Interim Results

Tullow Oil PLC
13 September 2004





13th September 2004



                    Tullow Oil plc ('Tullow' or 'the Group')
                  Unaudited Interim Results to 30th June 2004


Tullow Oil plc announces its Interim Results for the period ended 30th June
2004.


Tullow Oil is an independent oil company with interests in the UK, Africa and
South Asia. During the period, Tullow completed the acquisition of Energy Africa
Limited and 50% of Energy Africa Gabon for a total headline consideration of
$570 million.


The results of Energy Africa have been consolidated with effect from 28th May
2004 and accordingly one month of revenue has been reflected in the Interim
Results.


Highlights



Strong First Half Performance

  • Turnover increases by 16% to £76.5 million (2003 - £66.0 m)
  • Operating Profit before Exploration Activities increased by 32% to £30.9m
    (2003 - £23.4m)
  • Operating Profit increases by 51% to £26.5m (2003 - £17.6m)
  • Operating Cashflow of £57.5m (2003 - £46.1m)
  • Net Debt at 30th June £85.8m (2003 - £30.6m )
  • Interim Dividend of 0.5p/share proposed (2003 - nil)
  • Current Group production over 53,000 boepd
  • Basic EPS of 2.37p/share (2003 - 1.83 p/share)



Acquisition of Energy Africa

  • Transaction became wholly unconditional on 28th May
  • $300 million acquisition banking facility signed April 2004
  • Placing of 130 million new Tullow shares at 95p oversubscribed
  • Integration process well advanced



Successful Exploration

  • UK North Sea: Monroe exploration well discovered gas
  • Bangladesh: Lalmai well discovered gas, Bangora awaits testing
  • Uganda: Turaco well encountered hydrocarbons
  • Gabon: successful well in Etame permit
  • Congo: MOBIM-1 well enhances Moho-Bilondo commerciality



Active Development and Exploration Programme

  • Congo (Brazzaville): M'Boundi development continuing to add value
  • UK North Sea: Horne and Wren development under way, first gas early 2005
  • Equatorial Guinea: Northern Block G development approved
  • Namibia: Kudu Joint Development Agreement signed
  • Cote d'Ivoire: West Espoir facilities being fabricated
  • Active exploration programme - 9 wells to be spudded by year end



Board and Senior Management Changes

  • David Bamford appointed non-executive Director in July
  • Adrian Nel appointed Exploration Director
  • Paul McDade appointed Chief Operating Officer
  • John Lander and Eskandar Maleki retired from Board in April 2004






Commenting on the results, Tullow Chairman, Pat Plunkett, said:

'The acquisition of Energy Africa is without question the most important event
in the Company's history.  Progress in the three months since completion has
been considerable, with interests increased in selected acreage, development
plans for proven discoveries advanced and a series of positive drilling results
achieved. While our immediate outlook is well supported by favourable oil and
gas prices, the Energy Africa deal has transformed Tullow and positions the
Group to achieve substantial growth in some of the world's most prospective
hydrocarbon provinces.'






For Further Information Contact:


Tullow Oil plc ([phone])
Aidan Heavey
Tom Hickey


Citigate Dewe Rogerson ([phone])
Martin Jackson
Alexandra Scrimgeour
Kate Delahunty


Murray Consultants ([phone])
Joe Murray





Chairman's Statement



The first half of 2004 saw Tullow move to a new level. The acquisition of Energy
Africa is without question the most important event in the Company's history.
The period also saw record levels of activity and performance across the
Company's operations. Drilling activity, acreage enhancement, project
development and financial performance were all substantially ahead of previous
years.



The integration of the Energy Africa business and staff into the Tullow Group is
now well advanced. Following completion of the transaction, the financial
results of Energy Africa have been reflected in the Tullow accounts with effect
from 28th May 2004.


Group Performance


Turnover and Profitability


Turnover increased by 16% to £76.5 million (2003 - £66.0 million).  Tullow's
Southern North Sea gas interests remained the principal contributor, providing
68% of Revenue (2003 - 87%).  The balance of turnover was provided mostly from
the Espoir field in Cote d'Ivoire and the inclusion of one month of revenue from
the acquired Energy Africa interests.


The increases in turnover, combined with a significantly reduced per unit
Depreciation, Depletion and Amortisation charge on UK assets from existing
operations, has led to a 32% increase in Operating Profit before Exploration
Activities, which reached £30.9 million (2003 - £23.4 million).


Reserves


At 30th June 2004 the Group had Proven and Probable Reserves of 171 mmboe (2003
- 70mmboe). The next independent review of Group Reserves will be undertaken at
year end and will include a full assessment of all current appraisal and
development projects.


Production


Tullow is currently producing approximately 53,000 boepd, of which approximately
29,000 boepd arises from the Group's interests in Africa. A number of
initiatives are in place to enhance production from these fields, most notably
Espoir, Ceiba, M'Boundi and the Gabon portfolio.


Development


The first half of 2004 was particularly eventful on the development front. In
the UK, the operated Horne and Wren project is at an advanced stage and should
commence production in the second quarter of 2005, while plans to tie in the
Monroe discovery are also progressing. In Africa, the West Espoir development in
Cote d'Ivoire received project sanction, the Northern Block G (NBG) project in
Equatorial Guinea received Government approval and the M'Boundi project in Congo
continued to be a source of positive drilling news. In Asia, discussions with
the Government of Pakistan on the revised Chachar development plan are at an
advanced stage.


