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  • Glossary

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    Glossary

    A

    AGM

    Annual General Meeting

    AFS

    Available for sale

    B

    bll

    Barrel

    bcf

    Billion cubic feet

    boe

    Barrels of oil equivalent

    boepd

    Barrels of oil equivalent per day

    bopd

    Barrels of oil per day

    C

    CMS

    Caister Murdoch System

    CMS III

    A group development of five satellite fields linked to CMS

    CR

    Corporate Responsibility

    CSO

    Civil Society Organisation

    CNOOC

    China National Offshore Oil Corporation

    D

    DLT

    Development Leadership Team

    DoA

    Delegation of Authority

    DRC

    Democratic Republic of Congo

    DSBP

    Deferred Share Bonus Plan

    E

    EA

    Exploration Area

    E&E

    Exploration and evaluation

    E&A

    Exploration and Appraisal

    E&P

    Exploration and Production

    EBITDA

    Earnings Before Interest, Tax, Depreciation and Amortisation

    EHS

    Environment, Health and Safety

    EMS

    Environmental Management System

    ERC

    Energy Resource Consultants

    ESOS

    Executive Share Option Scheme

    F

    FEED

    Front End Engineering and Design

    FPSO

    Floating Production Storage and Offloading vessel

    FRC

    Financial Reporting Council

    FRS

    Financial Reporting Standard

    FTG

    Full Tensor Gravity Gradiometry

    FTSE 100

    Equity index whose constituents are the 100 largest UK listed companies by market capitalisation

    FVTPL

    Fair Value Through Profit or Loss

    G

    GELT

    Global Exploration Leadership Team

    GNPC

    Ghana National Petroleum Corporation

    GoU

    Government of Uganda

    Group

    Company and its subsidiary undertakings

    H

    H&S

    Health and Safety

    HIPO

    High Potential Incident

    HNBS

    Hewitt New Bridge Street

    HR

    Human Resources

    I

    IAS

    International Accounting Standard

    IASB

    International Accounting Standards Board

    IFRIC

    International Financial Reporting Interpretations Committee

    IFRS

    International Financial Reporting Standards

    IMS

    Information Management System

    ISO

    International Organization for Standardization

    K

    km

    kilometres

    KPI

    Key Performance Indicator

    L

    LIBOR

    London Interbank Offered Rate

    LTI

    Lost Time Incident

    LTIFR

    LTI Frequency Rate measured in LTIs per million hours worked

    M

    mmbbl

    Million barrels

    mmbo

    Million barrels of oil

    mmboe

    Million barrels of oil equivalent

    mmscfd

    Million standard cubic feet per day

    MoU

    Memorandum of Understanding

    MTM

    Mark To Market

    N

    NGO

    Non-Governmental Organisation

    O

    OR&A

    Operational Readiness and Assurance

    P

    p

    pence

    P10

    Reserves and/or resources estimates that have a 10 per cent probability of being met or exceeded

    P50

    Reserves and/or resources estimates that have a 50 per cent probability of being met or exceeded

    P&D

    Production and Development

    PAYE

    Pay As You Earn

    PRT

    Petroleum Revenue Tax

    PSC

    Production Sharing Contract

    PSP

    Performance Share Plan

    S

    SCT

    Supplementary Corporation Tax

    SIP

    Share Incentive Plan

    SMC

    Senior Management Committee

    SPA

    Sale and Purchase Agreement

    sq km

    Square kilometres

    SRI

    Socially Responsible Investment

    T

    toes

    Tullow Oil Environmental Standards

    TSR

    Total Shareholder Return

    U

    UK GAAP

    UK Generally Accepted Accounting Principles

    V

    VAT

    Value Added Tax

    W

    WAEP

    Weighted Average Exercise Price

    WCTP

    West Cape Three Points

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Operating profit, costs, taxation and dividends

Operating profit

Operating profit amounted to $234.6 million (2009: $151.0 million), an increase of 56%. The increase was principally due to higher commodity prices, partly offset by higher exploration costs written-off during 2010 together with higher staff related general and administrative costs.

Gearing, financing costs and interest cover

The net interest charge for the period was $55.0 million (2009: $58.7 million) and reflects the increase in net debt levels during 2010 offset by an increase in interest capitalised during the year on qualifying assets, principally associated with the Jubilee phase 1 development in Ghana.

At 31 December 2010, Tullow had net debt of $1,943 million (2009: $1,144 million), with unutilised debt capacity of approximately $685 million. The Group’s gearing was 50% (2009: 47%) and EBITDA interest cover has increased to 13.8 times (2009: 10.3 times).

Taxation

The tax charge of $79.4 million (2009: $1.9 million) relates to the Group’s North Sea, Gabon, Equatorial Guinea and Ghanaian activities. After adjusting for exploration costs and profit on disposal of subsidiaries, the Group’s underlying effective tax rate is 26% (2009: 3%). The increase in the effective tax rate is mainly due to the fact that losses were generated in fiscal regimes where uncertainty exists as to the recoverability of those losses.

Dividend

Due to the ongoing capital requirements of the Group, and in particular the opportunity to add significantly to shareholder value by continuing to invest in its exceptional portfolio of exploration assets, the Board believes that it remains appropriate to maintain the final dividend at the 2009 level. Consequently, the Board has proposed a final dividend of 4.0 pence per share (2009: 4.0 pence per share). This brings the total payout in respect of 2010 to 6.0 pence per share (2009: 6.0 pence per share). The dividend will be paid on 20 May 2011 to shareholders on the register on 15 April 2011.

Financial statements

With effect from 1 January 2010 Tullow presents its financial statements in US dollars.