2005 Analyst Day UK Business Unit

Building a balanced portfolio of Exploration and Production Assets Introduction – Paul McDade

2005 Analyst Day – Bacton Gas Terminal The Tullow footprint

NW Europe □Leading Gas Producer □Mature basin Operator □Growth through exploration, development and acquisition

Africa □Pan-African E&P business □High impact exploration □Growth through exploration, development and acquisition

Asia □Materiality through organic growth □High impact exploration □Growth through exploration and development

2005 Analyst Day – Bacton Gas Terminal Tullow Growth Strategy

Exploitation and expansion of Tullow’s current reserve base

PRODUCTION & 1H Reserve Replacement 97% before acquisitions

DEVELOPMENT Ongoing development progress in Africa, UK and Asia

2005/6: Organic growth to over 70,000 boepd by end 2006

Broad portfolio with proven skills, knowledge and database

H1 – Two successes from 3 wells in SNS, 1 success in Gabon on Niungo EXPLORATION Next – High impact programme due to start including Mauritania and Uganda.

2006 onwards - continuing to build a high impact portfolio

Selective acquisitions within core areas

2001: £200 million of Southern North Sea assets acquired from BP ACQUISITIONS 2004: $570 million acquisition of Energy Africa

2005: £200 million acquisition of Schooner and Ketch in the S. North Sea

Active Portfolio Management

PORTFOLIO Focus on assets where we can add value and upside potential exists

MANAGEMENT Build positions where we have a material influence

2005: Sale of UK oil and Congo (Brazzaville) offshore assets for total of $184 million

2005 Analyst Day – Bacton Gas Terminal Southern North Sea – Focussed Approach

2001 acquisition of infrastructure, fields & acreage delivered two focus areas: CMS Area □ CMS Area - Non-operated position - Established operator with no exit plan - Significant development and exploration upside - Infrastructure operating close to capacity

□ Thames/Hewett/Bacton Corridor - Non-operated with minor operated position Hewett/Thames Area - No dominant operator - Significant development upside - Limited exploration potential - Infrastructure operating at ~30% of capacity - Unit operating costs becoming a key issue

2005 Analyst Day – Bacton Gas Terminal SNS Introduction – Alan Linn

□ Management Team

□ Business Framework

□ Safety and Responsibility

□ Business and Edge

□ Agenda

2005 Analyst Day – Bacton Gas Terminal UK Business Unit – Organising for Growth

BusinessBusiness UnitUnit ManagerManager –– UK UK AlanAlan LinnLinn

Technical/TeamTechnical/Team AssistantAssistant CathyCathy EdgingtonEdgington

RegionalRegional AssetAsset MgrMgr CommercialCommercial MgrMgr UKUK DevelopmentDevelopment Alan Marshall UKUK FinanceFinance UKUK DrillingDrilling ExplorationExploration AssetAsset ManagerManager Alan Marshall MikeMike SimpsonSimpson && EngineeringEngineering OperatedOperated AssetsAssets ManagerManager ManagerManager AssetsAssets SchoonerSchooner && KetchKetch JV Assets & Bus ManagerManager Bacton/HewettBacton/Hewett Rob White JV Assets & Bus Charlie Taylor Chris Flavell Peter Evans Rob White Mark Allen Charlie Taylor Chris Flavell Peter Evans Orwell/HorneOrwell/Horne && WrenWren DevelopmentDevelopment Mark Allen

BUSINESSBUSINESS UNITUNIT SUPPORTSUPPORT FUNCTIONSFUNCTIONS

ContractsContracts && Data/ITData/IT DrillingDrilling GeoscientistsGeoscientists CommercialCommercial EH&SEH&S FinanceFinance LegalLegal EngineeringEngineering BusBus DevDev ProcurementProcurement TechnologyTechnology

2005 Analyst Day – Bacton Gas Terminal Tullow Integrated Management System (IMS)

□ Tullow Corporate IMS sets 18 standards and guidelines to Tullow support operations IMS Framework □ Assets meet defined standards through local compliance Tullow documents. Corporate Guidelines

□ Internal and External audits for compliance provide assurance at Local Compliance Document corporate level.

