Tullow Oil Interim Results presetnationfiles.investis.com/tullowoil/pdfs/interim06.pdf · Interim Results 2006 2 Disclaimer This presentation contains certain forward-looking statements

Building a Balanced Portfolio of International Exploration and Production Assets

Tullow Oil plc – 2006 Interims Results

2Interim Results 2006

Disclaimer

This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business.

Whilst Tullow believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Group’s control or within the Group’s control where, for example, the Group decides on a change of plan or strategy.

The Group undertakes no obligation to revise any such forward-looking statements to reflect any changes in the Group’s expectations or any change in circumstances, events or the Group’s plans and strategy. Accordingly no reliance may be placed on the figures contained in such forward looking statements.


Presentation Contents

X

54

4

44Appendix 1 – Tullow Overview

42Summary

27Exploration

16Production and Development

6Financials

Introduction

PageSection

Appendix 3 – Africa

49Appendix 2 – NW Europe

Appendix 4 - South Asia 65


2006 Interim ResultsIntroduction

4


Tullow – Focused growth from strong portfolio

□ Record results, strong portfolio and a balanced business

□ Core areas that we understand

□ Long term plans and a long term view

□ Strong Track Record of performance

Financial – maximising value

Operations – discipline and focus

Exploration – core plays and key skills

□ Business Development – generating new opportunities


2006 Interim Results Financials

6


2006 Interim Results

(£126.4m)£207.5 m£81.1 mNet debt3

Up 103%£116.4 m£236.4mCash generated from operations2

Up 100%1.00 p2.00 pDividend per share

Up 50%9.82 p14.72 pBasic earnings per share

Up 51%£63.1 m£95.4 mNet Profit

Up 65%£108.4 m£178.5 mOperating profit before exploration activities

Up 54%£201.4 m£310.7 mSales Revenue

Change1H200511H200630 June 2006

Record revenue, operating profit, cash flow and net profit

1 Includes disposal profits of £34.1m (net of overlift)2 Before working capital movements3 Including all cash balances


1H2006 Revenue up 54% to £311 million

□ Increased revenue from both price and volume rises

− Schooner and Ketch full six months contribution

□ Balanced revenue mix between oil and gas

− 1H2006 Oil 46% Gas 54%

− 1H2005 Oil 67% Gas 33%

□ Working interest production up 10% to 62,800 boepd, sales up 2% to 55,400 boepd

□ Significant price increases

− Average UK gas prices up 85% to 53.3p/therm− Realised oil price up 30% to $54.4/bbl − Average discount to Brent ~ 5%

□ UK tariff income of £8.3m (1H2005: £6.2m)

1H 05 1H 06

Revenue£311m

0

50

100

150

200

250

300

350£m

NW Europe Africa South Asia

Revenue£201m

54.3%

45.5%

41.8%

57.9%0.3%

0.3%


1H2006 Gross Profit up 146% to £187 million

□ Underlying Cash Operating costs of £4.85/bbl, working interest basis (1H2005 - £4.38/bbl)

− Gabon royalty £0.78/bbl

□ Reported Operating Costs affected by overliftedvolumes and stock movement - £4.5m (£0.40/bbl)

□ DD&A charge of £5.66/barrel (1H2005 - £5.82/bbl), benefiting from reserves upgrades

□ Exploration write-off £17.6m (1H2005 £4.0m)

− Gabon, Pakistan, Angola and New Ventures

Outlook

□ 2006 operating costs to remain steady at 1H levels, some benefits in 2007

□ 2006 Group DDA approximately £5.50/bbl

*Gross Profit before admin costs, exploration and disposals

Revenue£311m

0

50

100

150

200

250

300

350£m

Gross Profit* DD&A Cash Operating Profit

Revenue£201m

186,840

64,254

76,009

60,432

19,525

4,500

Overlift

45,468

55,126

1H 05 1H 06


Taxation: effective tax rate of 33%

□ 1H2006 effective tax rate of 33% pre exploration write-off and overlift□ Corporation Tax exposures in UK, Gabon and Equatorial Guinea□ Effective tax rate for period as follows

