Tullow to Acquire Additional Stake in Hewett Unit

Tullow Oil UK Limited has entered into Heads of Terms with the current operator, ConocoPhillips (U.K.) Limited, to purchase its 18.97% equity in the Hewett Unit, the associated export pipelines and the related Bacton onshore gas processing terminal, and to assume operatorship.

The total consideration, payable on completion, is $3.75m, with an effective date of January 1, 2003. TOUK currently owns 19.85% of the above interests, purchased from BP/ARCO. The gross remaining reserves of the Hewett Unit as at the effective date are currently estimated at 48.5bcf of sales gas. ConocoPhillips (U.K.) Limited is the British exploration and production affiliate of ConocoPhillips Inc.

The Hewett Bacton infrastructure comprises six offshore installations, three normally unmanned, and the others forming a central processing complex which exports gas to the onshore terminal at Bacton in East Anglia. The Bacton Terminal also processes gas from other fields, including the Thames Area fields and their satellites where TOUK has significant interests.

TOUK will take over the operatorship of both the Hewett Unit and the onshore Bacton Terminal. For this purpose, TOUK intends to enter into an arrangement with Petrofac Facilities Management Ltd (Petrofac) to be the Duty Holder for the Hewett Unit and to provide the day-to-day operational management and associated support services to the facilities. Tullow has appointed Alan Marshall as Regional Manager, based at Bacton. He and a small support team of Tullow staff will work jointly with Petrofac. Alan has considerable operational and managerial experience of major North Sea production facilities.

Negotiations on the full legal documentation to implement the proposed commercial and operational arrangements are continuing and are expected to be finalized in the third quarter of 2003. Completion of the transactions will also be subject to the necessary governmental and co-venturer approvals.

John Lander, TOUK's Managing Director, stated: "This important acquisition and operatorship will enhance Tullow's position in our Hewett/Thames core area. It is our view that smaller companies such as Tullow can bring a more focused approach to assets which might not be seen as material to the larger oil companies. Through a number of initiatives we see a great opportunity to extend the economic life of the Hewett Unit and the Bacton Terminal. We intend to continue the current operator's excellent record on safety and environmental performance and look forward to enjoying a long and stable working relationship with our new workforce, the local authorities and the local community".