Trading Statement

Tullow Oil PLC
13 July 2005





Tullow Oil plc Trading Statement and Operational Update


13 July 2005 - Tullow Oil plc (Tullow) issues this combined Trading Statement in
respect of the first half of the 2005 financial year and Operational Update in
respect of Production, Development and Exploration activities during the period
beginning April and ending July 2005. Tullow is a leading independent oil and
gas, exploration and production group, quoted on the London and Irish Stock
Exchanges (symbol: TLW) and is a constituent of the FTSE 250 Index. The Group
has interests in over 90 production and exploration licences in 16 countries and
focuses on three core areas: NW Europe, West Africa and South Asia.


The Trading Statement is in advance of the Group's Interim Results, which are
scheduled for release on 14 September 2005.  The information contained herein
has not been audited and is subject to further review.



HIGHLIGHTS


Operational Overview

•     Trading during the first half was at record levels, with a strong
      production performance combining with continuing favourable oil and gas 
      pricing.

Production and Reserve Enhancement

•     In the first half of 2005, average Group working interest production
      increased to 57,350 boepd, more than double that of the same period in 
      2004 and 41% ahead of the average for 2004.

•     Approximately 30 successful development and appraisal wells were drilled 
      in the first half. Production levels continue to increase and are 
      anticipated to average 60,000 boepd for the second half.

•     Following the commencement of production from the Horne & Wren project on 
      9 June 2005, UK gas production is at an all time high of over 150 mmscfd.

Exploration

•     Gas discovery with the Opal well in the Southern North Sea close to
      Tullow-owned infrastructure; two further UK wells confirmed for second 
      half.

•     Tullow-operated three well exploration programme in Gabon to commence
      in November.

•     A minimum of eight exploration wells are confirmed in the drilling
      schedule for the second half of 2005 in all three core areas.

Acquisitions and Portfolio Management

•     The £200 million acquisition of the Schooner and Ketch producing assets 
      completed on 31 March 2005, within three months of the deal being agreed.


•     Sale of Alba/Caledonia ($112 million/£59 million) completed in June and 
      completion of offshore Congo ($72 million/£38 million) disposal imminent.

Commenting today, Aidan Heavey, Chief Executive of Tullow said:

'The first half of 2005 continues to show the benefits of the acquisition and
development work undertaken over the last 12 months.  Recent investments, such
as Schooner and Ketch, are already contributing to performance, exploration
activity is increasing and the outlook for the remainder of the year is very
encouraging.'




CONFERENCE CALL

There will be a conference call at 09:30 (BST) today, hosted by Aidan Heavey,
Chief Executive,  Paul Mc Dade, Chief Operating Officer and Tom Hickey, Chief
Financial Officer of Tullow Oil plc:

For UK and international participants please call [phone] and
request to be connected to the Tullow Oil teleconference.  For participants in
Ireland, please call 01 659 2811.

A replay facility will be available from one hour after the conference call
until 18:00 (BST) on Tuesday 19 July.  Please call [phone], access
code: 5824709#.



For further information contact:

Tullow Oil plc                     Citigate Dewe Rogerson     Murray Consultants
([phone])                 ([phone])         ([phone])
Aidan Heavey                       Martin Jackson             Joe Murray
Tom Hickey
Paul Mc Dade



Trading Statement

This trading statement is provided for the six months ended 30 June 2005 in
advance of the Group's 2005 Interim Results, which are scheduled for release on
14 September 2005. The information contained herein has not been audited and is
subject to further review.

Overview

Trading during the first half has been at record levels, with strong production
performance combining with historically high levels of oil and gas pricing.
During the period, Tullow has successfully completed its first operated UK Gas
development and participated in approximately 30 successful development wells,
resulting in a steady increase in production in the UK and Africa. In addition,
the Group has announced the completion of the highly significant Schooner and
Ketch acquisition, thereby increasing exposure to the UK gas market at a time
when the forward curve is at an all time high. On the exploration front, while
there has been limited first half activity and general pressure on both
equipment and rig costs, an active programme is planned for the second half,
including material prospects in Mauritania and Uganda.

Production

Group working interest production for the first half of 2005 averaged 57,350
boepd, more than double the comparable period in 2004 and some 41% ahead of the
average for 2004. Second half production is expected to average approximately
60,000 boepd, after completion of all disposals. The production figures include
five months production from Alba and Caledonia prior to completion of their
disposal on 8 June 2005 and three months of production from Schooner and Ketch
following completion of the acquisition on 31 March 2005. A further breakdown of
these figures is provided in the Operational Update under each core area.
Production figures remain subject to final reconciliation and do not equate to
sales volumes. This is due to variations in lifting schedules and because a
portion of the production is delivered to host governments under terms of
Production Sharing Contracts.