1UK CT £41.5m, UK PRT £13.3m, Overseas CT £3.3m

□ UK Supplemental tax rate increased to 20% with effect from 1 January 2006− Impact of £12.1m in period

□ Improvement in fiscal regime in overseas jurisdiction− Amendment to corporation and capital allowances tax rates− Effective in respect of 2005 (reversal of £5m)

175.2Taxable Base

57.71 (33%)Tax Charge/(effective rate)

17.6- Exploration Write-Off

4.5- Impact of Overlift on Operating Costs

153.1 Profit Before Tax

£m


IAS39 – Financial Derivatives

□ Total Mark to Market at 30 June of £140.8m, c. 80% associated with EA Hedges

□ IAS39 Financial Derivative Income Statement impact for period as follows:

□ Total ineffectiveness at 30 June £2.4m (31 December 2005 £9.5m)− Cumulative hedge ineffectiveness decreased materially during the period

− Improved correlation of underlying production and realisations to the hedge instruments

£m

1.7Interims results charge (pre-tax)

-6.3Reversal of cumulative ineffectiveness

8.0Change in time value


Commodity price hedge programme

43.99

69.58

46.37

11,717

2H2006

49.4556.63Current hedged p/therm

20.6031.25Volume hedged (mmcfd)

GAS

49.9355.10Current price hedge ($/bbl)

7,5009,500Volume hedged (bopd)

OIL

20082007

□ EA hedges – 4,000 bopd until end 2009 at $29.30

□ Oil hedging – Oil curve exceptionally strong and liquid− Zero cost collars still very attractive (e.g. 2007 – Floor $65/bbl, Cap $90/bbl)

□ Gas hedging− Strong forward curve

− Continue to capitalise on strong 2007 to 2008


Robust cash flow and financial capacity

1H2006 performance metrics□ 1H2006 operating cash flow* up 51% to £236 m

(36.5p/share)

□ Net debt at 30 June 2006 £81.1m (1H2005:£207.5m)

□ Gearing at 30 June 2006 of 17% (13% pre-hedging)

□ Over $450m of unused capacity at 30 June 2006

Outlook□ Ongoing investment programme continue to be funded

from cash flows and currently available facilities

□ Completion of developments will further enhance financial capacity

Cash Inflow Cash Outflow0

50

100

150

200

250

300

£m

Operating cashflow Proceeds on disposals Foreign exchange loss

Capex Payment of bank loans Interest, tax & dividends

152,385

51,338

48,949257,6483,281727

*Before working capital


□ 2006 Capex of £330m largely driven by development programmes in UK, Gabon, Equatorial Guinea

□ Programmes in place to achieve 75,000 boepd by end 2006

□ Cost Inflation and rig/equipment supply had limited impact on 2005/6 Development programmes but is impacting 2006/7 Exploration activities – both cost and timing

Capital Expenditure: well funded programme

South Asia

2005 20060

50

100

150

200

250

300

Development

Exploration

Expenditure£193m

Expenditure£330m

46%

48%6%

350

NW Europe

Africa

2006 Forecast Capex by Core Area£330 million


Financial Outlook

□ Allocating capital to invest in high value assets

□ Exploration and Development programmes producing positive results

□ Reinvestment opportunities continue to be generated

□ Capturing strong oil and gas prices

□ Growing the dividend while growing the business

16Interim Results 2006 16

2006 Interim Results Production and Development


2006 Production□ First Half Actual 62,800 boepd

2006 Performance □ Full Year Forecast 65 to 66,000 boepd

− UK – planned H&W summer shut-in

− Africa – portfolio delivering within target

− Asia – Bangora field onstream

□ Year-end >75,000 boepd

2007 Outlook□ Average 80,000 boepd

Production Summary

2005 1H 06

62,800bopd

0

10

20

30

40

50

60

70

Prod

uctio

n (m

boep

d)

NW Europe Africa South Asia

58,450bopd

28,000

33,800

24,400

33,600

450

1,000


Reserves Summary

Total Reserves - 354 Mmboe

□ Over 40bcf (6.8 mmboe) commercial reserves added to UK portfolio

□ African producing fields & development assets not reviewed at mid-year

Year End Outlook

□ New Licence activity, post mid year, in West Africa is expected to add >20 mmboe of reserves

