2017 Full Year Results

$1.7 billion sales revenue; $543 million free cash flow; 2.6x gearing ratio
  
Kenya’s potential confirmed; proposed First Oil in early 2020s
   
Exploration portfolio fully re-set: multiple high impact campaigns over next three years 

 COMMENTING TODAY, PAUL McDADE, CHIEF EXECUTIVE OFFICER, SAID:

“I am pleased to report that Tullow made excellent progress in 2017 as demonstrated by our substantial free cash flow generation and significantly reduced gearing. Strong production and disciplined cost management has allowed us to continue to both reduce debt and invest in our high-return production assets in Ghana. The assessment of the results from our appraisal campaign in Kenya also fully supports progress towards a major development of the South Lokichar Basin. As we continue to retain a keen focus on the financial discipline that has served us so well, we are now also looking to grow the value of our business both through exploration, following a full re-set of the portfolio, and through other opportunities that the recovery in the sector will present.”

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2017 FULL YEAR RESULTS SUMMARY

• Revenue of $1.7 billion plus lost production insurance proceeds of $162 million; gross profit of $815 million; post tax loss of $189 million after write-offs and non-cash impairments; free cash flow of $543 million
• $2.5 billion RBL re-financed in November 2017; year-end 2017 net debt of $3.5 billion with facility headroom including free cash of $1.1 billion; net debt to adjusted EBITDAX gearing ratio of 2.6x
• 2017 capex of $225 million; 2018 capex forecast of $460 million (excluding Uganda expenditure of $110 million which will be repaid following completion of the Uganda farm-down)
• West Africa 2017 net working interest oil production, including production-equivalent insurance payments, averaged 89,100 bopd; 2018 production is expected to average between 82,000 and 90,000 bopd
• Incremental drilling programme due to start in February 2018; this additional well capacity combined with current strong production from both Jubilee and TEN fields will maximise and sustain production in the coming years
• Kenya resources assessment completed: 240 – 560 – 1,230 mmbo (1C–2C–3C) contingent recoverable resources from an overall discovered STOIIP of up to 4 billion barrels. Phased development is planned with FID in 2019 and First Oil in 2021/22
• Uganda deal completion expected in H1 2018; JV Partners working towards FID around mid-year
• Exploration portfolio now reset through disposals, farm-downs and the addition of significant new positions in Côte d’Ivoire and Peru. Multiple high impact exploration campaigns planned over next three years, starting with the high-impact Cormorant well in Namibia in H2 2019