurneAmershamYareTullow proposed Infill Opportunities:□ Thurne (49/28-14 “L” discovery)□ Bure East□ Bure NorthCheshamS UpdipBushey2005 Analyst Day – Bacton Gas Terminal

Thames Area Third Party PotentialTullownon-operatedTullowoperated210 Kilometres 10LicensedacreageOpenacreage□ Potential developments have beenidentified and are under reviewusing Thames Infrastructure as anevacuation option.□ These are:–Tristan–Wissey–Fizzy–Camelot–Dutch sector□ Further exploration potential alsoexists2005 Analyst Day – Bacton Gas Terminal

Thames/Hewett Growth Potential – 2005 and beyond□ Establish a dominant and controlling position in existing Assets and in the area- Influence strategic direction of Assets□ Further consolidate Operatorship in the region- Extract additional cost savings through operational efficiencies and synergies□ Achieve 250 mmscfd throughput through the Thames facilities- Further Arthur area gas and production from Horne and Wren- Progress developments of marginal fields in the area□ Extend field life of Hewett infrastructure- Deliver Hewett OCC Phase 1&2 and additional in-field reserves.□ Gas storage potential in Hewett- Meeting with interested parties. Business development options currently being studied2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalCMS Area – Mike Simpson

CMS area – Focus on growthTullow’s game plan for CMS□ Acquire producing assets and strong infrastructure position□ Recognised under explored and exploited area□ Build a material position in operated exploration and production□ Work with established and committed OperatorSuccess to date□ Rapid development of CMS III, Munro□ Acquired significant op/non-operated exploration acreage□ Acquisition of Schooner & Ketch□ Commercial successes (gas contract, blend issues, third party gas)□ Prospectivity confirmedStill to do…□ Redevelopment of Schooner & Ketch□ Accelerate pace of exploration and development□ Expand and further align interests2005 Analyst Day – Bacton Gas Terminal

Greater CMS Area - 20016111671217a813a18440 9 Kilometres101415□ BP asset acquisition-Infrastructure and assetspurchased from BP2000/0143□ All assets non-operated□ Significant potential25a21aBoulton22bMurdoch22a-Field development (CMSIII DTI approval)-Exploration upside-Third party gas-Bolt-on acquisitions48 49Tullow non-operatedTullow operatedLicensed acreageOpen acreage2005 Analyst Day – Bacton Gas Terminal

Greater CMS Area – 2002/3611712813a11 12Kilometres0 9101415□ Development - CMS III1617a184316Hawksley18b44McAdam19b-Five unitised fields-Subsea development-Export via CMS facilities-First gas Aug ’02□ Exploration25a21aBoulton B1Boulton H22bMurdochWatt22a23b-Portfolio enhanced throughthe 20th and 21st Licensingrounds□ Commercial- Murdoch/Boulton depletioncontracts terminated48 49Tullow non-operatedTullow operatedLicensed acreageOpen acreage2005 Analyst Day – Bacton Gas Terminal

Greater CMS Area – 2004/5611712813a11 12Kilometres0 9101415□ Development - Munro44-Discovered Feb 04-First gas Oct 051617a1823b4325a1621aHawksleyMunro17b18bMurdoch22aMcAdam23b19b□ Schooner & Ketch-Completed end March 05-Uptime improved-Redevelopment planningunderway22b27b23a282930bBoulton B121cBoulton H26b26a 27aWatt22bSchoonerGarnet28aCaisterKetch28b□ Exploration- Operated success in 22ndLicensing Round- 3 wells in 20054805 1bTopaz2a2bMarjan3(N)4949/03-3Tullow non-operatedTullow operatedLicensed acreageOpen acreage2005 Analyst Day – Bacton Gas Terminal