Operational/Local Procedures

2005 Analyst Day – Bacton Gas Terminal Environment , Health and Safety (EH&S)

□ Our EH&S policy sets the standard for performance

□ Add value by investing & empowering our people 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 Environmental Management System to ISO14001 in UK

- Relationship building through UKOOA and other industry forums

- Building strong working relationships with Partners and Contractors

2005 Analyst Day – Bacton Gas Terminal Corporate Social Responsibility (CSR)

□ Proactive commitment to conduct our business with high standards of integrity.

□ Corporate CSR report in 2006 to publicly report our 2005 performance.

□ Provide support for Tullow personnel and external sponsorship for projects which benefit local communities

Bacton : Environmental Liaison Committee – forum where Local Council Members, Police and Environmental Agency can participate and actively consult on terminal activity.

2005 Analyst Day – Bacton Gas Terminal SNS Business Background

DTI – 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 recovery

HSE - 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, ChevronTexaco

2005 Analyst Day – Bacton Gas Terminal SNS – Gas Pricing Background

Gas Supply □ Transition from self-sufficiency to importation □ Increasing importance of indigenous gas

Forward Curve Comparison 80 Arco Schooner / Ketch 30/09/2005

40 p/therm 30

0 Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08

2005 Analyst Day – Bacton Gas Terminal Southern North Sea – Focussed Approach

2005 Analyst Day – Bacton Gas Terminal SNS Business Edge

Tullow Oil is a full-cycle E&P Business

Risk/EquityRisk/Equity ProfileProfile FastFast TrackTrack DevelopmentsDevelopments FieldField LifeLife ExtensionExtension

Explore Appraise Develop Produce Abandon

Infra-StructureInfra-Structure LeverageLeverage LowLow CostCost OperationOperation

PortfolioPortfolio ManagementManagement AlternateAlternate UseUse

Divest Acquire

2005 Analyst Day – Bacton Gas Terminal SNS Position in Tullow Portfolio

□ 30% group commercial reserves and 20% of group contingent reserves

□ 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 2005 production (with Alba)

□ Horne & Wren development completed in June and production exceeding expectation (110mmscfd gross/ 55 mscfd nett)

□ Significant exploration potential in CMS area

□ Working to further extend Hewett/Bacton economic life

2005 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 future

2005 Analyst Day – Bacton Gas Terminal Agenda

Thames/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&A

2005 Analyst Day – Bacton Gas Terminal Thames/Hewett Area – Alan Marshall

2005 Analyst Day – Bacton Gas Terminal Thames/Hewett Corridor 2005

□ Thames-Hewett-Bacton infrastructure position purchased from BP – 2000/01

□ Series of Bolt-On Acquisitions and operatorships added

□ Development, operatorships, and third party opportunities continue to be pursued

Laps/Bacton Pipeline

Thames/Bacton Pipeline

Tullow Licensed Hewett/Bacton Pipeline non-operated acreage Tullow Open operated acreage

21 0 Kilometres 10

2005 Analyst Day – Bacton Gas Terminal Hewett/Bacton Case Study

Hewett/Bacton □ Hewett Complex feeding into the Bacton terminal □ Terminal processes gas from the Hewett, Thames and LAPS complexes Tullow Progress □ 2000 – 20% non operated stake acquired from BP □ 2003 – Additional 19% acquired from ConocoPhillips □ 2003 - Operatorship transferred to Tullow - strategic importance - Establish Operator capabilities and credentials - Build foundations for other operated activities - Controlling influence in Hewett field direction - Influence on Thames infrastructure through Bacton initiatives □ 2004 – Delivered 25% cost reduction target Hewett Growth Opportunities □ Focus on extending field life - Continued pursuit of cost reductions - Maximise in-field reserves recovery - Marginal field developments □ Gas storage opportunity

2005 Analyst Day – Bacton Gas Terminal Hewett Field Cost Challenge

Complex Infrastructure □ 3 platform central facility □ 3 normally unmanned installations □ 9 subsea wells

Cost challenge □ 2004 – 25% cost reduction achieved

2005 Analyst Day – Bacton Gas Terminal Hewett-Bacton Management Responsibilities

TullowTullow OilOil PetrofacPetrofac

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

2005 Analyst Day – Bacton Gas Terminal Hewett Field Cost Challenge

Complex Infrastructure □ 3 platform central facility □ 3 normally unmanned installations □ 9 subsea wells

Cost challenge □ 2004 – 25% cost reduction achieved □ 2005-2006 offshore - Simplification - Reliability improvements - De-manning □ Operational model applicable in other assets □ Bacton cost challenge