□ Uganda reserves will be independently assessed, operator currently indicates ~15mmboe net

□ Bangora appraisal ongoing will be assessed at year end

Africa244.7 mmboe

NW Europe90.6 mmboe

South Asia 18.4 mmboe

TOTAL RESERVES – 354 mmboe(all reserves audited by ERC)


UK Gas: Continue to benefit from Infrastructure & Experience

Licence & Infrastructure Portfolio□ 56 offshore blocks

□ Extensive Infrastructure− Bacton gas terminal− 18 offshore platforms− 17 subsea hubs− 660 km pipelines

□ Operating Capability− 40% of infrastructure operated− 70% of production operated

Costs continue to be managed□ Opex being controlled - 9p/therm

Gas prices continue to be strong□ Tullow’s early positioning has enabled

the Group to take advantage of the current gas market

20

40

60

80

100

120

140

160

180

2002 2003 2004 2005 1H 06

pro

duct

ion (

mm

scfd

)

0

10

20

30

40

50

60

Gas

Price

and O

pera

ting C

ost

(p/t

herm

)

Production Actual (mmscfd) Opex Realised Gas Price

0

UK


UK Gas: Continue to Maintain Strong Opportunity Set

Production and Development□ 12 producing fields

− Schooner & Ketch redevelopment− Infill drilling

□ 3 near term developments − CMS Area - Kelvin, K4− Thames Area - Thurne

□ Discoveries under review − CMS Area - Humphrey, Opal, Topaz,

Arrol, Cygnus− Thames Area – Wissey, Bure, Blythe, Fizzy

Exploration□ Strong prospect inventory

− 250 bcf risked− Application for further 6 licences

0

200

400

600

800

2P Commercial

Developed

2P Commercial

Undeveloped

2P Contingent 3P

Rese

rves

(BCF)

764 BCF

330

177

221

100

300

500

700

36

UK


Africa: Strong Activity throughout P&D portfolio

□ Gabon− Continue to maintain stable production

− Ongoing activity in Niungo and Etame Area

□ Congo (Brazzaville)− M’Boundi infield drilling continues−Water injection start-up 4Q 06

□ Equatorial Guinea− Ceiba infill drilling confirmed for 2007

− Okume on track for Dec 06 start-up

□ Côte d’Ivoire− East Espoir infill drilling continues to deliver−West Espoir first oil

□ Namibia− Commercial discussions ongoing

− Appraisal drilling on schedule Africa


Africa: Continue to Build Upon Significant Upside

Production and Development□ Nine producing fields

− M’Boundi recovery factor upside− Gabon infill & appraisal drilling− Ceiba continued infill programme

□ Three near term developments − West Espoir additional drilling− Okume multi year drilling programme− Avouma & Ebouri

□ Potential Developments− Kudu gas to power− Gabon Azobe discoveries− New Angola and Ghana licences− Espoir near field potential

Exploration□ Strong exploration licence and prospect

inventory

100

400

0

200

300

500

Rese

rves

(m

mboe

)

2P Commercial

Developed

2P Commercial

Undeveloped

2P Contingent

3P

474 mmboe

209

NewLicences

74

134

20

Africa

37


South Asia: Production growth being delivered

Bangladesh□ Block 9 Appraisal programme

− 3D seismic interpretation ongoing

− Bangora first gas May 06

− Bangora 2 & 3 successful

□ Full Field Development − Reserve potential being assessed

− Conceptual studies ongoing

Pakistan□ Chachar Development

− Drilling phase complete

− Facilities construction underway

− First Gas Q1 2007

South Asia


Developments and Opportunities

DevelopmentsSanctionDecision

FirstProduction

No ofWells Status

Thurne 1Q 08 1 Long lead committed, design ongoing

Wissey 2006 2008 1 Pending sanction

Bure 2006 2008 1 Pending sanction

Kelvin (K3) 2006 4Q 07 1 Long lead committed, design ongoing

K4 2 Pending sanction

Thames/Hewett Area

CMS Area

Conceptual developments under review include:- Blythe, Fizzy

Conceptual developments under review include:- Murdoch SE, Humphrey, Opal, Arrol, Topaz, Cygnus