Greater CMS Area - 2005 +611712813a11 12Kilometres0 9101415□ Development1617a184316Humphrey17bHawksleyMunro18b44Cygnus ComplexMcAdamHarrison19b-Numerous developmentopportunities-Coordinated/integratedprogramme – CMS IV?-Reservoir infill opportunities22b27b23b23a28482930bOpal25a21aBoulton21c26bSchoonerBrunel05 1bBoulton HB1WattMurdoch22a23b22b28aArrollGarnetKetch26a 27a28bTopaz2b2aMarjan3(N)YawlK3CameronK4Caister4949/03 3□ Schooner & Ketch-Drilling campaign to deliversignificant production andreserve upside□ ExplorationNew prospectivity identifiedUp to 4 expl wells planned for2006Tullow non-operatedTullow operatedLicensed acreageOpen acreageProspects & Leads2005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ BP CMS area acquisition – August 2000350Tullow Equity (CMS area)300250MMcfd200150BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ CMS III development – August 2002350Tullow Equity (CMS area)300MMcfd250200150CMS3BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ Munro development – October 2005350Tullow Equity (CMS area)300MMcfd250200150MunroCMS3BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ Schooner / Ketch acquisition – March 2005 (do nothing profile)350Tullow Equity (CMS area)300MMcfd250200150S&K BaseMunroCMS3BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ Schooner / Ketch - May 2005 (Tullow base plan)350Tullow Equity (CMS area)MMcfd300250200150S&K FirmS&K BaseMunroCMS3BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ Schooner / Ketch redevelopment plan 2006+MMcfd350300250200150Tullow Equity (CMS area)S&K UpsideS&K ContingentS&K FirmS&K BaseMunroCMS3BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ Potentially commercial developments / explorationupside - unoptimised, unriskedMMcfd350300250200150Tullow Equity (CMS area)Exploration upsideK3 areaS&K UpsideS&K ContingentS&K FirmS&K BaseMunroCMS3BoultonMurdoch100500July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area□ Tullow as an infrastructure owner : CMS current &potential tariff business (unoptimised, unrisked)CMS area throughput (Gross Pipeline)MMcfd800700600500400300Notional pipeline capacityFurtherexplorationsuccesspredictedCameronExploration upsideK3 areaCavendishHunterS&K UpsideS&K ContingentS&K FirmS&K BaseMunroCMS3CaisterBoulton200Murdoch1000July00July01July02July03July04July05July06July07July08July09July10July11July12July13July14July152005 Analyst Day – Bacton Gas Terminal

Greater CMS Area - Summary□ Aligned infrastructure and field equitypartnerships□ Significant growth in Tullow equitygas developments□ Tullow’s CMS portfolio all at UKmarket price and produced at highload factor□ Substantial tariff income potential(Tullow 17% ownership)□ Blending limits may constraincapacity but;-New blend management systemoptimises throughput-Relaxation of Wobbe limits negotiated atTheddlethorpe2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalSchooner and Ketch – Peter Evans

Schooner and Ketch AcquisitionDevelopment plan□ Signed SPA Dec 04□ Completed deal March 05□ Redevelopment plan Mid 05□ Rig Mobilisation Oct 05Operational & Commercial opportunities□ Improve facilities uptime□ OPEX synergies□ Well recompletions and infill drilling□ Schooner Exploration well□ Topaz development & tariff□ Other 3 rd party businessRationale□ Gas in place of 1,500bcf□ c. 350bcf (23%) recovered to date□ Potential to double rate and recovery2005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch – Facility Infrastructure/Organisation□ Tullow Equities : Schooner 90.35%Ketch 100%□ S&K Facilities Consist of Two NormallyUnmanned Installations (NUI) tiedback to the Murdoch Platform andCMS infrastructure by a 22 and 26 kmsub-sea pipelines.□ Tullow Operates S&K and ConocoPhilips operates Murdoch and CMS2005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch – Integration and Early Opportunities□ Asset Integration- Recruitment process commenced ahead of acquisition- Early integration into existing Bacton operations management structure- Rapid access to experienced operations team- Focussed facility integrity inspections during hand over- Detailed reviews of well and operational histories- Well failure modes understood and re-medial programmes developed- Work programme potential understood early□ “Quick Wins”- Production up from between 22-44 mmscfd, to 50-75 mmscfd- Facility uptime increased from low of 28% to steady +95%- Offshore data capture and analysis accelerated to help maintainredevelopment schedule- Redevelopment team in place early generating opportunities- Specialist drilling and work-over team recruited- Committed to Ensco 1012005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch – Re-development□ Redevelopment- New wells are a blend of experience and technology- Sand connectivity issues recognised and wells designed to maximiserecoveries- Ensco 101 secured for 18 months with firm programme- Balanced work programme is a combination of work-over and new wells- 2006 production >100mscfd- Plans in place to manage drilling and completion challenges- Significant upside potential identified□ Success from blend of experience, fresh ideas, pace and theapplication of technology2005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch : Early Success8070KetchSchooner60Throughput504030PlannedCMSshutdown2010Took overoperatorship0Jan’05 Feb’05 Mar’05 Apr’05 May’05 Jun’05 Jul’05 Aug’05 Sep’05□ Uptime for Schooner from 28% (the 6 weeks before operatorship) to 95%□ Well deliverability improvement – further gains when rig arrives2005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch : Well Optimisation ProjectKetch workovers and stimulation30Schooner workovers and stimulation□ Schooner25-Velocity strings and straddles onSchooner 1, 3, 4, 5, 6, 8 and 9Gas production mmscfd -100%2015105□ Ketch-Water shut-off and perforations(possible stimulations) Schooner 8-Perforation and stimulation Schooner4, tubing wash Schooner 9-Velocity string Ketch 5 and straddlesKetch – 1 and 3-Re-perforation and additionalperforations Ketch 1 and 3- Tubing wash Ketch - 60Jul05Jan06Jul06Jan07Jul07Jan08Jul08Jan09Jul09Jan10Jul102005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch: Schooner-10□ Schooner - 10- 60 degree deviated development well- 23 BCF incremental reserves- £ 15.9 MM Capex- Production peak 41 mmscfd- Declines to 20 mmscfd after 1 year- Up-dip attic well in main field (650 ft sand)Schooner - 10Gas production mmscfd403020100Jan-06 Jan-07 Jan-08 Jan-09 Jan-102005 Analyst Day – Bacton Gas Terminal

