Final Results

Enterprise Oil PLC
8 March 2001

PART 1

                        ENTERPRISE OIL AUDITED RESULTS

                        FOR THE YEAR 31 DECEMBER 2000


Enterprise Oil today announced its results for the year ended 31 December
2000. The main points are:


  * Record post-tax profit of £529.0 million.*


  * Four new fields brought on stream in 2000 as production averaged 280,563
    barrels of oil equivalent per day - the group's highest to date, 31 per
    cent greater than 1999.


  * Reserves replaced by 135 per cent excluding acquisitions - total
    reserves now a group record 1.4 billion barrels of oil equivalent.


  * Exploration and appraisal success in the UK, Ireland, Norway, the US
    Gulf of Mexico and Brazil.


  * Earnings per share of 106.9 pence* (1999: 34.8 pence).


  * Full year dividend of 8.0 pence as against 7.3 pence in 1999.


* Excluding the exceptional item


Sir Graham Hearne, Chairman, commented: 'In 2000 we achieved record turnover,
profits, production and reserves. The year was marked by operational success
in the group's existing core areas and by significant progress in developing
new core areas with future growth potential. Enterprise's outstanding
performance in 2000 demonstrates its ability to generate both growth and
returns.'


Pierre Jungels, Chief Executive, added: 'With production up 31 per cent on
1999 and a realised oil price of £19.05 per barrel, we strengthened the
balance sheet significantly during 2000, with gearing reduced to 30 per cent.
However, we continue to test our potential developments against oil price
assumptions of $15-18 per barrel. In addition, as our expansion into new areas
progresses, we are building a new look Enterprise with a breadth of assets
that will protect cash flow more effectively against future oil price
volatility.'


A copy of the Stock Exchange Announcement is attached.

Ends.

Enquiries:
Pierre Jungels, Chief Executive                                   020 7925 4199
Andrew Shilston, Finance Director                                 020 7925 4476
Patrick d'Ancona, Head of Public Relations                        020 7925 4160
Peter Reilly, Head of Investor Relations                          020 7925 4476



Enterprise Oil plc


AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2000

                                                              2000         1999
                                                                £m           £m

Turnover                                                   1,841.2        850.0
Profit before tax                                          1,059.3        289.2
Profit after tax                                             488.8        177.2
Profit after tax excluding exceptional item                 529.0*        177.2

Basic earnings per share                                     98.7p        34.8p
Adjusted earnings per share                                106.9p*        34.8p
Dividends per share                                           8.0p         7.3p

Average production (boepd)                                 280,563      214,647
Average realised oil price per bbl                          £19.05       £11.46
                                                          ($28.88)     ($18.53)

Cost of sales per boe produced                              £5.85*        £5.46

*excluding an exceptional charge for depreciation of £40.2m arising from a
reduction in the estimated reserves of the Garden Banks 161 field in the US
Gulf of Mexico.



Chairman's Statement


Dear Shareholder,


I am delighted to announce that 2000 was a year in which we were more than
able to sustain the recovery begun in 1999. We achieved record turnover,
profits, production and reserves.


The year was marked both by operational success in the group's existing core
areas and by significant progress in developing new core areas with future
growth potential. The group raised output by 31 per cent on 1999 and yet again
more than replaced its annual production with the drill bit, doing so by 135
per cent. The increase in output coincided with a strong oil price, with the
company realising £19.05 per barrel ($28.88) for the year, as against £11.46
($18.53) in 1999. Earnings per share, adjusted for an exceptional item, stood
at 106.9 pence.


With all the media coverage of so-called super profits in the oil industry
last year, it is salutary to remember that as recently as 1998 the industry
was struggling with oil prices less than half the levels seen last year. While
there are some grounds for believing that we are unlikely to return to such
low levels in the immediate future, it is prudent to plan on the assumption
that volatility will remain a key feature of the oil market. This assumption
will continue to inform our approach to investment and management of our
funds; thinking long-term while maintaining tight capital discipline.


However, given the improvement in our balance sheet brought about by the
increased oil prices last year, and the continuing strong cash flows we are
generating, the Board has decided to activate a stock repurchase programme.