UK

- -

Pakistan Chachar 1Q 07 3 Drilling complete, facilities constr. underway

Suri Compression 2Q07 - Detailed design underway

Bangladesh Bangora LTT May-06 1 to 2 Bangora -1 prod., Bangora-2 tie in 4Q 06

Bangora Phase 2 2007 2008/09 - Appr. drilling & dev. planning underway


FirstProduction

No ofWells StatusAsia

UK

Asia


Developments and Opportunities


FirstProduction

No ofWells Status

Africa

Angola Pit-Ban Discoveries 2007/08 2009 Appraisal wells late 2007/early 2008

Congo M'Boundi Water Inj. 4Q 06 Design complete, drilling 60% complete, install. underway

East Espoir Infill Jun-05 4 CompletedCôte d'IvoireWest Espoir Jul-06 8 to 11 Facilities installation is complete, drilling underway.

Ceiba North Area Sep-06 6 Subsea upgrades complete - 3 of 6 wells completed

Equatorial Guinea

Ceiba 07/08 Infill Proj. mid 07 6 to 7 Planning underway, rig contracted

Okume Dec-06 >45 Install. to be completed Oct 06, drilling initiated Aug 06.

Ghana

Kudu Gas to Power 2007/08 2010/11 4 Tech. studies complete, commercial disc. ongoingNamibia

Kudu Phase 2 2008/09 2012 4 to 6 Concept studies underway, appr. drilling 2007

Gabon

Echira appraisal under review for 2007 drilling.

Tano Shallow discoveries under review with appraisal expected 2007/08

Okume Abang satellite pending completion of the main Okume development

Conceptual developments under review include:- Acajou, Espoir level 0

-

-

Avouma 4Q 06 2 Facilities installation ongoing, drilling Oct 06

Ebouri 2008 1 Development is awaiting government approval.

Niungo Infill 2007 8+ First well spudded in Sept 06

Azobe (Assala) 2007 2009 1 to 2 Appraisal well 2007

Africa


Continue to grow Production and Development portfolio

□ Excellent delivery founded on robust portfolio

□ Significant inventory of development opportunities

□ Strong team and effective organisation

□ Integrated P&D, New Ventures and Exploration growth strategy


2006 Interim ResultsExploration

27


Exploration direction – Core Strengths

Building on successes established in Core Regions by leveraging

□ Core Capabilities

− Profitably leverage local knowledge & develop globally

□ Core Plays

− Excel in salt basins, stratigraphic traps, rift basins & fold belts

Assam ArakanSouthern North SeaGulf of GuineaAtlantic NW Africa

Indus BasinCambay BasinSouthern North SeaLower Congo Basin

Kohat PotwarAlbertine BasinOrange BasinSouthern North Sea

Fold BeltsRift BasinsStrat TrapsSalt Basins


Core Plays: Current Exploration

Fold Belts

Rift Basins

Salt Basins

Strat TrapsCO

RE

PLA

YS

East African Rift

Southern North Sea

Central North Sea

South Viking Graben

Potwar Basin

Indus Basin

Gulf of Kutch

Orange BasinKwanza Basin

Lower Congo Basin

Rio Muni Basin

Rio del Rey Basin

Côte d’Ivoire – Tano Basin

Senegal – Mauritania Basin

Morondava Basin

Cambay Basin

Bengal Basin

Assam Arakan


2006 Activity Overview

NW Europe□ 3 gas wells drilled, all discoveries (Humphrey, Cygnus, K4)

□ 2 oil wells planned (Acer, Peveril)

□ 6 blocks applied for in 24th Licensing Round

Africa□ 7 Blocks gained

−Ghana (3), Angola (1), Congo (DRC) (2), Madagascar (1)

□ Uganda frontier success−Mputa-1 & 2 and Waraga-1 Discoveries & Production Tests