2005 Analyst Day – Bacton Gas Terminal Hewett Area Opportunities

17 18d 17 18c 010Kilometres

16b 18b 19b 19e 19d 20b 16 21b 22b 23b 24b 25a 25b 21 Tullow non-operated Tullow operated Licensed acreage Open acreage Blythe 24a 22a F2 23a Delilah work over 22 □ Delilah workover / 23c and sidetrack sidetrack 1Q 2006 Ongoing 26 27 development28a 29 30 26 27 Dawn evaluation Deborah □ Zechstein velocity string campaign Delilah

28b B10 Big Dotty □ Late life reserves Della Leman recovery – low Hewett pressure operation Little Dotty 48 49 1 2 3b F1 52 53 Production efficiency 4a □ 4b – compression 5a 1a optimisation Zechsteinkalk5b 1b F2 opportunities □ Third Party Business England –Blythe, sour gas Bacton

2005 Analyst Day – Bacton Gas Terminal Hewett– Extending Field Life

Economic cut-off date when Tullow assumed operatorship 45

40 Delilah workover Zechstein Velocity Strings 35 2005 Forecast

30 Post OCC2 Min Econ Rate

15 Production Rate mmscfd 10

0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

2005 Analyst Day – Bacton Gas Terminal Thames Facilities Case Study

Thames Facilities Throughput Thames Facilites 300 □ Central processing hub for five field groups, pipeline to Tullow’s Bacton terminal □ Operated by ExxonMobil, supported by Tullow 250 subsurface and commercial expertise

Timeline 200 □ 2000 – various interests acquired from BP □ 2003 – Agip’s interest in Thames acquired □ 2004 – ChevTex interest in Orwell acquired 150 □ Jan 2005 – First gas from Arthur field

□ June 2005 – First gas from Horne and Wren Throughput (mmscfd) 100 □ July 2005 – 2nd Arthur dev well on line Forward Plan 50 □ Maintain facilities at capacity - Progress marginal developments - Attract further third party gas 0 2000 2001 2002 2003 2004 2005 2006

2005 Analyst Day – Bacton Gas Terminal Horne and Wren Case Study

Horne and Wren Development □ Marginal fields development with 2 wells and a minimum facilities not normally manned installation □ Tullow’s first UK operated development –delivered on time and within budget

Timeline □ 2000 – 8% acquired from BP □ 2003 – Additional 38% acquired from BP □ 2004 – Remaining 54% and operatorship acquired from Shell and 50% sold to Centrica. □ Mid 2004 – Project sanction □ 2005 – First gas flowed in June

Forward Plan □ Maximise reserves recovery over 3-4 year field life. □ Seek re-use opportunities for platform facilities

2005 Analyst Day – Bacton Gas Terminal Thames Fields

EQUITY : Tullow 66.66% ExxonMobil (op) 23.33% Thames NW Latimer Centrica 10.0% Bure Q Producing Fields: Chalfont □ BGT Contract Thames, Bure, Bure West, Yare, Wensum Thames - Deben - Considering benefits of accelerated production through blowdown profile Wensum Thurne First gas 1986 Amersham □ Production to 30/6/2005 401.5 Bscf (plus 16.4 Yare Bscf from Deben) Leman

Tullow proposed Infill Opportunities: S Updip □ Thurne (49/28-14 “L” discovery) Bushey □ Bure East

□ Bure North Chesham

2005 Analyst Day – Bacton Gas Terminal Thames Area Third Party Potential

Tullow Licensed non-operated acreage Tullow Open □ Potential developments have been operated acreage identified and are under review 21 0 Kilometres 10 using Thames Infrastructure as an evacuation option.

□ These are: –Tristan –Wissey –Fizzy –Camelot –Dutch sector

□ Further exploration potential also exists

2005 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 studied

2005 Analyst Day – Bacton Gas Terminal CMS Area – Mike Simpson

2005 Analyst Day – Bacton Gas Terminal CMS area – Focus on growth

Tullow’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 Operator

Success 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 confirmed

Still to do… □ Redevelopment of Schooner & Ketch □ Accelerate pace of exploration and development □ Expand and further align interests

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area - 2001

6 7 8 10 11 12 13a 0 9 Kilometres 10 14 15 □ BP asset acquisition -Infrastructure and assets 44 purchased from BP 2000/01 16 17a 18

□ All assets non-operated 43 □ Significant potential

25a Murdoch -Field development (CMS 21a 22a III DTI approval) Boulton -Exploration upside 22b -Third party gas -Bolt-on acquisitions