I believe the group's outstanding performance in 2000 demonstrates its ability
to generate both growth and returns. This will remain our objective. It is
proposed to pay a final dividend for 2000 of 5.0 pence, making a full year
dividend of 8.0 pence compared with 7.3 pence in 1999, with a record date of
16 March and payment on 1 June.


I am pleased to welcome Paul B Loyd Jr to the Board as a non-executive
director. Paul was until recently Chairman and Chief Executive of R&B Falcon
Corporation of the US, and will bring a wealth of experience to Enterprise,
particularly in North America.


I would like to thank the management and staff for the skill and commitment
they demonstrated in achieving such outstanding results last year. They remain
dedicated to securing Enterprise's position as a leading independent oil
company.




Sir Graham Hearne

Chairman

7 March 2001




Chief Executive's Review


Overview


  * Record turnover of £1,841.2 million and post tax profits of £529.0
    million, excluding an exceptional item.

  * Production growth of 31 per cent from 1999 at an average 280,563 barrels
    of oil equivalent per day, the group's highest to date. Four new fields on
    stream in 2000.

  * Reserves replacement of 135 per cent and reserves acquired of 110
    million barrels of oil equivalent leading to total reserves of 1.4 billion
    barrels of oil equivalent.

  * Significant progress in projects in the UK, Ireland, Norway, Italy, the
    US Gulf of Mexico and Brazil.

  * Further exploration and appraisal success in the UK, Ireland, Norway,
    the US Gulf of Mexico and Brazil.

  * Successful new ventures activity in Brazil, Iran and Russia.


Introduction


We stated last year that we are committed to creating both growth and returns
over a sustained period and that Enterprise has the assets, people and skills
to do so. 2000 saw us make significant progress in this aim.


As a result of increased production, up 31 per cent on 1999, and a realised
oil price of £19.05 per barrel, up 66 per cent on the previous year, we
strengthened the balance sheet significantly during 2000, with gearing reduced
to 30 per cent. In addition, we have had demonstrable success in progressing
new opportunities whilst maintaining our strict planning hurdles for our
potential developments, continuing to test them against oil price assumptions
of $15-18 per barrel.


The group performed well against its cost targets achieving a finding cost of
74 pence per barrel, and an exploration write-off of 66 per cent of
expenditure. Cost of sales (before an exceptional item) was £5.85 per barrel,
slightly higher than our target of £5.50 per barrel. Returns as measured
previously by ROFA, excluding the exceptional item, were 36 per cent, or 23
per cent treating taxes on a liability, rather than cash, basis.


The group's expansion into new areas continues as we build a new look
Enterprise with a breadth of assets that will also protect cash flow more
effectively against future oil price volatility. To this end our move towards
participating in a buy-back contract in Iran with a fixed rate of return will,
upon the satisfaction of conditions, provide a natural hedge against oil price
volatility within a portion of our portfolio.


Indeed our production, historically based in North West Europe, will see
growing contributions over the next three to four years from Italy, the US
Gulf of Mexico, Brazil and, potentially, the Middle East. It remains our aim
to seek a material presence in all our areas of activity by holding assets in
every phase of the business, from exploration and appraisal, through
development to production. In addition, our interest in the US-registered
independent explorer and producer KMOC, whose assets are located in Western
Siberia, provides us with associated production and reserves for the first
time this year.


Debottlenecking of the Pierce facilities and the outstanding performance of
Jotun led to a degree of accelerated production in 2000 meaning that 2001 is
likely to feel the effects of additional depletion. Furthermore, the delay to
production build-up in Italy, and recent under-performance on Pierce and
Banff, will also affect output this year. The production range for 2001,
therefore, is expected to be between 250-260,000 boepd, although should OPEC
succeed in keeping the oil price in the $22-28 range, our returns on capital
will be robust.


Despite the industry-wide reduction in investment made during the low oil
price environment of 1998-99, Enterprise has continued to progress many
significant opportunities within its portfolio.


