Placing and Trading Update

Tullow Oil PLC
10 March 2003


10 March 2003

Tullow Oil plc

Placing and Trading Update

Placing

Tullow Oil plc ('Tullow' or the 'Company') announces that it has today entered
into arrangements, conditional inter alia on admission, to place up to
17,900,000 new ordinary shares of 10p each at 80 pence per share (the
'Placing'), to raise up to approximately £14.3 million before expenses. The new
ordinary shares represent approximately 5.0 per cent. of Tullow's existing
issued share capital. Brokers to the Placing are Investec Securities and Davy
Stockbrokers.

The Company also announces today that it has agreed the principal commercial
parameters of a new debt facility (the 'Acquisition Debt Facility') with a
consortium of three leading international banks. The Company anticipates that
legally binding documentation relating to this facility will be signed within 4
to 6 weeks.

The Company intends to use the net proceeds of the Placing, together with
drawings under the Acquisition Debt Facility, after repaying a maturing bank
loan of approximately £5 million, to take advantage of appropriate opportunities
to acquire oil and gas assets on terms which have the potential to add value to
the Group. In the short term, the remaining  portion of the net proceeds of the
Placing will be used to further the Group's exploration and development
activities and for general working capital.

Financial information on 2002

The Group's trading performance in 2002 was satisfactory with trading results
significantly ahead of 2001. The Company estimates that for the year ended 31
December 2002, Group turnover was approximately £113 million (an increase of 47
per cent. over 2001) and Group operating profit before exploration costs was
approximately £32 million (an increase of 22 per cent.). These results have been
affected by a slower than planned build-up in production from the Espoir Field
and the weaker sales in the UK in December as a result of milder weather.

The Group's North Sea assets performed well at an operational level in 2002 but
gas prices were generally weaker than expected, although an active sales and
hedging strategy helped to offset some of this impact. CMS III had a positive
impact on production and reserves in the last quarter of the year. The outcome
for 2002 from the Espoir Field primarily reflects the decision by the operator
to delay bringing the main production zone on stream until the second quarter of
2003. Performance has benefited somewhat from higher than expected oil prices
despite a weakening US dollar in the period.

Current trading and prospects

Since the end of 2002, net daily production has averaged approximately 135
mmscfd in the UK and approximately 2,750 boepd in Cote d'Ivoire. The Company has
also benefited from the current favourable oil price environment and stronger UK
gas prices, most notably during January 2003 when Tullow's average price for
uncontracted gas exceeded 22pence/therm.

Offshore UK, the Company expects the recently completed MacAdam well to be
tested through the CMSIII production facilities during March 2003.

In the Espoir Field (Cote d'Ivoire), the EP-4 well is currently being
perforated, and this will be followed by the perforation of the upper reservoir
in the three other producing wells.  This is expected at least to double the
current production rate. The drilling of the Acajou prospect, which is adjacent
to Espoir and in which Tullow holds a 24.0 per cent. working interest, is
expected to commence in April 2003.

As separately announced today, Tullow has agreed an acreage swap with Shell
giving the Company a 24.8 per cent. participation in the drilling of the
Squirrel prospect, which is located close to the Buzzard field. This well
spudded on 9 March.

In India, an exploration well on Block GK-OSJ-1 was spudded in December 2002
(Tullow interest: 25 per cent.).  Testing of the well is underway, the results
of which are expected in late March 2003

In Algeria, an exploration well was spudded in the Agip-operated Block 222b in
February 2003 and results are expected before the end of March 2003.

The Directors believe that the Group will report further progress in 2003 from
its existing asset base and ongoing development programmes.

Acquisition and Divestment strategy

A number of the world's major oil and gas companies have begun a process of
significant portfolio rationalisation, resulting in divestments of many of their
non-core or non-material assets in 2003. The Company believes that this is
leading to an unusually attractive range and volume of potential acquisition
opportunities becoming available.

Tullow's strategy is to add material new assets to the Group portfolio, with the
intent of enhancing shareholder value and the Company has been actively seeking
potential acquisitions both in the UK and internationally for some months. Any
such acquisition would be funded by a suitable balance of debt and equity.

A number of such opportunities have already been identified by Tullow and are at
various stages of evaluation and negotiation. The Company expects to announce
agreement on at least one acquisition during the second quarter of 2003.

With a view to taking full advantage of such acquisition opportunities, and
given its scheduled commitments during 2003, including its programme of
exploration and development expenditure, the Company will pursue an increasingly
active portfolio management strategy in relation to its existing assets
including the possible sale of non-core assets.

Existing and proposed debt facilities

As at 31 December 2002 Tullow had total debt outstanding of approximately £105
million of which over £80 million gross was associated with the UK Southern
North Sea Assets acquired from BP in 2001. The Group also held cash balances of
approximately £44 million, of which approximately £25 million was held pursuant
to decommissioning funding arrangements.

Repayments under the UK debt facility are made semi-annually when the amount to
be repaid is re-determined by an independent assessment of the net present value
of future cash flows associated with the production and development assets
covered by the facility.  The next such re-determination is due in July 2003.

The Acquisition Debt Facility, which is additional to and unconnected with the
Group's existing debt facilities, will be used by Tullow in the acquisition of
development and producing assets in both OECD and non-OECD areas. The facility
will be structured to allow non-OECD assets to account for up to 30% of the debt
availability.

The Acquisition Debt Facility will be structured as a committed bridge facility
with an initial term of 12 months, extendable to 18 months, with an initial debt
availability of $100 million, extendable on certain conditions to $250 million.
It is Tullow's intention to refinance drawings under the Acquisition Debt
Facility, along with the Group's principal existing facilities, at a suitable
date following closing of an appropriate acquisition.

New Ordinary Shares

Applications will be made for the new ordinary shares to be admitted to the
Official Lists of the UK Listing Authority and the Irish Stock Exchange and to
the market for listed securities of the London Stock Exchange and the Irish
Stock Exchange. It is expected that such admissions will take place on 13 March
2003.  The new ordinary shares will rank pari passu with the existing ordinary
shares.

Commenting on the Placing, Aidan Heavey, Chief Executive of Tullow stated:

'We believe that 2003 will provide Tullow with unusually attractive
opportunities to make material acquisitions on good terms. With this placing and
the associated Acquisition Debt Facility, Tullow is strongly placed to pursue a
number of current opportunities, both in the UK and Internationally.'

For further information contact:

Tullow Oil plc                           Tel: [phone]
Tom Hickey, Finance Director
Graham Martin, Legal and Commercial Director
www.tullowoil.com.

Binns & Co PR Ltd
Emma McCaffrey                           Tel: [phone]
Judith Parry                             Tel: [phone]

www.binnspr.co.uk


NOTES TO EDITORS

Tullow Oil plc is a UK registered company, quoted on the London and Irish stock
exchanges, and one of the largest Independent Exploration and Production
companies in Europe. Tullow Oil is a dynamic player in the international oil and
gas industry. Its primary offices are in London (UK & Corporate) and Dublin
(International Business).

Tullow Oil has interests in 54 exploration and production licences spread over
three main areas - South Asia, Africa, and Europe. It has regional offices in
South Asia and Europe and is planning to open an office in West Africa.


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