Final Results - Year Ended 31 December 1999

Tullow Oil PLC 6 April 2000 Tullow Oil Plc Preliminary Results for the year ended 31 December 1999 * Turnover up 31% to Euro 8.35m (1998: Euro 6.35m) * Operating profit at Euro 944,622 (1998:operating loss Euro 735,585) * Increased involvement in Ryedale gas to power project makes major contribution to operating profits * Exploration write off, providing for all costs connected with 1999/2000 drilling programme and deferred costs relating to Block 34 in Pakistan, of Euro 19.7m leads to net loss of Euro 19.28m * Pakistan gas sales commenced Dec '99, major contribution to turnover anticipated in 2000 * Progress made on Cote d'Ivoire project - reserves recently revised upward; first production scheduled for late 2001 * Major expansion in interests in Indian sub-continent achieved: 90% interests in 3 blocks acquired from Okland and agreement signed with Larsen and Toubro * Re-domicile of company in UK expected June 2000 Commenting on the results, Tom Toner, Chairman, said: 'The Company's prospects are currently better than they have ever been; there are substantial production assets, the development of the Sara and Suri gas fields has been completed and production commenced and an exciting set of exploration acreage has been assembled. The company is already seeing the real benefits of its gas-to-power strategy, particularly through its involvement in the Ryedale Project, which bodes well for the future.' For further information please contact: Aidan Heavey Tel: 00 44 20 7976 2600 Chief Executive Graham Martin Tel: 00 44 20 7976 2600 Legal and Commercial Director Judith Parry/Simon Rothschild Tel: 00 44 20 7256 5756 Millham Communications CHAIRMAN'S STATEMENT I am pleased to announce the results for 1999, which show an operating profit of Euro 944,622. This improved performance principally reflects the impact of Tullow's increased involvement in the Ryedale gas to power project in the United Kingdom. Turnover for the year increased 31% from Euro 6,346,495 to Euro 8,354,742 resulting in an increase in operating profits to Euro 944,622 from a loss of Euro 735,585 in 1998. Tullow expects substantial increases in turnover over the next few years. Sales of gas in Pakistan commenced late in the year and had only a minimal impact in 1999, however, is having a major effect on turnover and operating profit in the current year. During the period the Company made a provision for all costs connected with the 1999/2000 drilling programme in Bangladesh and Senegal and the deferred costs in Pakistan in relation to Block 34. The result was an exploration write off of Euro 19,737,425 in 1999 leaving a net loss for the period of Euro 19,276,067. The Group balance sheet was strengthened in December 1999 by the placing and open offer, which raised approximately US$30 million. This leaves Tullow well funded for its key exploration and development programmes in 2000. Great credit is due the management team for bringing the Company to the point where it now has substantial production assets and the Company's prospects are currently better than they have ever been. The Ryedale gas to power project includes three producing gas fields in North Yorkshire and the Knapton Electricity Generating Station. Tullow, which in January 1999 increased its interest in the fields from 13% to 60%, now operates both the fields and the power station. This project was the main contributor to operating profits in 1999. With an expanded workforce in the United Kingdom, Tullow also took over the operatorship of the facilities for the nearby Hatfield Moor gas storage system. On the signing of a gas sales agreement in Pakistan in March 1999, the development of the Sara and Suri gas fields commenced immediately and was completed in November 1999. Production commenced in December and gas is currently being sold at a rate of approximately 38 mmcfd. The production from the two fields is sold to the state-owned Guddu Power Station, which is operated by WAPDA, the Water and Power Development Authority. To date, sales targets have been met and payments received on time. Reservoir pressure testing programmes are currently being conducted with a view to determining further development plans in these fields in the year 2000. The start of production in Pakistan is a major milestone for the Company and is having a significant impact on current cash flow and profitability. The largest project currently being undertaken by the Company is the development of the Espoir oil and gas field offshore Cote d'Ivoire. The reserves have recently been revised upwards by the operator, Ranger Oil, to 93 mmbo and 191 bcf of gas. The gas sales agreement was signed in July 1999 and the award of major development