□ Dry holes in Gabon and Equatorial Guinea

South Asia□ India CB-ON/1 2D seismic reveals several leads for drilling 2Q 2007

□ Pakistan Kohat seismic defines material prospect to drill 2H 2007


Leading position with 50% of the Albertine Rift Basin

Basin-wide Knowledge

Partner in all licences

Staffed up to leverage new data

Basin-wide Influence

Long-term relationships in Africa

Facilitating operations

Basin-wide Strategy

Leverage knowledge & influence

Quickly discover basin potential

Appraise in parallel

Scaled development options


Albertine Rift Basin – Physical setting

Albert Nile

Victoria Nile

Lake Albert


Albertine Rift Basin – Basin-wide full-cycle campaign

Kaiso-Tonya Area

Appraisal of discoveries

Mputa & Waraga well testing

Kaiso-Tonya 3D seismic planning

Mputa appraisal wells 2007

Further exploration drilling

Nzizi (Nov-Dec 2006)

Ngambwa (using 3D seismic)

Development concepts

Studies launched

Regional & basin-wide / modular



Butiaba-Paara Area

Exploration surveys

Gravity & magnetic surveys 06

2D seismic planning

Exploration wells

Preparing drill-worthy prospects

Rig options study



Lake Albert

Exploration surveys

2D seismic planning in Congo (DRC) Blocks I & II

Metocean & EIA studies

Exploration drilling

Bugoma (Kingfisher & Pelican)

Lake operations (Ngassa plans)


Albertine Rift Basin Schedule

Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008

Uganda PaaraBlock 1 Exploration

Uganda ButiabaBlock 2 Exploration

Uganda Kaiso-TonyaBlock 2 Exploration

And Appr.

UgandaLake AlbertBlock 2

Congo (DRC)1&2 Ituri N & S

Block 3 Bugoma

Uganda EarlyBlock 2 Production

Paara 2D (Acquire-Process-Interpret)

Paara Prospects Drilling

Rig options study - tender - rig up

Butiaba 2D (Acquire-Process-Interpret)

Butiaba Prospects Drilling

Nzizi-1

Nzizi-2 Kaiso-Tonya Prospects Drilling

Test M-1 M-3 + M-4

Kaiso-Tonya 3D (Acquire-Process-Interpret)

Metocean & EIA

Ngassa 2D evaluation Optional Ngassa 3D Lake Prospects Drilling

DRC-1&2 2D (Acquire-Process-Interpret)

Kingfisher-1 Pelican-1 Kingfisher-2 & Pelican-2

Kingfisher 3D (Acquire-Process-Interpret)

Concept Studies

Optional Front End Engineering - Design - Construction

Country Development

Seismic Drilling Study Contingent Testing


Ghana: Upside potential and proven oil

3 licences gained offshore Ghana□ Deepwater Tano - 49.95% (op)

□ West Cape Three Points - 22.9%

□ Shallow Water Tano - 85.5% (op)

Deep Water□ Significant exploration upside potential

□ Diverse prospect configurations

Shallow Water Tano□ Three undeveloped oil and gas fields

□ Evaluating potential to commercialise


Kudu Stratigraphic Traps

Gas field extension/exploration upside

Proprietary geological insights

Fully integrated geosciences data

2 gas plays proven

Prospect testing: 2 wells (Q1-Q2 2007)

