Tullow Announces Record Results for 2005

"2005 was a year of many achievements for Tullow which included our first operated UK offshore development, the largest refinancing ever undertaken by a UK oil and gas independent, and a record level of development, exploration, and new venture activity across the group's three core areas," said Pat Plunkett, Tullow's chairman. "Today’s record results demonstrate the quality and depth of Tullow’s portfolio. We are reaping the benefits of the scale achieved through our major acquisition and investment program of recent years and we look forward to the many exciting opportunities for further development and growth in 2006 and beyond."

Tullow reported a 98-percent increase in sales in 2005: GBP 445.2 million (US$772.3 million) versus GBP 225.3 million (US$391 million) the previous year. The company's operating profit increased 250 percent to GBP 198.6 million (US$344.5 million), compared to GBP 56.8 million (US$98.5 million) in 2004. Its before-tax profit jumped 282 percent, from GBP 46.8 million (US$81.2 million) to GBP 178.6 million (US$310 million).

The independent's operating cash flow before working capital increased from GBP 139.5 million (US$242 million) to GBP 288.1 million (US$500 million)--a 106-percent gain. In addition, its basic earnings per share increased 198 percent from GBP 5.88 (US$10.20) to GBP 17.50 (US$30.40). The company's final dividend per share was GBP 3.00 (US$5.20), up 140 percent from GBP 1.25 (US$2.17) the previous year.

Tullow reported several other highlights:

• A 44-percent increase in average annual production to 58,450 boepd
• Organic reserves replacement of 118 percent and a 53-mmboe total reserves increase to 358 mmboe
• A 69,000-bpoed current production level that is expected to reach 75,000 boepd by the end of 2006
• Three discoveries close to Tullow infrastructure in the UK and Gabon
• Completion of the GBP 200 million (US$347 million) Schooner and Ketch acquisition and major redevelopment underway
• Steady progress in the development of the giant Kudu gas project offshore Namibia
• Good progress on the key Okume Complex and West Espoir developments
• Year-to-date exploration that includes two oil discoveries in Uganda, one UK gas discovery, and two dry holes in Gabon.

“Our production is growing strongly," said Aidan Heavey, Tullow's chief executive. "On the exploration front we plan to drill over 20 wells, including further wells in Uganda, where we have scheduled an extensive exploration and appraisal program to build on the recent M’Puta and Waraga discoveries. The outlook for Tullow is very positive. Oil and gas prices are strong and forecast to remain so."