0126001270012800122001280012825123001220012500121001210012200124001210012100122001210012000442802119394428K111959123001260012700127001270012600125001240012200122001210012100125001230012600129001250012800126001250012400123001210012100122001240012600127001280012901220012300122001350012300Schooner & Ketch : Ketch – 7, 4st & 8129001280012700□ Ketch - 7- Horizontal development well in Carboniferous1260012500- 23 BCF incremental reserves- Production peak 30 mmscfd- Declines to 15 mmscfd after 1 year12500442801123794428K4z123491260012300127001240012800125001240012700□ Ketch - 8- Four legged multi-lateral128001290013400131001250013200133001350013300134001350013600- 15 BCF incremental reserves- Production peak 65 mmscfd- Declines to 26 mmscfd after 1 year- Contingent on KA-7 horizontal drilling success1330013400136002005 Analyst Day – Bacton Gas Terminal4428K2121824428K6y 4428K6z12543 12536KA084428K512253Tra jectoryTrajectory12825KA071282512825□ Ketch – 4st- Replacement well for KA04KA04stTrajectory- 12 BCF incremental reserves- Production peak 20 mmscfd- Declines to 12 mmscfd after 1 year1282512825

Schooner & Ketch : Re-Development Work Programme Phase 1□ Development potential recognised- Early rig commitment and 12 months infill drilling campaign firm- Increase wellbore utility with re-perforation and stimulation programmes- Mechanical interventions to accelerate production- New field potential attractive – NW SchoonerBase – further activityConcurrent well optimisation workContingent resourcesRig moveUpside2005 2006Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSchooner SA10 (attic)Schooner – perforations, stimulationSchooner (5 workovers – vel/strad)Ketch KA07 (three stage horizontal)Ketch – perforations, stimulationKetch (3 workovers)Ketch KA04 (horizontal sidetrackKetch KA08 (4 leg vert multi-lateral)2007 2008Jan Feb Mar Apr May Jun JulAug Sep Oct Nov DecJanFeb Mar AprSchooner NW appraisal (SB-1 locationSchooner SA-07 sidetrackSchooner SA2 workoverSchooner SA-11 development wellSchooner NW development well 2Schooner Ketch follow-up wellYawl/SW Ketch exploration2005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch : Schooner NW Appraisal□ NW Schooner Appraisal- 140 BCF Gas In Place (success)-New locationGWC- Drill Q4 2006- High production rates- Three legged multi-lateral2005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch : Success Case Production Profile□□□Base further activity is 15 months drilling activity – 5 wells, 9 workovers and well stimulationTotal Drilling and Optimisation Capex £88 MM for the 2005 - 2006 firm programmeFacilities capacity upgrades and metering200180160UpsideContingentBase - further activityBase - no further activityGas Production mmscfd1401201008060````40200Oct-05Apr-06Oct-06Apr-07Oct-07Apr-08Oct-08Apr-09Oct-09Apr-10Oct-10Apr-11Oct-11Apr-12Oct-12Apr-13Oct-13Apr-14Oct-14Apr-15Oct-152005 Analyst Day – Bacton Gas Terminal

