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These arrangements will enable the Group to progress the appraisal and development of existing discoveries and pursue exploration in a new contract area covering 10,725 square kilometres with Tullow as operator.

The new arrangements, reached through transactions with partners and PSC awards from the Government, result in the exploration areas of the PSCs previously known as PSC-Area A and PSC-Area B being replaced by a new, single Exploration PSC called C‑10. Tullow will operate this new PSC with a 59.15% interest. The existing Banda, Tevet and Tiof discoveries have been ring-fenced under their original PSC terms and extensions of up to 18 months have been granted to allow appraisal and development activities to be completed. Petronas will continue to operate Chinguetti Field on the basis of the original equities.

Tullow will now work closely with the Government of Mauritania and its Joint Venture partners on the near-term commercialisation of the existing discoveries and the initiation of a high-impact exploration programme. The development of the Banda gas and Banda oil rim discoveries will be prioritised and it is expected that the results of initial development studies will be presented to the Government in early 2012. The high impact exploration programme is expected to include a minimum of two wells over the next three years.

Following the various agreements with partners and the Government of Mauritania, Tullow has significantly increased its equity position in the region. Partner equities in the new licences are summarised in Table 1 and a map of the Group’s Mauritanian acreage can be accessed via the following link: New Tullow Mauritania Map

Table 1 – New percentage interests in Mauritania*

Licence (%) Tullow Petronas Kufpec Premier SMH
PSC A 67.301 (op) 15.000 13.084 4.615 0.000
PSC B 64.139 (op) 15.000 11.630 9.231 0.000
C‑10 59.150 (op) 13.500 11.120 6.230 10.000

* The equity figures shown are subject to entry into force of the Farm-out agreement between Petronas and Tullow and conclusion of the Joint Operating Agreement for the new Exploration PSC, C‑10.

As a result of this increase in activity in Mauritania, Tullow expects to significantly enhance its presence in Nouakchott, with a strong focus on the development of local staff and local content wherever possible. Furthermore, Tullow will be looking to award a number of bursaries to suitably qualified students from Mauritania.

Commenting today, Aidan Heavey, Chief Executive, said:

“We are delighted to have agreed new PSC arrangements offshore Mauritania. As Operator of the Banda, Tiof and Tevet discoveries, we will now work closely with the Government of Mauritania to commercialise these important hydrocarbon resources. We have also identified significant new exploration potential in this acreage and look forward to applying the knowledge and expertise of similar geological plays gained from our successful Equatorial Atlantic exploration campaigns in West Africa and South America. While we have worked in Mauritania for many years, this is essentially an exciting new beginning for Tullow as we increase our equity and take on the operatorship in these highly valuable and prospective licences.”

Tullow Group Overview

Tullow is a leading independent oil & gas, exploration and production group, quoted on the London, Irish and Ghanaian (symbol: TLW) stock exchanges and is a constituent of the FTSE 100 Index. The Group has interests in over 90 exploration and production licences across 22 countries and focuses on four core areas: Africa, Europe, South Asia and South America.

In Africa, Tullow has production in Ghana, Gabon, Côte d’Ivoire, Mauritania, Congo (Brazzaville) and Equatorial Guinea with two large appraisal and development programmes in Ghana and Uganda. Tullow also has exploration interests in Gabon, Côte d’Ivoire, Liberia, Sierra Leone, Mauritania, Senegal, Tanzania, Madagascar, Namibia, Kenya and Ethiopia.

Tullow’s European interests are focused on gas in the UK Southern North Sea where it has significant interests in the Caister-Murdoch System and the Thames area and in the Netherlands where it has offshore gas production, development and exploration opportunities.

In South Asia, Tullow has exploration and production in Bangladesh and exploration interests in Pakistan. In South America, Tullow has exploration interests in Guyana, French Guiana and Suriname.