48 49

Tullow non-operated Licensed acreage Tullow operated Open acreage

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area – 2002/3

6 7 8 11 12 13a 0 9 Kilometres 1010 11 12 14 15 □ Development - CMS III -Five unitised fields 44 -Subsea development

16 17a 18 Hawksley -Export via CMS facilities 16 -First gas Aug ’02

18b 43 19b McAdam □ Exploration 23b 25a Murdoch -Portfolio enhanced through 21a 22a the 20th and 21st Licensing Boulton B1 Watt rounds Boulton H 22b □ Commercial - Murdoch/Boulton depletion contracts terminated

48 49

Tullow non-operated Licensed acreage Tullow operated Open acreage

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area – 2004/5

6 7 8 11 12 13a 0 9 Kilometres 1010 11 12 14 15 □ Development - Munro -Discovered Feb 04 44 -First gas Oct 05

16 17a 18 Hawksley 16 Munro □ Schooner & Ketch

17b 18b 43 19b -Completed end March 05 McAdam -Uptime improved

23b 23b -Redevelopment planning 25a Murdoch 21a 22a underway Boulton 22b 23a B1 21c Watt Caister Boulton H 22b □ Exploration 27b 28 29 30b 28a 26b - Operated success in 22nd Schooner Garnet Licensing Round Ketch - 3 wells in 2005 26a 27a 28b 05 1b 3(N) 49/03-3 Topaz 2a 48 2b Marjan 49

Tullow non-operated Licensed acreage Tullow operated Open acreage

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area - 2005 +

6 7 8 11 12 13a 0 9 Kilometres 1010 11 12 14 15 □ Development

Numerous development Cygnus Complex - 44 opportunities

16 17a 18 -Coordinated/integrated 16 Hawksley programme – CMS IV?

Humphrey 17b Munro18b Harrison 43 19b -Reservoir infill opportunities McAdam K3 23b 23b Cameron □ Schooner & Ketch 25a Murdoch Opal 21a 22a K4 -Drilling campaign to deliver 22b 23a B1 Watt Boulton21c significant production and

22b Caister reserve upside Boulton H 27b 28 29 30b 28a 26b Schooner Arroll Garnet □ Exploration Brunel Ketch New prospectivity identified 26a 27a 28b 05 1b 3(N) 49/03 3 Topaz Up to 4 expl wells planned for 2a 2006 Yawl 48 2b Marjan 49

Tullow non-operated Licensed acreage Prospects & Leads Tullow operated Open acreage

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ BP CMS area acquisition – August 2000

Tullow Equity (CMS area) 350

300

250

200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ CMS III development – August 2002

Tullow Equity (CMS area) 350

300

250

CMS3 200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ Munro development – October 2005

Tullow Equity (CMS area) 350

300

250 Munro CMS3 200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ Schooner / Ketch acquisition – March 2005 (do nothing profile)

Tullow Equity (CMS area) 350

300

S&K Base 250 Munro CMS3 200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ Schooner / Ketch - May 2005 (Tullow base plan)

Tullow Equity (CMS area) 350

300 S&K Firm S&K Base 250 Munro CMS3 200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ Schooner / Ketch redevelopment plan 2006+

Tullow Equity (CMS area) 350

S&K Upside 300 S&K Contingent S&K Firm S&K Base 250 Munro CMS3 200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area

□ Potentially commercial developments / exploration upside - unoptimised, unrisked

Tullow Equity (CMS area) 350 Exploration upside K3 area S&K Upside 300 S&K Contingent S&K Firm S&K Base 250 Munro CMS3 200 Boulton Murdoch MMcfd

150

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 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)

800 Cameron Notional pipeline capacity Exploration upside 700 K3 area Cavendish Further Hunter 600 exploration S&K Upside success S&K Contingent predicted 500 S&K Firm S&K Base Munro

MMcfd 400 CMS3 Caister 300 Boulton Murdoch 200

100

0 July July July July July July July July July July July July July July July July 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area - Summary

□ Aligned infrastructure and field equity partnerships

□ Significant growth in Tullow equity gas developments

□ Tullow’s CMS portfolio all at UK market price and produced at high load factor

□ Substantial tariff income potential (Tullow 17% ownership)

□ Blending limits may constrain capacity but;