Schooner & Ketch : New Exploration Acreage□ Arrol 44/26a to NE of Ketch(100% Tullow)43/23bEndeavour 50%Tullow 50%□ Ketex 49/3 south of Ketch– good material prospectwest of Ketex discovery(100% Tullow)□ Stephanian Play – West ofSchooner (GdF operateexploration phase, Tullow33.33%)Arrol44/28a & 49/3(p)Tullow 100%Ketex43/30b, 48/5(p)& 49/1(p)GDF 33%Tullow 33%Endeavour 33%2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalExploration – Chris Flavell

Ingredients for Exploration Success□ Existing infrastructure position□ Pragmatic operators of nearby infrastructure□ High quality and experienced team□ Good database□ Acreage position- Growth of UKCS portfolio- Focus on CMS exploration2005 Analyst Day – Bacton Gas Terminal

Thames & Hewett Regional MapAcreage post BP acquisitionBlythe23a4849 50Gawain210 Kilometres 1029 30 28 29c26aBig DottyDeborahDawnDelilahBureWensumDellaDebenHewettLittle DottyYare3d4aThamesOrwell29d30b26bFizzyEnglandBacton4a525a53Horne3c4bWren4cWellandWissey1a54Tullownon-operatedTullowoperatedLicensedacreageOpenacreage2005 Analyst Day – Bacton Gas Terminal

Thames & Hewett Regional MapCurrent acreage positionOngoing development evaluation210 Kilometres 1022aBlythe23a48Delilah developmentwell late 2005Thurnedevelopmentopportunity49 50GawainHewett – Significantreduction in operatingcosts in 2004 & 2005EnglandBacton29 30 28 26aBig DottyDawn4aHewett525aTullownon-operatedTullowoperatedLicensedacreageOpenacreageDeborahDelilahZechsteinkalk infill opportunitiesDellaLittle DottyCheshamexplorationopportunityArthurClear move toOperatorshipBureDeben3a53Horne and Wren development1 st gas June 20053bThamesYareHorne3cWensum4b4aWren4aWellandOngoingdevelopmentevaluationWissey30bOngoingdevelopmentevaluation1aOrwell26bFizzy542005 Analyst Day – Bacton Gas Terminal

CMS Regional MapAcreage post BP acquisition611712813a0 9 Kilometres101415□ 4 blocks441617a184325a21aMurdoch22aBoulton22b48 49Tullow non-operatedTullow operatedLicensed acreageOpen acreage2005 Analyst Day – Bacton Gas Terminal

CMS Regional MapCurrent acreage position6111671217a23 rd RoundAwards 2005813a1823b43Opal exploration success 200525a11 12Munro exploration success 200444/16 explorationwell 20061621aMunro17bHawksleyMurdoch22a18b44McAdam23bKilometres0 910141544/12 appraisalwell 200619b44/19b explorationwell 2006K3 exploration success 2005□ 29 blocks22b27b23aSchooner/Ketch 28 acquisition 29 2005 30bBoulton B121cBoulton H26b22bWatt28aCaister44/23b explorationwell 2006SchoonerGarnet26a27aKetch28b23 rd Round Awards 200523 rd RoundAwards 20054805 1bTopaz2a2bMarjan3(N)4949/03-349/3a explorationwell 2006 ?Tullow non-operatedTullow operatedLicensed acreageOpen acreage2005 Analyst Day – Bacton Gas Terminal

CMS Exploration Focus□ Play types□ Identifying the Lower Ketch play□ Portfolio summary□ Potential future activity levels2005 Analyst Day – Bacton Gas Terminal