Plans are also ongoing for further developments in Gabon, Congo, Namibia,
Bangladesh and the UK.

Exploration


The Company participated in eight exploration wells in the six-month period, of
which five were discoveries leading to further testing and/or appraisal. Our
exploration programme is continuing, with over 10 wells either in progress or
due to be drilled before year end


Group Strategy


The assimilation of Energy Africa into the Tullow Group has created a balanced
group with an exciting portfolio of opportunities. Following the acquisition,
the Board has reviewed the strategic direction of the Group with a view to
maintaining the growth shown in recent years and to maximise shareholder return,
through a combination of the following:


•        Production-led exploration and reserve enhancement


Our priority continues to be the optimisation of the performance and reserve
potential of the enlarged Group's producing interests. Recent exploration and
development successes in Gabon and Congo in particular are evidence of the rich
potential of these assets.


•        High impact exploration


We will maintain an active portfolio of material exploration prospects with
significant equity participation. We will utilise our collective knowledge and
experience, in West Africa in particular, to continue to gain access to new
prospects and projects.


•        Acquisitions


Given the increased scale of the Group, and our future targets and ambitions,
growth objectives are unlikely to be satisfied through organic means alone. We
will therefore continue to follow a policy of focused acquisition within core
areas.



Board and Senior Management


In July, David Bamford was appointed to the Tullow Board as an independent
non-executive Director. David has over 23 years exploration experience with BP,
most recently as Vice President, Exploration, directing BP's global exploration
programme.


The Energy Africa transaction has necessitated a number of changes to the
management and organisation of the Tullow Group.  In this regard, I am delighted
to announce the appointment of Adrian Nel to the Board of Tullow in the role of
Exploration Director. Adrian has been Technical Director of Energy Africa since
its formation in 1996 and was previously General Manager of Engen's oil and gas
business. He has been active in exploration in both technical and managerial
roles for over 30 years and holds degrees in geology and geochemistry.


I am also pleased to announce the appointment of Paul McDade as Chief Operating
Officer. Paul's role will principally focus on optimising the performance of the
Group's producing interests worldwide. Paul joined Tullow in 2001 and has most
recently been General Manager of the Group's UK operations. Paul has significant
production and development experience in both the UKCS and internationally.


John Lander retired from the Board in April, however he will continue to
undertake consulting projects with Tullow in the future. Also in April, Eskandar
Maleki retired from his position as non-executive Director.


Dividend


Tullow's policy is to maintain a progressive dividend policy, which is
sustainable in the context of the Group's exploration and development
expenditure obligations and the overall resource price environment. Accordingly,
the Board has recommended an Interim Dividend of 0.5 pence/share which will be
paid on 9th November to shareholders on the register on 8th October 2004.


Outlook


The remainder of 2004 and 2005 will see significant investment in development
and appraisal projects, which we are confident will enable Tullow to demonstrate
a rising production profile over the coming years. Our immediate outlook is well
supported by favourable oil and gas prices, financial flexibility and strong
production which we anticipate will be in the order of 53-54,000 boepd for the
second half of 2004.


Conclusion


The Energy Africa team is now an integral part of the Tullow Group and I would
like to thank all our staff, in both businesses, for their part in ensuring a
smooth and positive integration. Progress in the three months since completion
has been considerable, with interests increased in selected acreage, development
plans for proven discoveries advanced and a series of positive drilling results
achieved. I also thank shareholders for their continued commitment and in
particular their enthusiastic support for the recent acquisition.



Pat Plunkett
Chairman
13th September 2004




Chief Executive's Review



The most significant event during the period was the acquisition of Energy
Africa, which was completed in late May.


Acquisition of Energy Africa Limited


In May, Tullow made an offer for the entire issued share capital of Energy
Africa for a headline consideration of US$500 million (approximately £280
million). In conjunction with this, Tullow acquired 50% of Energy Africa Gabon
Holdings Ltd (EAGHL) for a consideration of $70 million, thereby increasing the
Group's stake in EAGHL to 100%.


Energy Africa is a very successful exploration and production company based in
South Africa, with a major presence in the key African basins. The company has
an excellent technical team based in Cape Town and a substantial geological
database on Africa and we are delighted that Adrian Nel, the head of that team,
has agreed to join the Tullow Board as Exploration Director.


The benefits of the acquisition and the Company's focus on its core areas have
already started to show results. In the six-month period we have participated in
five successful exploration wells, commenced three major developments and
carried out a number of reserve enhancement projects which have resulted in
Tullow's net African production increasing from c.25,000 boepd on 1st January
2004 (pro-forma)  to approximately 29,000 boepd at present.  In addition, we
have signed a Joint Development Agreement for the exploitation of the Kudu gas
field (Tullow 90%) offshore Namibia.