-New blend management system optimises throughput

-Relaxation of Wobbe limits negotiated at Theddlethorpe

2005 Analyst Day – Bacton Gas Terminal Schooner and Ketch – Peter Evans

2005 Analyst Day – Bacton Gas Terminal Schooner and Ketch Acquisition

Development plan □ Signed SPA Dec 04 □ Completed deal March 05 □ Redevelopment plan Mid 05 □ Rig Mobilisation Oct 05

Operational & Commercial opportunities □ Improve facilities uptime □ OPEX synergies □ Well recompletions and infill drilling □ Schooner Exploration well □ Topaz development & tariff □ Other 3rd party business

Rationale □ Gas in place of 1,500bcf □ c. 350bcf (23%) recovered to date □ Potential to double rate and recovery

2005 Analyst Day – Bacton Gas Terminal Schooner & Ketch – Facility Infrastructure/Organisation

□ Tullow Equities : Schooner 90.35% Ketch 100%

□ S&K Facilities Consist of Two Normally Unmanned Installations (NUI) tied back to the Murdoch Platform and CMS infrastructure by a 22 and 26 km sub-sea pipelines.

□ Tullow Operates S&K and Conoco Philips operates Murdoch and CMS

2005 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 maintain redevelopment schedule - Redevelopment team in place early generating opportunities - Specialist drilling and work-over team recruited - Committed to Ensco 101

2005 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 maximise recoveries - 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 the application of technology

2005 Analyst Day – Bacton Gas Terminal Schooner & Ketch : Early Success

80 Ketch Schooner

50 PlannedPlanned CMSCMS 40 shutdownshutdown

Throughput 30

10 TookTook overover operatorshipoperatorship

0 Jan’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 arrives

2005 Analyst Day – Bacton Gas Terminal Schooner & Ketch : Well Optimisation Project

Ketch workovers and stimulation 30 Schooner workovers and stimulation □ Schooner -Velocity strings and straddles on 25 Schooner 1, 3, 4, 5, 6, 8 and 9 -Water shut-off and perforations (possible stimulations) Schooner 8 20 -Perforation and stimulation Schooner 4, tubing wash Schooner 9 15 □ Ketch -Velocity string Ketch 5 and straddles 10 Ketch – 1 and 3

Gas production mmscfd -100% -Re-perforation and additional 5 perforations Ketch 1 and 3 - Tubing wash Ketch - 6

0 Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 05 06 06 07 07 08 08 09 09 10 10

2005 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 - 10

Gas production mmscfd 10

0 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

2005 Analyst Day – Bacton Gas Terminal Schooner & Ketch : Ketch – 7, 4st & 8

0 1 2 9 1 0 2 0 8 25 12 90 0 00 26 1 1 12 2 5 1 0 0 8 2 8 2 0 1 0 2 7 1 5 4428K6y 0 2 4428K6z 0 8 0 0 1254312536

00 □ Ketch - 7 127 12 600

12 70 - Horizontal development well in Carboniferous 0

126 - 23 BCF incremental reserves 00

1 - Production peak 30 mmscfd 2700

0 8

1 2

270 1 0 12200 00 125 1 2 8 - Declines to 15 mmscfd after 1 year 0 0 12600 0 50 12 12600

12 500

12400 12

500 5

8 300 12 12 □ Ketch – 4st 442801 12379 K 1 24 A 00 - Replacement well for KA04 04 K s A t T 0 4428K4zra 8 12349 jec - 12 BCF incremental reserves tor T y ra j e 12300 c 12 t 4428K5 300 o 12253 - Production peak 20 mmscfd ry

2200 1 1 25 00

00 2 2 - Declines to 12 mmscfd after 1 year 1 1 2 6 0 0 0 10 12 1 1 2 2 3 7 0 0 0 0 12100

1 28 1 4428K2 2 2 1 8 12 1 2

5 0 2 2 0 4 0

0 2 K 0 0 22 0 0 12182 A 1 0 1 2

0 0 7 4 T 0 rajectory 0

1 2 5 0 0

Ketch - 8 2 □ 4 1 0 2 2 0 00

1 2 7 0 1 0 2 1 8 1 2 - Four legged multi-lateral 2 10 8 2 0 0 5 0 1 1 2 34 9 0 1 00 0 10 2 0 0 12 1 1 10 0 2 2 0 3 1 100 0 2 1 1 3 0 1 0 0 1 12 - 15 BCF incremental reserves 13 2 20 2 5 0 0 0 13 0 0 30 0