Kudu East: potential multi-tcf play


Cambay Rift Basin – Identifying targets in prospective trend

Seismic programme increased to 1,500 km

1,287 km acquired and processing ongoing

Expected completion in September

Initial prospect evaluation by November 2006

First Well to Spud June 2007


Mputa

Akoum West

Humphrey

Cygnus

Waraga

Shahpur Chakar

Soulandaka

Dogbolter

Banyan

K-4

Mputa-2

Kingfisher

Acer

Level Zero

Peveril

Nzizi

2 Oil Prospects

2 Kudu East wells

Campaign

Campaign

Oil Prospect

Campaign

DATE/STATUS

2006: Active Exploration Programme

COUNTRY PROSPECT INTERESTLICENCE

50%

100%

35%

35%

50%

30%

25%

23.5%

10%

22.5%

50%

50%

6.25%

21.33%

30%

50%

40%

90%

50%

50%

40%

23-100%

Oil Discovery

Dry Hole

Gas Discovery

Gas Discovery

Oil Discovery

Dry Hole

Dry Hole

Dry Hole

Dry Hole

Gas Discovery

Oil Discovery

Drilling

October 2006

October 2006

November 2006

November 2006

Q1 2007

Q1 2007

Q2 2007

Q2 2007

Q2 2007

Q2 2007

Block 2

Akoum

44/16-3

44/12-2

Block 2

Nawabshah

Akoum

Gryphon

Block L

44/23b

Block 2

Block 3A

16/13c

CI-26

Quad 39

Block 2

Nziembou

Kudu

CB-ON/1

Block 2

Ngosso

SNS

Uganda

Gabon

U.K.

U.K.

Uganda

Pakistan

Gabon

Gabon

Eq. Guinea

U.K.

Uganda

Uganda

U.K.

Côte d’Ivoire

U.K.

Uganda

Gabon

Namibia

India

Uganda

Cameroon

UK


Exploration conclusions

□ Excellent delivery founded on robust portfolio

□ Balanced inventory of Exploration opportunities

□ Experienced team and extensive knowledge base

□ Focused Exploration strategy based on core plays


2006 Interim Results Conclusions


Conclusions

□ A strong outlook for 2006

□ Solid business foundations for long term growth

□ Financial strength enables flexibility

□ Current environment provides significant opportunities

Overall….Executing our strategy and delivering growth


2006 Interim ResultsAppendix 1 – Tullow Overview


EHS & CSR: Continual improvement

Environment, Health & Safety� ISO14001 certification rollout

ongoing

� Continue to improve safety performance

� New London Crisis Management Facility

Corporate Social Responsibility� First CSR Report published

� Aligned approach to CSR commitments

2005 and 2006 LTI Performance

0

0.5

1

1.5

2

2.5

3

Jan'05

Mar May Jul Sep Nov Jan'06

Mar May

LTI

LTIFR 12 mnth avg

LTI = Lost Time Incident / LTIFR = Lost Time Incident Frequency Rate


NW Europe – 50% Production

□ Gas focus

□ Mature Basin Operator

□ Extending core plays in wider North Sea

Africa – 50% Production

□ Pan-African Focus

□ Developing regional positions

□ Consistent organic growth

Asia

□ Rapidly growing Energy demand

□ Still under explored

□ Knowledge and acreage position

to fuel growth

The Tullow footprint


Tullow Growth Strategy

• Improving asset performance and extending field lives• Independent technical view on non-operated assets

• A balance of near-infrastructure and high impact exploration• Building on knowledge - expansion based on core plays and skills

• Rigorous opportunity identification, execution and integration• Ongoing programme of bolt-on acquisitions

• Focus on assets where we have influence• Maximise value of each region

PRODUCTIONand

DEVELOPMENT

EXPLORATION

ACQUISITIONS

PORTFOLIOMANAGEMENT


Evolution of the Tullow Business

Company-transforming acquisitions

□ Southern North Sea Assets – 2001

□ Energy Africa – May 2004

□ Schooner and Ketch – March 2005

Organic growth

□ UK – Schooner and Ketch, Thurne and Kelvin developments

□ West Africa – West Espoir, M’Boundi & Okume developments

□ Asia – Chachar and Bangoradevelopments

Group Turnover

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005

£m

illio

n

500

600

700

2006*

* Brokers Forecast


2006 Interim Results Appendix 2 – NW Europe


SNS Business Background

Continued growth of non-majors

□ Mature basin - assets not material for the Majors and not attracting investment

□ Various asset sales packages (including cash in of some venture capital)