Operating Performance


UK Core Area


Tullow continues to develop and extend its presence in the Southern Gas Basin.
During the period Tullow increased its interests in the Orwell gas field and the
Blythe discovery to 100% and in the Fizzy discovery to 75%, participated in the
successful Monroe exploration well (Tullow 15%) and progressed the operated
Horne and Wren development (Tullow 50%) to the point of project sanction. More
recently, negotiations have concluded in relation to the transportation and
processing of gas from ExxonMobil's Arthur development through the Thames
infrastructure (Tullow 66.67%). Further third party business in this area is
being actively sought, while a feasibility study in relation to the use of the
Hewett Reservoir as a major gas storage facility has also been initiated. When
Horne and Wren come on stream in 2005, Tullow will be operator of over half of
its daily SNS production, which is at present in the range of 110-115 mmscfd. It
is our intention, where possible, to manage this production to benefit from
periods of higher gas demand and pricing.


Tullow maintains an active exploration programme in the SNS; the P4 (Zeta) well,
adjacent to the planned Horne/Wren infrastructure, is currently in progress,
while the West Boulton well in the CMS area (Tullow 30%) has also been approved
for a 2004 spud.


Tullow, through its acquisition of Energy Africa, also now holds interests in
the producing Alba (Tullow 8%) and Caledonia (Tullow 10%) fields, which are
currently producing 6,000 bopd net to Tullow. The Alba Extreme South development
is currently in the final stages of completion, with production imminent; this
project will have peak production of over 35,000 bopd (gross) and enhance
recoverable reserves by over 15 mmbo (gross).



Africa Core Area - Producing Regions


Cote d'Ivoire: The Espoir field (Tullow 21.33%) continues to produce steadily at
approximately 20,000 boepd (gross). During the period the West Espoir
development received project sanction and development contracts were signed and
first oil is now scheduled for Q2 2006. The Joint Venture agreed an incremental
infill drilling programme on East Espoir to enhance existing production levels,
with drilling planned for early 2005.


The Acajou North exploration well (Tullow 24%) will spud in October. Following
this well, development options for the existing Acajou-1 discovery will be
evaluated.


Two new operated exploration licences were signed in May 2004. Exploratory
seismic surveys will be conducted over Blocks CI-107 and CI-108 (Tullow 100%)
during the next year.


Equatorial Guinea: The Ceiba field (Tullow 15%) currently produces approximately
40,000 bopd (gross) following a water injection programme to re-pressurise the
reservoir. Development drilling continued during the period with 1 injector well
and 2 producer wells completed. The Northern Block G Development (Tullow 15%)
project received Government approval in August and is scheduled to come on
stream in early 2007 with gross production expected to reach approximately
60,000 bopd (c.8,500 bopd net to Tullow).


An additional exploration well on the Akom North target in Block G will be
drilled in the final quarter of this year. If successful this prospect, along
with a number of other undeveloped discoveries in the Block, could be
incorporated into the ongoing Northern Block G development.


Gabon: Tullow has identified Gabon as a region where significant organic and
acquisition-based opportunities exist. The Group participates in 6 producing
fields in Gabon, which are currently producing in excess of 15,500 bopd net to
Tullow.


In recent months the Group has also participated in a number of successful
appraisal and stepout exploration wells, most notably on the Etame (Tullow 7.5%)
and Niungo (Tullow 40%) fields. A successful exploration well Avouma-1 was
drilled on the Etame permit, where Tullow has an option to participate in the
event of a commercial development. Tullow also recently agreed to acquire a 15%
working interest in the Gryphon Marin exploration permit, where an extensive 3D
survey will shortly commence.


The Topaze-1 well on the Kiarsseny Marin licence (Tullow 45%) was drilled in
February 2004, but did not encounter commercial quantities of hydrocarbons. Data
from this well is currently being integrated with Tullow's enlarged Gabon
database to determine future drilling plans for the licence.


Congo (Brazzaville): In February 2004, Energy Africa acquired an 11% stake in
the M'Boundi Field for an initial consideration of $50 million. Recent
announcements by the operator in relation to additional production and reserves
show that this has already proved to be a very worthwhile transaction.  The
field is currently producing approximately 2,500 bopd net to Tullow and
development work is continuing with 3 rigs currently active.


Elsewhere in Congo, the N'Kossa project (Tullow 4%) is currently producing 1,400
bopd (net), while the recent MOBIM-1 exploration well has discovered significant
additional reserves, which have further enhanced the commercial viability of
the nearby Moho-Bilondo complex (Tullow 4%), where a formal development decision
is anticipated in early 2005.


Namibia: Agreements were signed in early July between Energy Africa, NamPower
and Eskom in relation to the development of the Kudu gas to power project
(Tullow 90%). Kudu is a project of critical strategic importance for Namibia and
the Southern African region. Financial advisers have recently been appointed by
the joint venture and we look forward to substantial progress over the coming
months.



Africa - Exploration Interests


Uganda: The Turaco-2 well in Block 3 (Tullow 50%) encountered a number of
hydrocarbon-bearing zones. However due to technical difficulties the testing
programme could not be completed. Turaco-3 will be drilled in October to further
investigate these zones with an upgraded rig.


In recent months Tullow has signed two further licences in Uganda and completed
a seismic programme on Block 2 (Tullow 50%) to evaluate a number of sizeable
structures. This Block will be the subject of further exploration work during
2005.