13 1 5 2 0 10 0 0

- Production peak 65 mmscfd 121 00 1 3 3 0 1 0 34 1 0 3 0 120 50 00 0 12 12 3 20 00 0 13 60 - Declines to 26 mmscfd after 1 year 0

1 24 - Contingent on KA-7 horizontal drilling success 00 133 00 13 40 0 4428K1 00 136 11959 442802 11939

12 6 00 1250 1 0 27 13 1 00 1 5 2 23 00 8 1 0 28 1 0 2 0 26 5 0 00 1 29 0

2005 Analyst Day – Bacton Gas Terminal 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 Base – further activity Concurrent well optimisation work - Mechanical interventions to accelerate production Contingent resources Rig move - New field potential attractive – NW Schooner Upside

2005 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Schooner SA10 (attic) Schooner – perforations, stimulation Schooner (5 workovers – vel/strad) Ketch KA07 (three stage horizontal) Ketch – perforations, stimulation Ketch (3 workovers) Ketch KA04 (horizontal sidetrack Ketch KA08 (4 leg vert multi-lateral)

2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Schooner NW appraisal (SB-1 location Schooner SA-07 sidetrack Schooner SA2 workover Schooner SA-11 development well Schooner NW development well 2 Schooner Ketch follow-up well Yawl/SW Ketch exploration

2005 Analyst Day – Bacton Gas Terminal Schooner & Ketch : Schooner NW Appraisal

□ NW Schooner Appraisal

- 140 BCF Gas In Place (success)

G W -New location C - Drill Q4 2006 - High production rates - Three legged multi-lateral

2005 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 stimulation □ Total Drilling and Optimisation Capex £88 MM for the 2005 - 2006 firm programme □ Facilities capacity upgrades and metering

200 Upside 180 Contingent Base - further activity 160 Base - no further activity

140

120

100 ``````````````````

Gas Production mmscfd 60

0 Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- Oct- 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15

2005 Analyst Day – Bacton Gas Terminal Schooner & Ketch : New Exploration Acreage

□ Arrol 44/26a to NE of Ketch (100% Tullow)

□ Ketex 49/3 south of Ketch – good material prospect west of Ketex discovery 43/23b (100% Tullow) Endeavour 50% Tullow 50% □ Stephanian Play – West of Schooner (GdF operate exploration phase, Tullow 33.33%)

Arrol

44/28a & 49/3(p) Tullow 100%

Ketex

43/30b, 48/5(p) & 49/1(p) GDF 33% Tullow 33% Endeavour 33%

2005 Analyst Day – Bacton Gas Terminal Exploration – Chris Flavell

2005 Analyst Day – Bacton Gas Terminal 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 exploration

2005 Analyst Day – Bacton Gas Terminal Thames & Hewett Regional Map Acreage post BP acquisition

21 0 Kilometres 10 Blythe 49 50 23a 48 Gawain

29 30 28 29c 26a Big Dotty Bure Deborah Dawn Thames Delilah Orwell

Wensum 29d 30b 26b Deben Della Fizzy Hewett Little Dotty Yare

3d 4a

4a Welland Horne 5a 3c Wissey 52 53 Wren4c England 4b 54 Bacton 1a

Tullow non-operated Tullow operated Licensed acreage Open acreage

2005 Analyst Day – Bacton Gas Terminal Thames & Hewett Regional Map Current acreage position

Ongoing development evaluation 21 0 Kilometres 10 Blythe 22a 49 50 23a Delilah development well late 200548 Thurne- Gawain development opportunity

29 30 28 26a Big Dotty Bure Ongoing Deborah development Dawn Thames Delilah evaluation Orwell

Wensum 30b 26b Deben Della Fizzy Hewett – Significant Hewett Little Dotty Chesham- Yare reduction in operating exploration opportunity 1a costs in 2004 & 2005 3a 4a 4a Welland Horne 5a 3c Arthur Wissey Zechsteinkalk infill opportunities 53 4a 54 52 Wren England 3b 4b Ongoing Bacton development Horne and Wren development evaluation 1st gas June 2005 Tullow non-operated Tullow operated Licensed Clear move to acreage Open Operatorship acreage

