Trading Statement and Operational Update

This is in advance of the Group's Full Year Results, which are scheduled for release on 14 March 2012. The Operational Update is in respect of recent production, development and exploration activities. The information contained herein has not been audited and is subject to further review.

• Record full year results expected; 74% E&A success ratio in 2011
• Basin-opening Zaedyus discovery; Jubilee Phase 1A development plan approved

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HIGHLIGHTS

Exploration and Appraisal activities

• 74% exploration and appraisal success ratio in 2011; basin-opening Zaedyus discovery in French Guiana. 
• New exploration partnering initiatives being pursued including a frontier exploration partnership with Shell in the Atlantic basin.
• Great progress on appraisal of Tweneboa-Enyenra-Ntomme (TEN) in Ghana; Ntomme-2A successfully encountered light oil in excellent quality sandstone reservoirs reinforcing the TEN resource base.
• Appraisal activities in Uganda in EA-1 have provided further valuable data; seismic campaign completed; important licence extensions received.
• Surveys in Kenya and Ethiopia completed; Ngamia-1 well in Kenya due to spud imminently.
• High-impact E&A programme consisting of approximately 40 wells planned for 2012. 

Development and Operations activities

• Group working interest production averaged 78,200 boepd in 2011; production in 2012 is forecast to average between 78,000 and 86,000 boepd with an exit rate of over 90,000 boped expected.
• Gross Jubilee production is currently over 70,000 bopd and following a number of remedial activities is expected to average 70,000 to 90,000 bopd in 2012.
• Jubilee Phase 1A development plan now approved with drilling scheduled to commence in March 2012.
• TEN development Front End Engineering and Design (FEED) work is progressing in parallel with appraisal. Plan of Development to be submitted Q3 2012 with first oil expected c.30 months after approval.
• Tullow is finalising arrangements with the Ugandan Government to complete the $2.9 billion farmdown and commence basin development.

Group financials

• Record 2011 financial results expected; 2011 sales revenue of $2.3 billion forecast, over double 2010.
• 2011 full year capital expenditure of $1.4 billion.
• Forecast 2012 capital expenditure of $2.0 billion.

Net debt at 31 December 2011 was approximately $2.8 billion.

COMMENTING TODAY, AIDAN HEAVEY, CHIEF EXECUTIVE SAID:

"Record revenues and cash flows from increased production and strong commodity prices combined with industry-leading exploration success underpin another very good year for Tullow in 2011. In 2012 we expect significant progress in Ghana and Uganda as we move forward with Jubilee well remediation and Phase 1A, TEN and the Lake Albert developments. We have an exciting exploration programme to open new basins, both onshore and offshore, and we hope to extend our reach in Africa and elsewhere along the Atlantic Margins with major new partnerships. There is much to look forward to in the year ahead."