With a number of key projects already sanctioned, all tested at $15-18 per
barrel, and the potential of our projects awaiting development and our
existing discoveries, we aim to have new production of more than 150,000 boepd
benefiting the group by 2005. This means that about half our production will
come from new fields in 2005.


We expect to add to output beyond this through our exploration programme which
over the next five years will be directed towards high potential prospects.
Funds directed towards exploration and appraisal will total around £135
million in 2001, including some carry-over from 2000.


Through organic growth, acquisitions and portfolio management, we continue to
target annual growth in production of 5 per cent through the cycle.


Reserves and Production


At the end of the year reserves stood at a record 1,412 million boe as against
1,267 million boe 12 months earlier. Key additions to the reserve base came
from the Skarv area in Norway, and the acquisition of the US Gulf of Mexico
assets of R&B Falcon Corp, including the Boomvang development and the
Gyrfalcon gas field. In addition, the group's interest in the Bijupira-Salema
project in Brazil boosted reserves.


Production averaged 280,563 boepd in 2000, a rise of 31 per cent on 1999, when
output was 214,647 boepd. Four new fields came on stream during the year:
Cook, the group's third operated UK North Sea field; Bell and Bittern also in
the UK; and Sygna in the Norwegian North Sea.


The rise in output was in large part down to the performance of two of the
group's key assets, Pierce, one of our operated UK fields, and Jotun in
Norway. A successful de-bottlenecking operation on Pierce in February 2000
enabled production to rise to levels of up to 71,000 bopd, while on Jotun
output was sustained for periods at over 140,000 bopd, well above original
design specifications. Indeed, Enterprise's output in Norway and Denmark at
106,226 boepd represented an increase of 82 per cent on 1999.


These successes, as well as a continued strong contribution from the group's
operated Nelson field in the UK, offset problems experienced on the Banff,
Bittern and Garden Banks 161 fields. The Banff Ramform vessel has recently
been returned to location following completion of a number of improvements,
and the field co-venturers anticipate improved vessel performance during 2001.


Developments


The group currently has interests in five field developments in progress as
well as several fields awaiting development and a number of potentially
commercial projects. Capital investment in field developments during 2001 is
anticipated to be around £450 million.


In the UK, the Skene development (Enterprise, 15.9 per cent) was sanctioned in
July 2000, and the project is on schedule for first gas in early 2002. The
field will be a further satellite to the Beryl field and will see the
installation of a new compression module on the Beryl riser access tower.


Work on Corrib, the Enterprise-operated gas field development off the west
coast of Ireland, continued to bear fruit, with two further wells completed
during 2000, both of which were suspended as future producers. The project was
sanctioned by co-venturers in February 2001, subject to regulatory and
planning approval, and first gas is planned for the second half of 2003. The
project comprises a subsea tie-back to an onshore gas processing terminal,
with the landfall in County Mayo. Gas will be exported from the terminal via a
Bord Gais Eireann owned and operated pipeline to a tie-in at Craughwell near
Galway to the main Bord Gais distribution system.


In Norway, the plan for the Valhall Waterflood project (Enterprise, 28 per
cent) was submitted to the Government in June and approved in November. First
water injection is anticipated in 2003 with the aim of enhancing production
thereon.


In Italy, construction of the Val d'Agri oil centre (Enterprise, 29 per cent
provisional working share) is nearing completion and work on the pipeline is
well underway, leading to commissioning of the facilities and first export
through the pipeline to Taranto by third quarter 2001. Once production planned
from Cerro Falcone (Enterprise, 55 per cent) is brought through the oil
centre, it is anticipated that the group will have a share of 38 per cent of
the centre's output.


Construction work on the Boomvang project (Enterprise, 50 per cent) is ongoing
at the Aker Maritime yard in Finland where the SPAR hull is being built, and
at the McDermott yard in Morgan City, Louisiana, where the topside is being
fabricated. First oil is expected in the first half of 2002. The group's
interest in the field was acquired through our purchase in 2000 of R&B Falcon
Corp's exploration and production holdings in the US Gulf of Mexico.


On the Clair field, co-venturers are completely aligned in the drive to secure
project sanction by late 2001 or early 2002. Front-end engineering and design
contracts were awarded in October 2000.