Egypt: The Amethyst-1 well on the Matruh Onshore and Offshore licence (Tullow
20%) was spudded on 19th August and is currently in progress.


Mauritania:  The Dorade-1 well, to test a sizeable prospect on Block 2 (Tullow
20%), has recently commenced.  This well, which is part of a wider regional
drilling programme being conducted by the operator, will be drilled in two
stages over the coming month. A further well, on the Petrel prospect on Block 1
(Tullow 32%), is scheduled for early 2005.


Morocco: The Rak-1 well (Tullow 10%) in the Cap Draa offshore licence was
completed in July but failed to encounter hydrocarbons. The well has
consequently been plugged and abandoned.


Tullow and partners are currently evaluating the results of the well to assess
its impact on other prospects and licences in the region.


South Asia Core Area


Pakistan:The Sara and Suri wells (Tullow 38.18%) produced at an average rate of
6 mmscfd net to Tullow during the period.  A 3D seismic programme to identify
additional development drilling targets in the region has recently been
completed and a prospect will be selected for a well in late 2004.


Elsewhere in Pakistan, discussions are at an advanced stage with the Government
for the initiation of the Chachar development (Tullow 75%). The schedule is
currently being finalised with a view to achieving first production in early
2006 at a rate of 30 mmscfd (gross).


Bangladesh: The three well drilling programme in Bangladesh Block 9 (Tullow 30%)
started in December 2003. Although the first well, Rasulpur, was not successful,
the second well, Lalmai, tested gas and is suspended for future appraisal and
likely development. The third well, Bangora, is currently suspended due to
abnormal seasonal flooding and, while encouraging gas shows have been
encountered, the well has not yet been tested. Plans are well advanced to resume
operations at Bangora before the end of September.


India: Existing seismic and well data for Block CB-ON-1 (Tullow 50%) are being
evaluated with a view to conducting a seismic acquisition programme in 2005.


Financial Review


Tullow maintained strong financial performance during the period, bolstered by
the inclusion of results of Energy Africa following completion of the
acquisition in late May.


Turnover has thus increased by 16% to £76.5 million (2003 - £66.0 million),
while Operating profit before Exploration Activities has increased by 32% to
£30.9 million (2003 - £23.4 million).


Due to the timing of the Energy Africa acquisition, the principal contributor to
turnover for the period continues to be Tullow's Southern North Sea gas
interests, which represented 68% of revenue (2003 - 87%).  During the period,
SNS gas sales averaged 110 mmscfd at an average price of 23.0p/therm (2003 -
20.8p/therm), while tariff revenue reached £5.7 million (2003 - £5.6million).
The balance of turnover from existing activities was for the most part
represented by the Espoir field in Cote d'Ivoire which averaged 3,800 boepd net
during the first half (2003 - 3,100 boepd). This project also benefited from the
continued strength in global oil prices, with realisations averaging $34.2
(pre-hedging)/barrel  (2003 - $26.4/barrel).


Owing to revised crude oil lifting arrangements among the Espoir partners, at
30th June Tullow was in a technical overlift position in respect of 86,342
barrels, although this has since entirely reversed. Under the SORP, any overlift
or underlift position must be valued at market value and as adjusted through
Cost of Sales. Consequently a charge of £1.5million has been included in Cost of
Sales representing the market value of the overlifted oil at 30th June. The
unpredictability of lifting schedules also impacted on Energy Africa results for
the month of June, with no liftings from the Tchatamba and Etame fields in Gabon
or the Ceiba field in Equatorial Guinea. This impacted adversely on Energy
Africa turnover for the month of June, although Cost of Sales for the month
benefits from a related deduction of £2.7 million reflecting the market value of
the resulting underlift. Energy Africa's operations in Gabon are a combination
of PSC interests (Production sharing contracts where a proportion of the
production is shared with the host Government instead of tax) and corporation
tax paying interests. As both the Tchatamba (Tullow 25%) and Etame interests are
structured as PSCs, the absence of turnover in June resulted in a
disproportionate effective charge to taxation within the Energy Africa interests
for that month only.


Consolidated Group Operating Costs of £4.00/bbl (2003 - £4.22/bbl) reflect the
continued shift of UK production to the lower operating cost CMS area, which
represented 49% of UK Production during the period (2003 - 46%), and the lower
cash operating cost of the Energy Africa portfolio.


The Consolidated Group Depletion and Amortisation charge of £4.31/bbl (2003 -
£4.40/bbl) principally reflects the inclusion of Horne and Wren reserves and
costs in the calculation in respect of UK interests.  Looking forward, the fair
value allocation exercise in respect of Energy Africa, which is outlined in more
detail below, is also expected to have a material impact on the Group per unit
charge.


Exploration Costs


Tullow participated in a total of 8 exploration wells during the period of which
5 encountered hydrocarbons that justify further appraisal or immediate
development. Exploration costs written off during the period of £4.4 million
(2003 - £5.8million) are mainly associated with the unsuccessful well in
Bangladesh (£1.7 million), the uncarried portions of the Topaze-1 well in Gabon
and Rak-1 well in Morocco (£1.5million) and various pre-licence and new venture
costs (£1.0 million).