2005 Analyst Day – Bacton Gas Terminal CMS Regional Map Acreage post BP acquisition

6 7 8 10 11 12 13a 0 9 Kilometres 10 14 15 □ 4 blocks 44

16 17a 18

25a Murdoch 21a 22a Boulton

22b

48 49

Tullow non-operated Licensed acreage Tullow operated Open acreage

2005 Analyst Day – Bacton Gas Terminal CMS Regional Map Current acreage position

6 7 8 11 12 13a 0 9 Kilometres 1010 11 12 14 15 □ 29 blocks Munro exploration success 2004 44/12 appraisal 44 well 2006 44/16 exploration 16 17a 18 Hawksley well 2006 16 44/19b exploration Munro well 2006

17b 18b 43 19b 23rd Round Opal exploration success 2005 McAdam Awards 2005 23b 23b K3 exploration success 2005 25a Murdoch 21a 22a Boulton 22b 23a B1 21c Watt 44/23b exploration Caister well 2006 Boulton H 22b 27b Schooner/Ketch28 acquisition29 2005 30b 28a 26b

Schooner Garnet Ketch 23rd Round Awards 2005 26a 27a 28b 05 1b 3(N) 49/03-3 2a 23rd Round Topaz 48Awards 2005 2b 49/3a exploration Marjan 49 well 2006 ?

Tullow non-operated Licensed acreage Tullow operated Open acreage

2005 Analyst Day – Bacton Gas Terminal CMS Exploration Focus

□ Play types

□ Identifying the Lower Ketch play

□ Portfolio summary

□ Potential future activity levels

2005 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-explored

2005 Analyst Day – Bacton Gas Terminal CMS Area – Play Concept – Westphalian C/D

Top Rotliegendes Seismic Marker BPU Silverpit – must seal BPU

Carboniferous Base Murdoch Isopachs

KEY:

Lower Ketch 2 Reservoir (similar to Munro, K3, Hawksley, Murdoch K & Boulton B)

Reliable seismic picks at Top Rotliegendes and Base Murdoch.

2005 Analyst Day – Bacton Gas Terminal CMS Area – Play Concepts – Westphalian C/D

□ Reservoir interval seismically opaque

□ Top Seal horizon only sporadically imaged

□ Reliance on substantial well data to build interval isopachs

□ Note Plattendolomite ‘hole’

2005 Analyst Day – Bacton Gas Terminal Greater CMS Area – Impact of K3 Success

B K3 Discovery B’ N S

Zechstein

Silverpit

WpA WpA

2005 Analyst Day – Bacton Gas Terminal Depth Converted Seismic & Geological Model

N 44/18-3 K344/23-8 K4 S

-12420 -12600

44/18-3 44/23-8

Hard kick

-12420 -12600

13 km

2005 Analyst Day – Bacton Gas Terminal Summary and Conclusion

SNS 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 strategy

Tullow is well positioned to take advantage

2005 Analyst Day – Bacton Gas Terminal UK Gas Market & Hedging

□UK Gas Market - Overview - Pricing - UK Supply/Demand

□Tullow UK Gas Portfolio

□Hedging/IAS39

2005 Analyst Day – Bacton Gas Terminal UK Gas Market

□Overview

2005 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 indigenous decline

□ Eon acquisition of Caledonia; security of supply

2005 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) and hubs (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 challenges facing 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 supply shortfall; 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

□Pricing

2005 Analyst Day – Bacton Gas Terminal Gas Pricing Background

Gas Supply □ Transition from self-sufficiency to importation □ Increasing importance of indigenous gas

Forward Curve Comparison 80 Arco Schooner / Ketch 30/09/2005

40 p/therm 30

0 Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08

2005 Analyst Day – Bacton Gas Terminal UK Gas NBP: Spot History and Swaps

UK Gas NBP Historical Prices, Calendar 2006 and Calendar 2007 Swaps 120

110

100

70 Calendar 2006 60

50 GB Pence/therm 40 Calendar 2007 30

10 Spot History

Jan Apr Jul Oct Jan Apr Jul Oct 2004 2005

Past performance is not indicative of future performance. Source: trading history as at 6 Oct05

2005 Analyst Day – Bacton Gas Terminal Dated Brent: Spot History and Swaps

Dated Brent Historical Prices, Calendar 2006 and Calendar 2007 Swaps 70

60 Calendar 2006 55

40 USD/barrel Spot History

Calendar 2007 30

Jan Apr Jul Oct Jan Apr Jul Oct 2004 2005

Past performance is not indicative of future performance. Source: trading history as at 6 Oct05