contracts has commenced. First production is currently scheduled to commence in late 2001 and at peak production the field is expected to produce 35 mmcfd and 28,800 bopd. Two major exploration programmes started in 1999 and continued into the early part of 2000: an offshore exploration well in Block 17 in Bangladesh and two onshore wells in Senegal. Whilst the results of these wells were disappointing, the Bangladesh well had gas shows and considerable thicknesses of reservoir sands, providing significant information for further drilling in the block. Unfortunately neither of the wells in Senegal discovered gas in commercial quantities. In addition to these projects Tullow was active in a number of other licence areas. The North Abu Rudeis-1 well, drilled in late 1998 and early 1999, discovered an oil reservoir which is currently being evaluated. Offshore 3D seismic was conducted in India in Block GK-OSJ/1 and an onshore 2D survey is currently under way in Pakistan in the Nawabshah block. Other existing seismic data was reprocessed and preliminary geological and geophysical studies were conducted in India. Exploration efforts will increase over the coming years in line with the expanding production profile. During 1999 Tullow expanded its interests in the Indian subcontinent. The Company acquired a 90% interest in three new blocks from Okland and entered an arrangement with Larsen and Toubro (L&T) under which Tullow acquired L&T's interest in two key onshore exploration blocks in return for a 10% stake in Tullow India. The companies have also agreed to co-operate in upstream and downstream projects. In March 2000 the Company was asked to attend negotiations in Bangladesh concerning the licence for Block 9. Although we were disappointed that the licence was not finalised at this time, discussions continue and we are confident of a favourable outcome. As stated in October, Tullow plans to re-register as a UK company in mid 2000. This process, which will position the Company in a larger market of potential investors, is now at an advanced stage and is likely to take effect in June. To support this change a number of board changes will take effect. The board will reduce in size with the retirement from the board of myself, Matt Maher, Duilio Ciriani and Dan O'Donohoe; Duilio will, however, retain his executive role with responsibility for exploration. From a personal perspective I am delighted to announce that Pat Plunkett will take over as Chairman. Pat, who has made an invaluable contribution to the Board since his appointment in July 1998, was previously Chairman and Managing Director of ABN-AMRO Stockbrokers, Dublin and has considerable experience to bring to the position. I have had a challenging and greatly enjoyable ten years as Chairman of Tullow. I would like to take this opportunity to wish the Company well at an exciting stage in its development and to thank all the staff and the shareholders for their support during my time in the Chair. Thomas Toner GROUP PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro Euro TURNOVER 8,354,742 6,346,495 ------------ ------------ COST OF SALES Operating Costs 5,022,977 3,136,066 Amortisation 1,482,012 3,109,399 ------------ ------------ 6,504,989 6,245,465 ------------ ------------ GROSS PROFIT 1,849,753 101,030 ------------ ------------ ADMINISTRATION AND DEPRECIATION Administration Costs 828,986 735,140 Depreciation 76,145 101,475 ------------ ------------- 905,131 836,615 ------------ ------------ OPERATING PROFIT/(LOSS) 944,622 (735,585) OTHER INCOME 241,269 437,404 INTEREST PAYABLE (724,533) (240,886) -------------- ------------ PROFIT/(LOSS) BEFORE EXPLORATION COSTS 461,358 (539,067) EXPLORATION COSTS (19,737,425) (22,368,736) -------------- ------------ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (19,276,067) (22,907,803) Taxation Credit on Ordinary Activities - 65,172 -------------- ------------ LOSS FOR THE FINANCIAL YEAR (19,276,067) (22,842,631) ============= ============ LOSS PER SHARE - EURO CENTS - Basic (8.05) (9.79) - Diluted (7.55) (9.74) ============= ============ GROUP BALANCE SHEET AS AT 31ST DECEMBER 1999 1999 1998 Euro Euro Fixed Assets Intangible Assets 25,825,659 19,764,159 Tangible Assets 39,581,445 36,582,633 -------------- -------------- 65,407,104 56,346,792 -------------- -------------- Current Assets Debtors 3,234,651 1,837,338 Cash at Bank and in Hand 28,447,061 2,778,367 -------------- -------------- 31,681,712 4,615,705 -------------- -------------- Creditors (Amounts falling due within one year) Bank Loans 2,394,613 2,774,186 Trade and Other Creditors 17,476,300 5,236,533 -------------- -------------- 19,870,913 8,010,719 -------------- -------------- Net Current Assets / (Liabilities) 