The group's operated Bijupira-Salema project in Brazil, in which it has a 55
per cent interest, is progressing well, with sanction expected in the second
quarter 2001. Key contracts were awarded earlier this year and the
development, which will utilise a floating production storage and offloading
vessel (FPSO), is due to come on stream in 2003.


Exploration and Appraisal


Finding costs were 74 pence per barrel of oil equivalent in 2000, as against
60 pence per barrel in 1999. On a rolling three-year basis the group's finding
cost stands at 79 pence. The exploration and appraisal spend for 2000 totalled
£102.9 million (1999: £100.0 million).


In 2000 the group participated in the completion of 18 exploration and
appraisal wells of which 10 were successful. Since year end, an additional
four wells have been completed including a further two discoveries.


In Norway the group had particular success with six discoveries from seven
wells. Most significant among these were the Falk and Svale discoveries
(Enterprise interest 10 per cent in each), both of which may be tied in to the
nearby Norne field. Success at Snadd was a further boost to the group's view
of the hydrocarbon potential of the Skarv-Idun-Norne trend in which Enterprise
is the only co-venturer to hold equity in all the key discoveries. There was
also success for the group with its Barents Sea wells, the first of which,
Goliat (Enterprise, 15 per cent), discovered oil in a frontier area previously
regarded as more likely to yield gas.


The Enterprise-operated Benbecula well (Enterprise, 35 per cent) in the UK
part of the Rockall Trough discovered gas in this frontier area in May. The
results are being evaluated to determine future plans for the area. In
February this year, the group completed the appraisal of the Howe oil
discovery, 12 kilometres from Nelson.


In the US Gulf of Mexico, the Llano discovery was further appraised
successfully. The group has a 30 per cent interest in the field. This second
appraisal well encountered hydrocarbons in the lower Pliocene and Miocene
sands, and work continues to determine the best way forward for a development
of the discovery, with further drilling expected in 2001.


Most recently, Enterprise's first exploration efforts in Brazil's Campos Basin
were rewarded with the Curio discovery in the first well on the BC-2 block, in
which it has a 15 per cent interest. The well was not tested but extensive
data has been gathered and the co-venturers are evaluating the information
gained to determine future plans for the block. A second well has been
completed on a prospect 55 kilometres to the northeast of Curio.


Portfolio Management


The group has made further progress in its new venture activities, most
notably with its entry to Iran through a participation agreement with
Petropars. Subject to certain conditions being satisfied, the agreement will
provide the group with a 20 per cent interest in the South Pars gas field
development phases 6, 7 and 8. As part of these arrangements, Enterprise is
providing technical assistance to Petropars and will make a financial
contribution of up to $15 million towards the cost of an appraisal programme
which will be conducted during 2001.


In the US, in addition to Enterprise's acquisition of all of R&B Falcon Corp's
US Gulf of Mexico exploration and production interests, success in lease sales
added 13 blocks, whilst a farm-in to 13 Texaco blocks has allowed the group to
access new exploration opportunities, including the Catahoula well which isdue
to be completed shortly.


Equities for the remainder of field life were agreed by co-venturers for the
Nelson field in the UK, operated by Enterprise, with effect from 1 April 2000.
This alignment, together with state-of-the-art 4D seismic will allow
optimisation of the upcoming infill drilling programme on the field.


The group was awarded stakes in two licences, of 20 per cent and 15 per cent
respectively, in the Faeroe Islands First Licensing Round in August. The
licences, 003 and 006, cover 13 blocks and part blocks and add to Enterprise's
extensive presence in the Atlantic Margin.


In November, Enterprise and its new co-venturers Kerr McGee and Energy Africa
entered into the exploration phase for the Cap Draa Haute Mer licence off the
Atlantic coast of Morocco. A 3D seismic survey is being conducted over this
large area covering six permits.


There was continuing farm-in activity in Norway and Italy, as well as a strong
performance in the 16th Norwegian Licensing Round.