The second half of 2004 will see an accelerated drilling programme on the
Group's interests; under Tullow's successful efforts accounting policy any costs
associated with unsuccessful exploration will be written off in full.



Energy Africa- Completion of acquisition and Fair Value allocation exercise


Tullow's proposed Offer for Energy Africa was announced on 4th May 2004 and
shareholders approved the offer and the related issue of new Tullow shares at an
EGM held on 27th May.  Energy Africa shareholders could elect to receive cash or
Tullow Shares; the cash consideration under the Offer was funded partly by new
debt facilities and partly by the issue of 130,000,000 new Tullow shares at a
price of 95 pence per share. An additional 132,973,351 shares in Tullow were
issued to electing Energy Africa and EAHGL shareholders.


Under FRS 7, Tullow is required to undertake a fair value exercise to determine
the values to be attributed to the acquired assets within the Tullow Balance
Sheet. While the value is chiefly determined by the cash value of the
consideration paid by Tullow and Energy Africa's aggregate net assets/
liabilities, excluding oil and gas assets, certain other factors, principally
relating to the mark to market value of Energy Africa's outstanding hedge
contracts and the market value of the new Tullow shares issued, must also be
taken into account.


The fair value allocated to the acquisition of Energy Africa may be summarised
as follows:

                                                                           $ million         £ million
                 Book value of oil and gas interests                           346.5             189.0
                 Market value of hedge contracts                              (51.8)            (28.3)
                 Other net liabilities                                        (82.5)            (45.0)
                 Fair value adjustment                                         389.0             212.2
                 Total acquisition cost                                        601.2             327.9



Because the majority of Energy Africa's assets comprise oil and gas interests,
the entire allocation of fair value, as calculated above, is therefore allocated
to these assets and is included under the tangible and intangible assets
heading. In common with existing Tullow assets, the costs capitalised in respect
of producing fields will be amortised to the profit and loss account using the
unit of production method (on an entitlement basis) as the related reserves are
produced or, where they relate to exploration assets, capitalised or written off
in accordance with the Group's successful efforts accounting policy. Based on
the fair value exercise and current production and reserves mix the total
average depreciation, depletion and amortisation rate for Energy Africa assets
is approximately $9.75 - $10/barrel.


Taxation


The charge to tax of £12.6 million (2003 - £8.2 million) is principally
associated with the Group's North Sea Activities. In particular the strong
reserve and production performance of the Murdoch and Murdoch K fields in the
CMS area, coupled with the recent material increases in UK Gas pricing has led
to an increase in the Group's PRT charge to £5.5 million (2003 - £3.3 million).
In addition, the majority of Energy Africa assets are PSCs and, as explained
above, the effect of PSCs can result in a disproportionate effective tax rate.
Because of lower PSC revenues due to no liftings occurring for the Tchatamba,
Etame and Ceiba fields during June as well as exploration expenses on PSC
licences, an increased effective tax rate occurs.


Cash Flow and Financing Activities


Tullow recorded an Operating Cash Flow of £57.5 million during the period (2003
- £46.2million) driven principally by stronger oil and gas pricing. Capital
Expenditure during the period amounted to £28.0 million (2003 - £23.3 million),
largely reflecting costs associated with exploration in Bangladesh and the UK
and Development costs associated with the CMS III and M'Boundi projects.


Repayments totalling £33.3 million (2003 - £7.8 million) were also made under
Group Banking Facilities, exclusive of the funding associated with the
Acquisition of Energy Africa.


During the period the Group concluded a $300 million Acquisition Bridge
Financing Facility, arranged by ABN AMRO and BNP Paribas. This facility was
principally used to finance the cash component of the consideration paid to
acquire Energy Africa and to replace existing debt within Energy Africa. Total
drawings on the facility at 30th June amounted to $237 million.


Hedging and Risk Management


Tullow's policy is to mitigate its exposure to oil and gas price risks for a
portion of its production using a range of financial instruments such as fixed
price swaps, participating swaps, zero cost collars, and option structures.
Tullow also hedges price risk through forward sale agreements for physical
product at fixed prices. The main objectives of the hedging programme are to
reduce exposure to price volatility, and particularly downside risk, and to
provide substantial assurance of appropriate levels of liquidity for the Group's
various investment opportunities.


Historically such hedging has principally been effected by way of physical
forward sale agreements, with some limited utilisation of financial instruments.
However in recognition of the continued strength in oil and gas pricing, during
2004 the Group has sought to increase utilisation of collar and other
participating structures to retain exposure to higher prices should they occur.



At 30th June, the Group's hedge position may be summarised as follows:




Oil Hedges                                    2H 2004             2005         2006
         Volume - bopd                         17,000           10,500        7,000
         Average Price* - $/bbl                 $31.2            $33.8        $31.1
         Downside Price** - $/bbl               $26.7            $28.2        $26.4

Gas Hedges
         Volume - mmscfd                           61               30            -
         Average Price* - p/therm                23.1             26.5            -

* Average hedge prices are based on market prices as at 8th September.
** Downside hedge prices reflect floor price protection.




Conclusion


The year to date has been extremely active for Tullow and the entire independent
oil and gas sector. The acquisition of Energy Africa has provided Tullow with an
outstanding portfolio of assets and an excellent team which superbly complements
our existing business. I look forward to the coming year with confidence and
optimism.