CMS Exploration Focus – Play Types□ Structural fault blocks- Principal target Westphalian B Murdoch sands- Murdoch, Caister, McAdam, Boulton H- Good productivity- Easier to recognise, therefore more mature play□ Deep Carboniferous structure- Principal target Namurian sands- Cavendish, Kepler, Trent- Difficult to map reservoir on seismic data- Moderate/good productivity, despite age and depth□ Combined structural/stratigrahic play- Principal target Lower Ketch Westphalian C/D sands- K3, Munro, Opal, Boulton B, Schooner & Ketch- Excellent productivity- Dificult to locate, under-explored2005 Analyst Day – Bacton Gas Terminal

CMS Area – Play Concept – Westphalian C/DBPUSilverpit – must sealBPUTop RotliegendesSeismic MarkerCarboniferousIsopachsBase MurdochKEY:Lower Ketch 2 Reservoir(similar to Munro, K3, Hawksley, Murdoch K & Boulton B)Reliable seismic picks atTop Rotliegendes and Base Murdoch.2005 Analyst Day – Bacton Gas Terminal

CMS Area – Play Concepts – Westphalian C/D□ Reservoir intervalseismically opaque□ Top Seal horizon onlysporadically imaged□ Reliance on substantialwell data to buildinterval isopachs□ Note Plattendolomite‘hole’2005 Analyst Day – Bacton Gas Terminal

Efficiency by student flow model in Govt Institutes (Kachi to Class 5)DIR BALABoys & GirlsYearKachi Class-1 Class-2 Class-3 Class-4 Class-5 TOTAL2012-13 Enrolment27982 25489 22146 19212 17058 17338 129225AverageStudy TimePupil-yearwasted2013-14 Enrolment36219 22842 22324 19483 16687 16253 133808Total Output = 494.5Graduate 6.74Repeaters 5692013-14 Repeaters4091 2993 2084 1814 1526 2666 15174Total Pupil year = 4867Dropout 2.96Drop-outs 1468AnalysisTotal Drop-outs = 496.8Cohort 4.80Total 2038Admit Class-1 Class-2 Class-3 Class-4 Class-5Total Repeaters = 569.3Survival rate = 49.45%Promotion Rate (p)Repetition Rate (r)70.93% 79.41% 79.78% 78.91% 79.65% 84.62%14.62% 11.74% 9.41% 9.44% 8.95% 15.38%Years input per graduate = 9.84Drop-out Rate (d)14.45% 8.85% 10.81% 11.64% 11.40% 0.00%Coefficient of efficiency = 60.95%Survival Rate 100% 83% 75% 66% 57% 50%aDIR BALABoysYearKachi Class-1 Class-2 Class-3 Class-4 Class-5 TOTAL2012-13 Enrolment16548 14691 12967 11719 10949 12027 78901AverageStudy TimePupil-yearwasted2013-14 Enrolment21294 13570 13213 11822 10630 11225 81754Total Output = 568.5Graduate 6.79Repeaters 6332013-14 Repeaters2406 1747 1269 1155 1044 2234 9855Total Pupil year = 5145Dropout 2.837Drop-outs 1190AnalysisTotal Drop-outs = 419.5Cohort 5.05Total 1823Admit Class-1 Class-2 Class-3 Class-4 Class-5Total Repeaters = 632.7Survival rate = 56.85%Promotion Rate (p)Repetition Rate (r)71.45% 81.30% 82.26% 81.80% 82.12% 81.43%14.54% 11.89% 9.79% 9.86% 9.54% 18.57%Years input per graduate = 9.05Drop-out Rate (d)14.01% 6.81% 7.95% 8.35% 8.35% 0.00%Coefficient of efficiency = 66.30%Survival Rate 100% 84% 77% 70% 64% 57%aDIR BALAGirlsYearKachi Class-1 Class-2 Class-3 Class-4 Class-5 TOTAL2012-13 Enrolment11434 10798 9179 7493 6109 5311 50324AverageStudy TimePupil-yearwasted2013-14 Enrolment14925 9272 9111 7661 6057 5028 52054Total Output = 395.3Graduate 6.64Repeaters 4822013-14 Repeaters1685 1246 815 659 482 432 5319Total Pupil year = 4495Dropout 3.061Drop-outs 1836AnalysisTotal Drop-outs = 599.6Cohort 4.460Total 2318Admit Class-1 Class-2 Class-3 Class-4 Class-5Total Repeaters = 482.5Survival rate = 39.53%Promotion Rate (p)Repetition Rate (r)70.19% 76.83% 76.28% 74.40% 75.23% 91.87%14.74% 11.54% 8.88% 8.79% 7.89% 8.13%Years input per graduate = 11.37Drop-out Rate (d)15.07% 11.63% 14.84% 16.80% 16.88% 0.00%Coefficient of efficiency = 52.77%Survival Rate 100% 82% 71% 60% 49% 40%a53