In Russia, the group has increased its holding in the Khanty Mansiysk Oil
Corporation by exercising its pre-emptive right to invest $21.4 million in a
$40 million private placement in November 2000 and acquiring an additional
package of KMOC securities for $3 million from an existing investor, providing
it with a 27.2 per cent undiluted interest (or an 18.6 per cent fully diluted
shareholding after allowing for the exercise of share options). As a result,
the group has for the first time booked associated production and reserves
from KMOC. The group's technical services agreement with KMOC has been
extended to June 2001.


In summary, the group has continued to build on the solid financial and
operational foundations it possesses, and has made great strides in developing
its two new areas of activity in the US Gulf of Mexico and Brazil and in
creating a significant new area in the Middle East.


The group remains focused on maintaining its financial discipline and the
quality of its portfolio, whilst utilising the skills and commitment of its
staff to maximise the value of its assets.


2001 will be a year of much activity for the company, with major milestones
being reached on our operated projects in Ireland and Brazil, and important
new work in Iran. In addition, further high-grading of our existing core areas
will be undertaken to ensure that they continue both to generate returns and
offer growth opportunities. The year will also see an extensive drilling
programme with key wells in the UK, Ireland, Norway, the US Gulf of Mexico,
Brazil and Iran. I look forward to reporting further news on our progress in
our interim results in September.


Pierre Jungels

Chief Executive




Financial Review


Summary


The group's financial position continued to strengthen in 2000. Turnover rose
to £1.8 billion, an increase of £991 million, and profit before tax rose by £
770 million to £1.1 billion. The group made a profit after tax of £529.0
million in 2000, excluding an exceptional item, compared with £177.2 million
in 1999. Adjusted earnings per share, excluding the exceptional item, were
106.9 pence compared with 34.8 pence in 1999.


This impressive financial performance is the result of record production
levels, the sustained high oil price throughout the year and continued cost
and capital discipline leading to significantly reduced net debt.


The results include an exceptional charge of £40.2 million in respect of
accelerated depreciation arising from a downward revision in reserves of the
Garden Banks 161 field in the US Gulf of Mexico.


Production rose to 280,563 boepd, an increase of 31 per cent compared with
1999.


Cost of sales of £5.85 per boe, excluding the exceptional item, was 39 pence
per barrel higher than in 1999.


The Return on Fixed Assets ('ROFA'), excluding the exceptional item, was 36
per cent, a three-fold increase compared with 1999, or 23 per cent on a tax
liability basis (see below).


Turnover


Turnover for the year was £1,841.2 million, a two-fold increase compared with
1999. Of this increase, 72 per cent was due to higher sterling oil price
realisations and 28 per cent was due to higher production. The average
realised oil price for the period was £19.05 ($28.88) per bbl compared with £
11.46 ($18.53) per bbl for the same period last year. Production increased by
31 per cent (or 65,916 boepd) in 2000. A full year of production from the
Pierce field in the UKCS and the Jotun field in Norway, which commenced
production in February and October 1999 respectively, is the main contributor
to this increase.


Operating profit


Cost of sales in 2000 was £641.1 million including the exceptional item.


Cost of sales in 2000 was £600.9 million, excluding the exceptional item,
compared with £427.5 million in 1999. On a per barrel basis, cost of sales
excluding the exceptional item was £5.85 per barrel (1999: £5.46).
Depreciation per barrel has increased by 54 pence due principally to the
higher than average depreciation rate of Jotun, the field with the highest net
production for the group in 2000, coupled with a full year of depreciation on
the field. Conversely, a lower than average operating cost per barrel on the
Jotun field has helped reduce overall opex by 8 pence per barrel.


Exploration and appraisal spend for 2000 was £102.9 million (1999: £100.0
million). Exploration and appraisal costs written off as a percentage of
expenditure were 66 per cent in 2000 (1999: 64 per cent). Administrative and
selling expenses have remained level with the previous year at £36.0 million
(1999: £35.9 million).


The operating result for the period, adjusted to exclude the exceptional item,
was a profit of £1,136.5 million compared with £322.6 million in 1999.