Aidan Heavey
Chief Executive
13th September 2003



Tullow Oil plc
Consolidated Profit and Loss Account
Six Months Ended 30th June 2004
                                                                 Existing
                                                 Acquisitions  Operations       Total
                                                     6 Months    6 Months    6 Months      6 Months      12 Months
                                                     30.06.04    30.06.04    30.06.04      30.06.03       31.12.03
                                                    Unaudited   Unaudited   Unaudited     Unaudited        Audited
                                                                                           Restated       Restated
                                                     Stg£'000    Stg£'000    Stg£'000      Stg£'000       Stg£'000
                                                        9,965      66,568      76,533        65,950        129,625
Turnover


Cost of Sales

Operating Costs                                           169    (20,452)    (20,283)      (20,200)       (42,621)
Depletion and Amortisation                            (3,884)    (17,969)    (21,853)      (21,078)       (39,628)
                                                      (3,715)    (38,421)    (42,136)      (41,278)       (82,249)

Gross Profit                                            6,250      28,147      34,397        24,672         47,376


Administrative Expenses                               (1,222)     (2,016)     (3,238)       (1,121)        (2,727)
Depreciation                                             (42)       (176)       (218)         (159)          (332)
                                                      (1,264)     (2,192)    (3,456)        (1,280)        (3,059)

Operating Profit Before Exploration Activities          4,986      25,955      30,941        23,392         44,317

Exploration Costs Written Off                         (1,072)     (3,358)     (4,430)       (5,815)       (12,772)

Operating Profit                                        3,914      22,597      26,511        17,577         31,545
Profit/(Loss) on Disposal of Producing Assets                                      -            452          (952)
Profit on Ordinary Activities Before Interest                                  26,511        18,029         30,593


Interest Receivable & Similar Income                                            1,407         1,053          2,016
Interest Payable & Similar Charges                                            (5,279)       (4,075)        (8,730)

Profit on Ordinary Activities before Taxation                                  22,639        15,007         23,879


Taxation on Profit on Ordinary Activities
Current and Deferred Petroleum Revenue Tax                                    (5,460)       (3,300)        (9,025)
Current and Deferred Corporation Tax                                          (7,177)       (4,930)        (3,933)
                                                                             (12,637)       (8,230)       (12,958)

Profit for the Financial Period                                                10,002         6,777         10,921

Dividends                                                                           -             -        (3,782)

Profit Retained for the Financial Period                                       10,002         6,777          7,139


                                                                                Stg p         Stg p          Stg p
Earnings Per Share (Note 3)
 - Basic                                                                         2.37          1.83           2.92
 - Diluted                                                                       2.34          1.81           2.90


Tullow Oil plc
Consolidated Balance Sheet
As at 30th June 2004
                                                                              30.06.04       30.06.03     31.12.03
                                                                             Unaudited      Unaudited      Audited
                                                                              Stg£'000       Stg£'000     Stg£'000

FIXED ASSETS
Intangible Assets                                                              121,199         45,578       48,434
Tangible Assets                                                                481,366        156,079      144,333
Investments                                                                        496            371          496

                                                                               603,061        202,028      193,263

CURRENT ASSETS
Stocks                                                                           1,453          1,347          437
Debtors                                                                         56,455         18,271       26,115
Cash at Bank and in Hand                                                       113,698         66,143       66,686

                                                                               171,606         85,761       93,238

CREDITORS - Amounts falling due within one year
Bank Loans and Overdrafts                                                     (25,856)       (30,741)     (27,544)
Trade and Other Creditors                                                     (90,625)       (31,866)     (33,173)

                                                                             (116,481)       (62,607)     (60,717)

NET CURRENT ASSETS                                                              55,125         23,154       32,521

TOTAL ASSETS LESS CURRENT LIABILITIES                                          658,186        225,182      225,784

CREDITORS - Amounts falling due after more than one year
Bank Loans                                                                   (169,296)       (63,425)     (59,458)

PROVISIONS FOR LIABILITIES AND CHARGES
Decommissioning Costs                                                         (80,442)       (41,082)     (47,524)
Deferred Taxation                                                             (27,482)        (1,825)      (2,881)

NET ASSETS                                                                     380,966        118,850      115,921


CAPITAL AND RESERVES
Called Up Equity Share Capital                                                  64,156         37,774       37,784
Share Premium Account                                                          120,230         14,245       14,198
Merger Reserve                                                                 178,952         56,617       56,617
Foreign Currency Translation Reserve                                          (10,720)              -     (11,024)
Profit and Loss Account                                                         28,348         10,214       18,346

EQUITY SHAREHOLDERS' FUNDS                                                     380,966        118,850      115,921




Tullow Oil plc
Consolidated Cash Flow Statement
Six Months Ended 30th June 2004
                                                                            6 Months       6 Months       12 Months
                                                                            30.06.04       30.06.03        31.12.03
                                                                           Unaudited      Unaudited         Audited
                                                                            Stg£'000       Stg£'000        Stg£'000