2005 Analyst Day – Bacton Gas Terminal UK Gas NBP and Dated Brent Comparison

Dated Brent Calendar 2006 relative to UK Gas NBP Calendar 2006 2.8

2.6

2.4 Dated Brent Calendar 2006 2.2

2.0

1.8

1.6

1.4

1.2 NBP Calendar 2006

1.0

0.8

Jan Apr Jul Oct Jan Apr Jul Oct 2004 2005

Past performance is not indicative of future performance. Source: trading history as at 6 Oct05

2005 Analyst Day – Bacton Gas Terminal Spot, Quarterly and Winter 04 Averages

1st August 2003 NBP Win05 vs History 3rd August 2005 120 Spot Quarter average Win04 average=33 pence/therm 110

100

Oct Jan Apr Jul Oct Jan Apr Jul 2003 2004 2005

2005 Analyst Day – Bacton Gas Terminal Natural Gas: Current Annual Forward Prices p/therm

"Gasunie"

US NG 60 NBP

Zeebrugge

35 2006 2007 2008 2009 2010 2011 2012

Note: 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 is

2005 Analyst Day – Bacton Gas Terminal UK Gas Market

□UK Supply/Demand

2005 Analyst Day – Bacton Gas Terminal Transco View of Implied Import Requirement

2005 Analyst Day – Bacton Gas Terminal Transco View of Supply/Demand Balance

2005 Analyst Day – Bacton Gas Terminal New UK Infrastructure: Pipeline & LNG

2005 Analyst Day – Bacton Gas Terminal UK/Europe

CARTAGENA HUELVA ALGERIAN GAS

ALGERIAN GAS

2005 Analyst Day – Bacton Gas Terminal Globalisation: LNG

Major LNG Supply Routes

2005 Analyst Day – Bacton Gas Terminal Tullow UK Gas Portfolio

2005 Analyst Day – Bacton Gas Terminal 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 in Newcastle)

□ 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 NBP

Beach Trading

Retro Trading Traditional swing contract Delivery Point Cash out NBP Trading

GasGas TranscoTransco NTS ProcessingProcessing Flange EntryEntry NBPNBP FacilityFacility FacilityFacility

Entry Capacity CVSL

Storage Offshore LDZ End Users

DTI Ofgem

2005 Analyst Day – Bacton Gas Terminal Hedging/IAS39

2005 Analyst Day – Bacton Gas Terminal 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, market benchmarks)

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 12 month 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

¾…no price levels specified although hedging in excess of bank price deck creates debt liquidity

2005 Analyst Day – Bacton Gas Terminal Hedging: How & Who With

□ How: - Swaps ¾ downside protection; no exposure to upside - Put Options ¾ downside protection; retains exposure to upside - Zero Cost Collars ¾ downside protection; retain market pricing within collar, no exposure to upside above collar - Participations ¾ downside protection; some exposure to upside - Physical Forwards ¾ as in Swap but Shortfall exposure

□ Who With: - Participants in Refinance Facility Syndicate - US Investment Banks - Trading Houses

2005 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 Net Premium

2005 Analyst Day – Bacton Gas Terminal Hedging: Volumes & Prices

H2 2005 2006 2007 OIL Volume hedged (bopd) 9,946 8,231 7,731 Current price hedge ($/bbl) 36.3 35.0 33.0 GAS Volume hedged (mmcfd) 57.1 45.1 6.3 Current hedged p/therm 34.9 43.9 59.5

□ 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 2006

2005 Analyst Day – Bacton Gas Terminal IAS 39: Financial Derivatives

Key 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 mature

2005 Analyst Day – Bacton Gas Terminal Summary – Alan Linn

2005 Analyst Day – Bacton Gas Terminal SNS Position in Tullow Portfolio

□ 30% group commercial reserves and 20% of group contingent reserves

□ 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 2005 production (with Alba)

□ Horne & Wren development completed in June and production exceeding expectation (110mmscfd gross/ 55 mscfd nett)

□ Significant exploration potential in CMS area

□ Working to further extend Hewett/Bacton economic life

2005 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 future

2005 Analyst Day – Bacton Gas Terminal Tullow Oil plc 3rd floor Building 11 Chiswick Park 566 Chiswick High Road London W4 5YS Email: [email protected] www.tullowoil.com

A leading independent oil and gas exploration and production group

2005 Analyst Day – Bacton Gas Terminal