Profit before tax


The net interest charge for the period, after capitalisation and unwinding of
discount costs on long-term provisions, was £38.4 million, an increase of £2.8
million compared with 1999. Net interest costs, before capitalisation and
unwinding of discount costs, have decreased by £11.6 million to £67.9 million
in 2000 due to the significant decrease in net debt. This reduction was offset
by the lower level of interest capitalisation compared with 1999, resulting
from the completion of a number of development projects during 1999.


Profit before tax in 2000, excluding the exceptional item, was £1,099.5
million compared with £289.2 million in 1999.


Taxation


The tax charge for the period was £570.5 million, an increase of £458.5
million compared with 1999. The UK petroleum revenue tax ('PRT') charge was £
111.2 million (1999: £51.4 million). The provision for PRT is calculated for
each discrete period, based on the average oil price for those periods.
Consequently the significantly higher average oil price in 2000 compared with
that in 1999 has resulted in a higher charge. UK corporation tax has increased
by £92.3 million to £153.0 million, reflecting the significantly higher level
of income in 2000.


The overseas tax charge for the period was £306.3 million. The high level of
overseas tax arises from the full use of tax losses in prior years and the
high earnings generated in Norway in 2000. In 1999 there was no Norwegian tax
charge due to the availability of brought forward losses and a high capital
expenditure programme.


The effective tax rate in 2000 was 54 per cent compared with 39 per cent in
1999. The effect of moving to full provisioning for deferred taxes (on an
undiscounted basis) would have been to increase the effective tax rate to
approximately 60 per cent.


Profit after tax


Profit after tax in 2000 was £488.8 million compared with £177.2 million in
1999.


Return on Fixed Assets ('ROFA')


The ROFA measure was designed to reduce the impact of variable tax accounting
provisions, and is calculated after deducting cash taxes paid during the
period. With the extremely volatile oil price, this can cause significant
mis-matches between profits and cash taxes, some of which fall in the
subsequent year. On the basis of accrued current tax liabilities rather than
cash payments, ROFA for 2000 and 1999 would have been 23.2 per cent and 8.6
per cent respectively, rather than 36.0 per cent and 11.7 per cent.


Capital expenditure


Capital expenditure including capitalised interest and acquisitions was £479.4
million (1999: £491.7 million). Production and development expenditure,
including capitalised interest but excluding acquisitions, was £284.2 million
(1999: £382.6 million). This decrease reflects the fact that a number of
development projects, primarily Jotun in Norway and Pierce in the UK, were
completed in 1999.


Exploration and appraisal expenditure, including new ventures, is presently
expected to be approximately £135 million in 2001, compared with £102.9
million in 2000. Production and development expenditure in 2001, excluding
capitalised interest and acquisitions, is expected to be approximately £450
million. This level of expenditure would give rise to a three year average
spend of £344 million compared with a three year average of £341 million at
the end of 2000. The major development projects ongoing in 2001 are: the Val
d'Agri fields in Italy, the Corrib gas field in Ireland, the Bijupira-Salema
fields in Brazil and the Boomvang field in the US Gulf of Mexico.


Cash flow and financing


Operating cash flow after tax and financing costs was £1,050.8 million
compared with £392.3 million in 1999. The increase reflects the significantly
higher sterling oil price realisations and increased production. Interest
cover for finance costs, including preference share dividends, was 15.7 times
compared with 6.3 times for 1999.


Net cash payments on capital items, excluding £84.1 million relating to
acquisition of R&B Falcon Corp's assets in the US Gulf of Mexico, decreased by
26 per cent compared with 1999 due to the lower level of development spend in
2000. Net debt at the end of 2000 was £431.2 million compared with £860.7
million at the end of 1999. Gearing was 30 per cent at the end of 2000 (1999:
80 per cent).


The group had available funds, including committed facilities, of £1.1 billion
at 31st December 2000. In August 2000, Enterprise syndicated a £350 million
committed bank facility to refinance a previous facility nearing maturity.


In October 2000, the company redeemed the $127.5 million Series B Cumulative
Dollar Preference Shares, achieving a saving in ongoing finance costs. The
group's credit ratings from Standard and Poor's and Moody's are unchanged at
BBB+ and Baa1 respectively.

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