□ Success of the 24th Licensing Rounds

□ Stewardship drive continues to maximise recovery

□ Access to rigs, services etc remains challenging

Gas Supply

□ Security of supply highlighted

□ New import projects factored into forward curve

□ UK fiscal terms SCT increased to 20%

SOUTHERN NORTH SEA


Thames/Hewett Area: continue to consolidate position

Thames Area

□ Tullow acting as subsurface and development operator

□ Thames contract negotiated to allow blowdown

□ H&W virtual storage to access value of winter prices

□ Thurne development progressing well

□ Further developments under review

□ Additional tariff income - Arthur phase 2

Hewett Fields

□ Equity further increased to 51.69%

□ Delilah sidetrack on stream Mar 06

□ 30% reduction in operating cost since 2004

□ Demanning project under way- Phase 1 complete

Bacton Terminal

□ Further major cost reduction project initiated

□ Continue to deliver excellent uptime to third parties

□ Strong Safety Performance

0

50

100

150

200

250

300Thames Facilities Throughput

2000 2001 2002 2003 2004 2005 2006*

Th

rou

gh

pu

t (m

msc

fd)

* Forecast peak throughput


CMS Area: a region of significant further prospectivity

Exploration

□ Major exploration success with K4 well

□ Cygnus appraisal well under review

□ At least two further exploration wells in 2007

Developments

□ Kelvin (K3) project close to sanction

□ Potential developments of Rita, Opal & Topaz all under discussion with partners

□ Cavendish 3rd party field to be tied in early 2007

Producing Fields

□ Production growth of 3% over last year

□ Further infill wells on Boulton and Murdoch being considered

Outlook

□ Continue applying our subsurface Carboniferous expertise to exploit prospectivity of the area

□ Maximise utilisation and value of infrastructure


Schooner & Ketch: significant production growth in 2006

Team□ Experienced subsurface, drilling and

operations team in place

Production & uptime□ Production potential maintained c.65 mmscfd □ Facility uptime now steady around 98%

Redevelopment□ Ensco 101 contracted through 2007□ SA-10 on stream, KA-7 being completed□ Simultaneous well intervention work

programme in progress using coiled tubing□ Further four wells planned

Exploration/Appraisal□ Schooner NW - drilling in reservoir. If

successful, tie-in by late 2007□ 6 blocks applied for in 24th Round


2006 Interim Results Appendix 3 - Africa

54


Africa: developing a truly pan-African business

A continent with many opportunities□ Mature basins where majors are exiting

□ Significant areas currently unlicensed

□ A number of largely-unexplored frontier basins

Strong Knowledge Base□ Over 20 years of experience in Africa

□ Detailed understanding of African petroleum basins

□ Good access to a range of opportunities

Extensive Portfolio□ Interests in 13 countries, 38 licences and 9 producing fields

□ Current production of over 34,000 boepd

□ Interests in large development projects

□ Continually evaluating new venture opportunities


Gabon: targeting growth in production and operating capability

Niungo Area□ Rig arrived Sept 06□ Up to 8 development/appraisal wells

□ Two exploration wells planned

Etame Area□ Avouma first oil Q4 2006□ Ebouri project pending Government approval

Tchatamba Field□ Production sustained at higher than

anticipated levels□ Well optimisation programme under way

Azobe□ Secured operatorship, increased equity (60%)□ Assala appraisal/development under review


Congo: focus moving from delineation to recovery factor

M’Boundi Field STOIIP & Reserves

□ Field delineation complete

□ Current range 1.0 to 1.3 billion bbl

□ Recovery factor 21%

2006 Activity

□ Over 60,000 bopd in 1Q 06 (average 55,000 bopd in 2006)

□ Water injection drilling complete facilities startup 4Q 06 (3 injection wells, capacity 30,000bpd)

□ Upgrades to facilities ongoing

□ 60 wells drilled and continuous drilling planned

Oil Export

□ Oil now sold as N’Kossa Blend

□ Significant reduction in discount to Brent


Equatorial Guinea: production growth through 2006 and 2007

Ceiba Field□ Rig secured to continue infill drilling

throughout 2007

□ Field production being maintained around 40,000bopd

Okume Development□ Remains within budget

□ All six platforms installed

□ Topsides installation and tie-in phase in Oct 06

□ Two rigs now active with >40 wells planned

□ First oil on schedule for December

□ Significant operating cost synergies with Ceiba Field


Côte d’Ivoire: production growth and unit cost reduction

East Espoir□ Infill drilling programme completed

□ Well performance continues to be strong

□ Assessing reservoir performance

West Espoir

□ Facilities installed within budget

□ First Oil on schedule – July 2006

□ Up to 11 wells planned

CI-107 and CI-108

□ 2D seismic survey complete

□ 3D seismic scheduled for Q3 2006

□ Exploration likely in 2008


Kudu: an important year for commercial progress

Kudu Opportunity

□ Tullow operated asset

□ 90% working interest

□ Reserves potential up to 9tcf

Phase 1

□ Gas to power (800MW)