11,810,799 (3,395,014) -------------- -------------- Total Assets Less Current Liabilities 77,217,903 52,951,778 -------------- -------------- Creditors (Amounts falling due after more than one year) Bank Loans 15,879,413 1,084,629 Provision for Charges 471,483 278,545 -------------- -------------- 16,350,896 1,363,174 -------------- -------------- Net Assets 60,867,007 51,588,604 ============== ============== Capital and Reserves Called Up Share Capital 35,771,950 29,993,411 Share Premium Account 65,272,528 41,031,788 Profit and Loss Account (40,177,471) (19,436,595) -------------- -------------- Shareholders' Funds 60,867,007 51,588,604 ============== ============== GROUP CASH FLOW STATEMENT YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro Euro Net Cash Inflow from Operating Activities 2,213,769 2,581,709 Returns on Investments and Servicing of Finance (1,176,461) (256,070) Capital Expenditure (19,088,265) (20,600,081) ------------- ------------- Net Cash Outflow before Financing (18,050,957) (18,274,442) Financing 29,304,440 325,658 -------------- ------------ Increase/(Decrease) in Cash 11,253,483 (17,948,784) ============= ============ Reconciliation of Net Cash Flow to Movement in Net Debt Increase/(Decrease) in Cash for the year 11,253,483 (17,948,784) Net (Debt)/Funds at 1st January (1,080,448) 16,868,336 -------------- ------------- Net Funds/(Debt) at 31st December 10,173,035 (1,080,448) ============== ============= Analysis of Changes in Net Debt 01.01.99 Cash Flow 31.12.99 Euro Euro Euro Cash at Bank and in Hand 2,778,367 25,668,694 28,447,061 Bank Term Loans Due within one year (2,774,186) 379,573 (2,394,613) Due after one year (1,084,629) (14,794,784) (15,879,413) -------------- -------------- -------------- (1,080,448) 11,253,483 10,173,035 ============= ============= ============= STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro Euro Loss for the Year (19,276,067) (22,842,631) Currency Translation Adjustments on Foreign Currency Net Investments (749,970) (304,729) --------------- --------------- Total Recognised Losses (20,026,037) (23,147,360) =============== =============== MOVEMENTS ON PROFIT AND LOSS ACCOUNT YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro Euro At 1st January (19,436,595) 3,710,765 Loss for the Year (19,276,067) (22,842,631) Currency Translation Adjustments (749,970) (304,729) Re-denomination and re-nominalisation of ordinary shares (714,839) - -------------- ------------- At 31st December (40,177,471) (19,436,595) ============== ============= RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS YEAR ENDED 31ST DECEMBER 1999 1999 1998 Euro Euro Loss for the Year (19,276,067) (22,842,631) Currency Translation Adjustments (749,970) (304,729) Shares Issued 5,063,700 879,948 Share Premium on Shares Issued 24,240,740 8,362,793 -------------- -------------- Net Increase/(Decrease) in Shareholders' Funds 9,278,403 (13,904,619) Shareholders' Funds - At 1st January 51,588,604 65,493,223 -------------- -------------- Shareholders' Funds - At 31st December 60,867,007 51,588,604 ============== ============== Tullow Oil plc Notes to the Results Year Ended 31st December 1999 Note 1. Loss Per Ordinary Share The calculation of basic and diluted loss per ordinary share is as follows: Numerator 1999 1998 Euro '000 Euro '000 For basic and diluted loss per share Loss After Tax (19,276) (22,843) ===== ===== Denominator For basic loss per share Millions Millions Weighted Average Number of Shares in Issue for the Year 239 233 Effect of Dilutive Potential Ordinary Shares (Share Options) 16 10 ------ ------ Denominator for Diluted Loss per Share 255 243 ==== ==== Euro Cents Euro Cents Basic Loss per Ordinary Share (8.05) (9.79) Diluted Loss per Ordinary Share (7.55) (9.74) ===== ===== Note 2. Profit and Loss Account 1999 1998 Euro Euro At 1st January (19,436,595) 3,710,765 Loss for Year (19,276,067) (22,842,631) Currency Translation Adjustments (749,970) (304,729) Re-denomination and re-nominalisation of share capital (714,839) - --------------- ------------- At 31st December (40,177,471) (19,436,595) ======== ========= Note 3. Proven and Probable Reserves Summary EUROPE AFRICA ASIA TOTAL Oil Gas Oil Gas Oil Gas Oil Gas Petroleum Mmbbl Bcf Mmbbl Bcf Mmbbl Bcf Mmbbl Bcf mmboe 1st Jan 1999 0.55 3.59 19.20 49.54 0.70 259.58 20.45 312.71 72.56 Revisions (0.39) 13.14 14.11 (8.57)(0.70) (44.17) 13.02 (39.60) 6.4 Production (0.04) (1.84) - (0.23) - (0.34) (0.04) (2.41) (0.41) 31st Dec 1999 0.12 14.89 33.31 40.74 - 215.07 33.43 270.70 78.55 Note 4. Dividends No dividend is proposed (1998:nil). Note 5. 1999 Annual Report and Accounts The document will be posted to all shareholders in due course.

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