Depth Converted Seismic & Geological ModelN44/18-3K344/23-8K4S-12420-1260044/18-3 44/23-8Hard kick-12420-1260013 km2005 Analyst Day – Bacton Gas Terminal

Summary and ConclusionSNS exploration still ‘alive and kicking’□ Technical- Carboniferous is still under-explored- Multiple plays in Carboniferous (Namurian, Westphalian B)- Technological advancements still to be made, esp seismic□ Commercial- Infrastructure access improving- High gas prices are rendering smaller prospects commercial- Smaller Independents influencing activity levels- Future activity levels probably linked to Majors’ exit strategyTullow is well positioned to take advantage2005 Analyst Day – Bacton Gas Terminal

UK Gas Market & Hedging□ UK Gas Market- Overview- Pricing- UK Supply/Demand□ Tullow UK Gas Portfolio□ Hedging/IAS392005 Analyst Day – Bacton Gas Terminal

UK Gas Market□ Overview2005 Analyst Day – Bacton Gas Terminal

Markets Overview□ Oil and gas prices recently at record highs□ Oil market supply/demand tight□ UK believed to be short of peak winter gas; UK indigenousdecline□ Eon acquisition of Caledonia; security of supply2005 Analyst Day – Bacton Gas Terminal

UK Gas Market Liberalisation□ Gas & Power liberalisation (& utility un-bundling) on EU agenda□ Drive towards competitive gas markets- 1996: BG demerges into Transco & Centrica- 1998: Entire gas supply market open to competition□ Growth of liberalised UK spot market (most competitive in Europe) andhubs (Bacton)Liberalised UK market doesn’t equal low price environment…2005 Analyst Day – Bacton Gas Terminal

UK Gas Market Observations□ The UK government, in its 2003 White Paper, identified major challengesfacing UK Energy including- Decline of UK’s indigenous energy supplies- Modernisation / update of energy infrastructure is required□ Indigenous UK gas supply /demand gap is now a reality□ UK NBP pricing now reflecting shortfall fears□ UK import infrastructure (pipe and LNG) builds to fill indigenous supplyshortfall; consider offtake flexibility to arbitrage markets□ Future Questions- Linkage between markets and gas on oil pricing?- Continued oil indexation dominating European pricing; UK/Europe convergence?- Globalisation of gas due to increasing role of LNG; Europe/USA convergence?2005 Analyst Day – Bacton Gas Terminal

UK Gas Market□ Pricing2005 Analyst Day – Bacton Gas Terminal

Gas Pricing BackgroundGas Supply□ Transition from self-sufficiency to importation□ Increasing importance of indigenous gas8070Arco Schooner / Ketch 30/09/2005Forward Curve Comparison6050p/therm403020100Apr01Oct01Apr02Oct02Apr03Oct03Apr04Oct04Apr05Oct05Apr06Oct06Apr07Oct07Apr082005 Analyst Day – Bacton Gas Terminal

UK Gas NBP: Spot History and Swaps120UK Gas NBP Historical Prices, Calendar 2006 and Calendar 2007 Swaps11010090GB Pence/therm807060504030Calendar 2007Calendar 20062010Spot HistoryJan Apr Jul Oct Jan Apr Jul Oct2004 2005Past performance is not indicative of future performance.Source: trading history as at 6 Oct052005 Analyst Day – Bacton Gas Terminal

Dated Brent: Spot History and Swaps70Dated Brent Historical Prices, Calendar 2006 and Calendar 2007 Swaps656055Calendar 2006USD/barrel504540Spot History3530Calendar 20072520Jan Apr Jul Oct Jan Apr Jul Oct20042005Past performance is not indicative of future performance.Source: trading history as at 6 Oct052005 Analyst Day – Bacton Gas Terminal