□ FEED study completed

□ GSA and PPA negotiations under way

□ First gas ~2010

Phase 2

□ Two well appraisal programme

□ Rig secured 1Q 2007

□ Ongoing concept studies (Gas to Power, Modular LNG, gas export)


Mauritania/Senegal: encouraging results from gas discovery

Mauritania Block 1 (20%)□ Faucon gas discovery in November 2005

proves up a regional working hydrocarbon system

Mauritania Block 2 (20%)□ New well results being integrated into

geological model

□ Exploration well in 2007

Senegal (60%)□ St Louis – several leads identified

□ Mauritania Block 1 discovery reduces risk for the region


Angola: continuing to build our position

Block 1/06□ Awarded in August 2006□ Tullow operated

− 3,800 square kilometres

□ Three undeveloped discoveries− Pitangueira− Bananeira− Sapesapeiro

□ Evaluate commerciality with 2 wells in late 2007

□ Work programme includes 600 square kilometres of 3D seismic

□ A third exploration well planned to investigate prospective intervals

Blocks 10/05 and 24/99□ 15% interest in Blocks 10 and 24 c□ Covered by good quality 3D seismic□ Largely unexplored region


Madagascar: a proven prospective region for oil

Overview□ Block 3109 – Tullow 50%

□ 11,050 sq km block in the Karoo Rift

□ Potential high impact (100 mmbbl+) oil prospects

Work Programme□ Tullow operated

□ Initial work programme - 30 months

□ Gravity survey, aeromagnetic and seismic complete

□ Potential drilling in 2009


Cameroon: current 3D seismic, potential drilling in 2007

Overview□ 40% interest in the offshore Ngosso Block

□ Three existing oil discoveries plus gas potential

Work Programme□ 2006 3D seismic programme focused on

development opportunities

□ Drilling planned for Q2 2007


2006 Interim Results Appendix 4 – South Asia


South Asia: reinvesting for growth

A growth region for Tullow□ Region of growing energy demand□ Major high-impact exploration potential□ Relatively low-cost exploration/operations□ Limited competition for assets

Developments to fund exploration□ 15 Exploration and development licences □ Development projects in Pakistan and Bangladesh

□ Exciting exploration acreage in Pakistan, India and Bangladesh

Future growth

□ Focused on organic growth

□ Extensive technical and geological knowledge of South Asia

□ Continue to assemble an attractive high-impact portfolio


Pakistan: significant high impact exploration potential

Production & Development□ Sara-Suri gas field

− Compression project sanctioned

□ Chachar gas field− Drilling completed

− Facilities construction under way

− First gas – Q1 2007

Exploration□ Nawabshah dry hole

□ Kohat Block− Seismic in progress

− Well planned 3Q 07


Bangladesh: considerable potential upside in Bangora

Bangora-1 Production□ First gas April 2006

□ Gas sales of 35 to 50mmscfd

Bangora/Lalmai Appraisal□ Appraisal programme approved

□ 620 sq km 3D seismic acquired

□ Up to 4 appraisal wells planned

□ GIIP potential of up to 1 tcf

Block 17/18□ Total farmout completed

□ 2D seismic under way

□ Extensive 3D seismic planned late 2006


Tullow Oil plc3rd floorBuilding 11Chiswick Park566 Chiswick High RoadLondonW4 5YSEmail: [email protected]

A leading independent oil and gas exploration and production group

www.tullowoil.com

Documents

Tullow Oil Interim Results presetnationfiles.investis.com/tullowoil/pdfs/interim06.pdf · Interim Results 2006 2 Disclaimer This presentation contains certain forward-looking statements