Reconciliation of Operating Profit to
Net Cash Inflow from Operating Activities (Restated)
Operating Profit for the Period (Restated)                                    26,511         17,577          31,545
Depletion and Amortisation                                                    21,853         21,078          39,628
Depreciation of Other Fixed Assets                                               218            159             332
Exploration Costs                                                              4,430          5,815          12,772
Hedging Contracts                                                            (2,066)              -               -
Movement in Operating Debtors                                                  2,425          5,021         (1,992)
Movement in Operating Creditors                                                5,994        (2,111)           3,589
Movement in Stocks                                                           (1,591)        (1,347)           (437)
Translation Adjustment                                                         (248)             20           (477)
Net Cash Inflow from Operating Activities                                     57,526         46,212          84,960

Returns on Investments and Servicing of Finance                              (4,998)        (1,995)         (7,533)

Taxation                                                                     (6,206)        (5,614)        (12,261)

Acquisitions                                                               (166,384)              -               -

Capital Expenditure and Financial Investment                                (27,966)       (23,254)        (42,044)

Net Cash (Outflow)/Inflow before Management of Liquid Resources
 and Financing                                                             (148,028)         15,349          23,122

Management of Liquid Resources - Term Deposits                               (3,036)          4,446           4,143

Financing                                                                    188,602          1,768         (6,399)

Increase in Cash                                                              37,538         21,563          20,866


Reconciliation of Net Cash Flow to Movement in Net Debt
Increase in Cash for Period                                                   37,538         21,563          20,866
Cash (Inflow)/Outflow from (Increase)/Decrease in Debt                     (112,015)          7,806          14,802
Cash Inflows/(Outflows) from Increase/(Decrease) in Liquid Resources           3,036        (4,446)         (4,143)

Change in Net Debt arising from Cashflows                                   (71,441)         24,923          31,525
Translation Difference                                                           466            445           1,507
Net Debt at Beginning of Period                                             (62,368)       (95,400)        (95,400)

Net Debt at End of Period                                                  (133,343)       (70,032)        (62,368)





Tullow Oil plc


Consolidated Cash Flow Statement
Six Months Ended 30th June 2004



Analysis of Changes in Net Debt


                                                                01.01.04      CashFlow    Exchange      30.06.04
                                                                Stg£'000      Stg£'000    Stg£'000      Stg£'000


Cash at Bank and in Hand                                          24,618        36,805       (138)        61,285
Overdrafts                                                       (1,055)           733          55         (267)
                                                                  23,563        37,538        (83)        61,018

Debt Due Within one Year                                        (26,769)           999         180      (25,590)
Debt Due After One Year                                         (61,090)     (113,014)         471     (173,633)
                                                                (87,859)     (112,015)         651     (199,223)

Term Deposits                                                      1,928         3,036       (102)         4,862

Net Debt                                                        (62,368)      (71,441)         466     (133,343)


Cash at Bank and in Hand at 30th June 2004 per the Group Balance Sheet includes
£61,284,887 of Cash, £4,862,280 of Term Deposits, £36,947,171 on fixed deposit
in support of future decommissioning costs and £10,603,518 on fixed term deposit
under the terms of the debt facility.


Cash at Bank and in Hand at 31st December 2003 per the Group Balance Sheet
includes £24,617,585 of Cash, £1,927,857 of Term Deposits, £29,750,854 on fixed
deposit in support of future decommissioning costs and £10,389,324 on fixed term
deposit under the terms of the debt facility.


Bank Loans due after one year are stated in the Group Balance Sheet net of
related unamortised arrangement fees.



Tullow Oil plc
Notes to the Interim Financial Statements



1.        Accounting Policies and Presentation of Financial Information


The financial information presented above does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985. The financial
information for the year ended 31st December 2003 has been derived from the full
statutory accounts for that year. The statutory accounts, upon which the
auditors issued an unqualified opinion, were delivered to the Registrar of
Companies.


The Group has revised its previous accounting policy for Taxation and Turnover
in relation to notional Cote d'Ivoire corporation tax levied under the terms of
the Espoir field Production Sharing Contract (PSC) and deemed settled out of the
Cote d'Ivoire state's share of Espoir production.  Previously, the amount of
Cote d'Ivoire corporation tax settled out of production was treated as Taxation
and also included in Turnover.  Under the revised treatment, this component of
state profit oil is not included in Turnover and consequently is not included
with other taxes, principally cash settled, under the Taxation heading.
Turnover and Taxation for 2003 have been restated to comply with the revised
accounting policy and have been reduced by £2,739,830 and £1,491,880 for the
full year and the half year respectively, and Turnover and Taxation for the six
months ended 30th June 2004 have each been reduced by £1,094,088.  There has
been no effect on net assets or net profit in any period as a result of the
change.


Lifting or offtake arrangements for oil and gas produced in certain of the
Group's jointly owned operations are such that each participant may not receive
and sell its precise share of the overall production in each period.  The
resulting imbalance between cumulative entitlement and cumulative production
less stock is 'underlift' or 'overlift'.  Underlift and overlift are valued at
market value and included within debtors and creditors respectively.  Movements
during an accounting period are adjusted through Cost of Sales such that Gross
Profit is recognised on an entitlements basis.  The Group's share of any
physical stock is accounted for at the lower of cost and net realisable value.
There was no underlift or overlift prior to 2004.