UK Gas NBP and Dated Brent Comparison2.8Dated Brent Calendar 2006 relative to UK Gas NBP Calendar 20062.62.42.2Dated BrentCalendar 20062.01.81.61.41.2NBP Calendar 20061.00.8Jan Apr Jul Oct Jan Apr Jul Oct2004 2005Past performance is not indicative of future performance.Source: trading history as at 6 Oct052005 Analyst Day – Bacton Gas Terminal

Spot, Quarterly and Winter 04 Averages1201101st August 2003 NBP Win05 vs History3rd August 2005SpotQuarter averageWin04 average=33 pence/therm1009080706050403020100Oct Jan Apr Jul Oct Jan Apr Jul2003 2004 20052005 Analyst Day – Bacton Gas Terminal

Natural Gas: Current Annual Forward Prices p/therm65"Gasunie"60US NGNBPZeebrugge55504540352006 2007 2008 2009 2010 2011 2012Note: Pricing as of Close of Business 05 October 2005. Source: Goldman Sachs International“Gasunie” is based on our understanding of what the current lagged gasoil and fuel-oil linked formula is2005 Analyst Day – Bacton Gas Terminal

UK Gas Market□ UK Supply/Demand2005 Analyst Day – Bacton Gas Terminal

Transco View of Implied Import Requirement2005 Analyst Day – Bacton Gas Terminal

Transco View of Supply/Demand Balance2005 Analyst Day – Bacton Gas Terminal

New UK Infrastructure: Pipeline & LNG2005 Analyst Day – Bacton Gas Terminal

UK/EuropeHUELVACARTAGENAALGERIAN GASALGERIAN GAS2005 Analyst Day – Bacton Gas Terminal

Globalisation: LNGMajor LNG Supply Routes2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalTullow UK Gas Portfolio

Tullow UK Gas Portfolio: Contracted Gas□ Diversified SNS portfolio (~15 producing fields)□ Gas landed at Bacton (~35%) & Theddlethorpe (65%)□ Significant migration from Contracted to Uncontracted gas since 2000- Then ~60% contracted- Murdoch and Boulton contracts terminated- 2006 ~15% contracted□ Remaining contracted gas:- Thames: Field dedicated depletion contracts (~39p/therm)- RWE: Schooner/Ketch supply contract (19p/therm)- Eon: Supply contract (~28p/therm; )2005 Analyst Day – Bacton Gas Terminal

Tullow UK Gas Portfolio: Uncontracted Gas□ Originally uncontracted gas marketed via Beach aggregator (Amerada);then acquired by TXU!□ Physical now marketed via Tullow gas marketing group (based inNewcastle)□ Physical currently sold at Beach via good credit quality counterparties(remember Enron, TXU!)□ Will move to shipping soon with better liquidity□ Gas sold at benchmarks including D-1 and M-1 indices□ Hedging via financial products (up to 3 years forward)2005 Analyst Day – Bacton Gas Terminal

Offshore to NBPBeach TradingRetro TradingTraditional swingcontract Delivery PointCash outNBP TradingGasProcessingFacilityFlangeTranscoEntryFacilityNTSNBPEntry CapacityCVSLOffshoreStorageLDZ End UsersDTIOfgem2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalHedging/IAS39

Hedging: Objectives□ Improved security of cash flow and liquidity (banking lines)□ Reduce exposure to price volatility□ Manage downside price risk□ Improved ability to fund investments (incl. discretionary capex)□ Match underlying physical commodity offtake (note IAS39)□ Build revenue predictibility (Budgets, bank price decks, marketbenchmarks)2005 Analyst Day – Bacton Gas Terminal

Hedging: Commodity Hedge Parameters□ Minimum Hedge Levels-Target 30% of all Oil and Uncontracted Gas entitlements from producing interests in any 12month period□ Maximum Hedge Levels – Delivery Risk-70% cap on hedging volumes in any calendar year – no intention to reach this level□ Term-Previously credit challenges; now liquidity through at least 2008□ Volumes/Frequency-Tend to hedge regularly in relatively small volumes□ IAS39-Hedge instruments should be compliant to retain hedge accounting‣…no price levels specified although hedging in excess of bank price deck creates debtliquidity2005 Analyst Day – Bacton Gas Terminal

