Tullow Oil Swaps UKCS Acreage with Shell

Tullow Oil's subsidiary, Tullow Oil UK Limited, has agreed to swap a 25% interest in its Southern Gas Basin Block 53/4a (License P039, excluding the producing Welland field) for Shell's entire 24.805% interest in Inner Moray Firth Block 20/7a (License P272), situated 18km east of the Buzzard field. TOUK will retain a 50% equity holding and operatorship in Block 53/4a, which contains the undeveloped Wissey gas discovery. Shell's interest in 20/7a is held by its wholly owned subsidiary Enterprise Oil U.K. Limited. Completion of the acreage swap is subject to certain rights of existing equity holders in the licenses, and approval of the Secretary of State for Trade and Industry.

An exploration well, 20/7a-4, which spudded on March 9th, will test the "Squirrel" prospect, which has a reserve potential of up to 100mmbbl of oil. The well is anticipated to take 30 days to reach total depth.

John Lander, TOUK's Managing Director, stated: "This transaction is another step in TOUK's desire to expand its North Sea interests beyond the Southern Gas Basin and into the oil provinces of the Moray Firth and Central North Sea. In this case it gives the company early exposure to the exciting exploration trend that contains the Buzzard field. Equally, Shell's participation with us in Block 53/4a gives us the opportunity to work together on the potential development of a number of discoveries where we have a common interest, such as the Horne and Wren discoveries, as well as Wissey."