Save as discussed above there are no changes to the accounting policies as set
out on pages 51 to 53 of the Annual Report and Statement of Accounts for the
year ended 31st December 2003.




2.  Acquisitions

The Energy Africa and EAGHL acquisition is accounted for under the 'acquisition
method' in accordance with FRS 7 'Fair values in acquisition accounting',
whereby the assets and liabilities acquired are restated to fair value, with any
excess of the purchase consideration over the fair values of the net assets
acquired allocated to goodwill.


The fair value of the purchase consideration of £327,911,243 comprised
132,973,351 Tullow shares issued valued at £135,632,816, using the market price
at the date of acquisition, plus cash consideration and acquisition expenses
amounting to £192,278,427.


The merger provisions of Section 131 of the Companies Act, 1985 applies to the
share consideration amount and results therefore in a transfer of £122,335,483
to the Merger Reserve.


After restating the acquirees' balance sheets at the acquisition date to comply
with the Group's accounting policies, fair value adjustments were applied to
restate oil and gas tangible and intangible fixed assets, stock, and the hedging
instruments acquired to estimated fair values of £401,144,007, £643,356 and a
liability of £28,283,011 respectively.


The fair values of other net liabilities of £45,593,109 materially approximate
their book values, such that no fair value adjustments were necessary. The total
of the fair values of the assets and liabilities acquired matches the purchase
consideration, such that no goodwill arises on the acquisition.




3.  Earnings per Ordinary Share


The calculation of basic earnings per ordinary share is based on the Profit for
the Period after Taxation of £10,002,072 (first half 2003 - £6,776,655) and a
weighted average number of shares in issue of 422,516,777 (first half 2003 -
370,912,069).


The calculation of diluted earnings per share is based on the profit for the
period after taxation as for basic earnings per share. The number of shares is
adjusted to show the potential dilution if employee and other share options are
converted into ordinary shares. The weighted average number of shares in issue
is increased to 427,087,202 (first half 2003 - 373,677,919).




4.   Statement of Total Recognised Gains and Losses


                                                             6 Months         6 Months           12 Months
                                                             30.06.04         30.06.03            31.12.03
                                                            Unaudited        Unaudited             Audited
                                                             Stg£'000         Stg£'000            Stg£'000

Profit for period                                              10,002            6,777              10,921
Currency translation adjustment on
foreign currency net investments                                  304          (1,780)             (5,034)

Total Recognised Gains Relating to the Period                  10,306            4,997               5,887




5.   Reconciliation of Movement in Equity Shareholders' Funds


                                                            6 Months         6 Months           12 Months
                                                            30.06.04         30.06.03            31.12.03
                                                           Unaudited        Unaudited             Audited
                                                            Stg£'000         Stg£'000            Stg£'000

Profit Retained for period                                    10,002            6,777               7,139
Currency translation adjustment on
foreign currency net investments                                 304          (1,780)             (5,034)
Equity Shares Issued                                         254,739           13,553              13,516

Net Increase in Equity Shareholders' Funds                   265,045           18,550              15,621

Equity Shareholders' Funds - Opening Balance                 115,921          100,300             100,300


Equity Shareholders' Funds - Closing Balance                 380,966          118,850             115,921




6.            Dividends


The Company's shareholders approved a dividend payment of 1p per share at the
Annual General Meeting on 7th July 2004. This amount was paid on 9th July 2004
to shareholders on the register of members of the Company on 21st May 2004.


The Board have declared an interim dividend of 0.5p per share in the half year
to 30th June 2004 to be paid to 9th November 2004 to shareholders on the
register of members of the Company on 8th October 2004. (2003 - Nil).




7.      Proven and Probable Reserves Summary


                                    EUROPE             AFRICA            ASIA                     TOTAL
Working Interest Basis           Oil       Gas       Oil      Gas     Oil     Gas        Oil       Gas   Petroleum
                                mmbo       bcf      mmbo      bcf    mmbo     bcf       mmbo       bcf       Mmboe

At 1st January 2004                -    148.60     17.76    37.05       -  128.24      17.76    313.89       70.07
Revisions                          -    (3.10)      0.57   (0.46)       -       -       0.57    (3.56)      (0.02)
Acquisitions                   18.00     14.78     85.31        -       -       -     103.31     14.78      105.77
Production                    (0.16)   (19.16)    (1.44)   (0.55)       -  (1.07)     (1.60)   (20.78)      (5.06)

At 30th June 2004              17.84    141.12    102.20    36.04       -  127.17     120.04    304.33      170.76


Proven and probable reserves are based on third party reports and are defined in
accordance with the UK SORP 'Accounting for Oil and Gas Exploration,
Development, Production and Decommissioning Activities'.


The Group provides for depletion and amortisation of tangible fixed assets on a
net entitlements basis, which reflects the terms of the Production Sharing
Contracts related to each field. Total net entitlement reserves were 144.34
mmboe at 30th June 2004 (61.26 mmboe - 31st December 2003).




8.      Auditors' Review


The interim accounts (unaudited) have been reviewed by the Group's joint
auditors, Deloitte & Touche LLP and Robert J Kidney & Co.


9.      Approval of Accounts


These interim accounts (unaudited) were approved by the Board of Directors on
13th September 2004.


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