Hedging: How & Who With□ How:- Swaps ‣ downside protection; no exposure to upside- Put Options ‣ downside protection; retains exposure to upside- Zero Cost Collars ‣ downside protection; retain market pricing withincollar, no exposure to upside above collar- Participations ‣ downside protection; some exposure to upside- Physical Forwards ‣ as in Swap but Shortfall exposure□ Who With:- Participants in Refinance Facility Syndicate- US Investment Banks- Trading Houses2005 Analyst Day – Bacton Gas Terminal

Hedging: Recent Hedge Trades□ Gas:- Put Option Oct 2005: Strike 33p/therm, Premium 1p/therm- Swap Nov 2005: Strike ~ 46p/therm- Swap Summer 2007: Strike ~ 44p/therm- Swap Q1 2008: Strike ~ 62p/therm□ Oil:- Put Options - Calendar Year 2006: Strike $50/bbl, Premium $1.50/bbl- Collar - Calendar Year 2006: Put $50/bbl, Call $80/bbl, Nil NetPremium2005 Analyst Day – Bacton Gas Terminal

Hedging: Volumes & PricesH2 200520062007OILVolume hedged (bopd)9,9468,2317,731Current price hedge ($/bbl)36.335.033.0GASVolume hedged (mmcfd)57.145.16.3Current hedged p/therm34.943.959.5□ Commodity mix – significant oil exposure, increase in gas H205□ EA hedges – 4,000 bopd until end 09□ Oil Hedging - Modified profile following disposals- Zero cost collars still very attractive- Development projects limit scope further out□ Gas hedging- Continued strong forward curve- S&K, H&W now available- Capitalising on strong 20062005 Analyst Day – Bacton Gas Terminal

IAS 39: Financial DerivativesKey issues□ No cash impact, other than normal flows associated with hedge settlement□ 3 main categories of financial instruments- EA Barclays hedges: Call $29/bbl, Put $24.5/bbl, 4000 bopd to 2009- LT Gas contracts – Thames, Powergen, Schooner/Ketch- Others: swaps, collars etc□ Treatment as follows- EA Barclays hedge - Negative MTM 1/1/05 £21.0 million, 30/6/05 £81.5 million□ Designated as cashflow hedges□ Ineffective element of £4.0 million to income statement- LT Gas contracts□ All classed as ‘own use’□ No impact under IFRS- Others□ Designated as cashflow hedges□ Ineffective element of £1.6 million to income statement□ Higher volatility of future earnings until longer dated hedges mature2005 Analyst Day – Bacton Gas Terminal

2005 Analyst Day – Bacton Gas TerminalSummary – Alan Linn

SNS Position in Tullow Portfolio□ 30% group commercial reserves and 20% of group contingentreserves□ Schooner and Ketch acquisition reserves confirmed at 330 bcf- Re-development moving ahead at pace- Material “early gains” from production stability□ SNS Gas production of 112mmscfd ytd 40% of group 2005production (with Alba)□ Horne & Wren development completed in June and productionexceeding expectation (110mmscfd gross/ 55 mscfd nett)□ Significant exploration potential in CMS area□ Working to further extend Hewett/Bacton economic life2005 Analyst Day – Bacton Gas Terminal

Summary – Strategy Implementation□ Tullow has built a significant platform for growth in the UK SNS□ Successfully pursuing Tullow’s four “value adding routes”- P&D, Exploration, Acquisitions & Portfolio management□ Continuing to leverage the team’s commercial, technical and operating skills□ Material activities in both SNS core areas in 2005 and beyond□ Opportunities to maximise benefits of favourable gas market□ Pursuing suitable opportunities to build a third core area (Dutch Sector?)The SNS is a key component of Tullow’s future2005 Analyst Day – Bacton Gas Terminal

Tullow Oil plc3 rd floorBuilding 11Chiswick Park566 Chiswick High RoadLondonW4 5YSEmail: ir@tullowoil.comwww.tullowoil.comA leading independent oil and gas exploration and production group2005 Analyst Day – Bacton Gas Terminal