Overlift position

At 30 June 2005, Tullow was in a net overlift position amounting to an estimated
310,000 barrels.  This principally comprised overlifted volumes in respect of
N'Kossa and Ceiba in the Republic of Congo, the Tchatamba field in Gabon and the
Espoir field in Cote D'Ivoire. These positions arise due to the election of
certain field partners to take their lifting entitlement in the form of single
dedicated cargoes, thereby causing temporary lifting imbalances between partners
during the year. Such overlift positions are valued at market value for the
relevant crude and accordingly a charge of  approximately £14 million will be
made to cost of sales in respect of the overlifted position at 30 June; this
charge is expected to reverse in full during the second half of 2005.

Treatment of under and overlift is identical under both UK GAAP and IFRS.

Exploration Write-Off

Tullow's accounting policy under UK GAAP is to write-off in full to the profit
and loss account all costs relating to pre-license costs and unsuccessful
exploration activities. The transition to IFRS will have no impact on this
treatment. Based on current estimates, Tullow's exploration write-off for the
first half of 2005 is expected to be of the order of £4 million subject to any
additional drilling activities.

Portfolio Management

On 8 June 2005 Tullow completed the sale of two subsidiaries holding minority
interests in the Alba and Caledonia oil fields in the Central North Sea to
Itochu Corporation for a headline consideration of $112 million (£59 million). A
profit of the order of £25 million will be realised on the sale.

The sale of Tullow's offshore Congo assets for a headline consideration of $72
million (£38 million) is awaiting government approval.

Capital Expenditure

During 2005 Tullow has planned capital investment in the order of £150 million,
of which approximately 70% will be spent on development activities in the UK,
Gabon, Congo, Cote d'Ivoire and Equatorial Guinea, with the balance focused on
exploration activities.

Net Debt and Refinancing Initiatives

Net Debt at 30 June 2005 was £207.5 million inclusive of all cash balances; this
excludes funds receivable in respect of the disposal of Offshore Congo Assets,
which remains subject to Government approval.

In the first half of 2005 the Group has also made substantial progress in the
refinancing of existing debt facilities. This refinancing will provide up to
$850 million of debt capacity giving greater flexibility in the funding of our
ongoing development programmes.  We expect this facility to be executed in July.


International Financial Reporting Standards (IFRS)

The Group will adopt IFRS with effect from 1 January 2005 and the 2005 interim
figures will be prepared on the new basis. In advance of the interim results,
Tullow plans to issue an IFRS restatement of the 31 December 2004 and 30 June
2004 consolidated financial information (profit and loss account, balance sheet
and cashflow statement) and 1 January 2004 balance sheet during August 2005.

Hedging Summary



Tullow's policy is to mitigate the Group's exposure to oil and gas price risk
for a portion of its production using a range of financial instruments.  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.  At 8 July 2005 the Group's hedge position to the end of 2006 is
as follows:






Oil Hedges                                        H2 05         H1 06         H2 06
         Volume - bopd                            9,946         7,744         7,718
         Average Price* - $/bbl                    36.1          32.9          32.9


Gas Hedges                                        H2 05         H1 06         H2 06
         Volume - mmscfd                             57            52            33
         Average Price* - p/therm                  32.6          52.1          36.6


* Average hedge prices are based on market prices as at  8 July 2005 and represent
the current value of hedged    volumes



Operational Update

This Operational Update summarises key activities in Production (P), Development
(D), Exploration (E) and Appraisal (A) assets of Tullow Oil plc for the period
beginning April 2005 and ending July 2005.

NW EUROPE CORE AREA

UK

In the UK North Sea, Tullow's principal interests are in the Caister-Murdoch
System (CMS), the Thames/Hewett group of licences and the Bacton onshore
gas-processing terminal on the Norfolk coast, which the Group operates.


Current working interest production                   1H 2005 Average (boepd)      June 05 Average (boepd)
UK Southern North Sea (1)                                             18,700                       24,900
UK Oil                                                                 4,350                  Assets Sold
UK Total                                                              23,050                       24,900

(1) Includes all condensate and Gas sales



Schooner (D/P)(Tullow 90.35%) and Ketch (D/P) (Tullow 100%)

The £200 million acquisition from Shell and ExxonMobil was completed on 31
March. The facilities maintenance campaign was implemented immediately and has
already improved the uptime of the assets to over 95% and increased average
production for the first three months of Tullow's operatorship to over 50
mmscfd.

The Ensco 101 drilling rig is scheduled to arrive in early Q4 2005 to commence a
programme of three new wells and nine work-overs with the aim of increasing
field production above 140 mmscfd during 2006. Technical subsurface modelling
work is on schedule to support a potential extension of the rig campaign into
2007. In addition, the NW Schooner Extension Appraisal area has been evaluated
and is likely to be drilled during 2006 and technical studies are progressing to
fully evaluate the exploration potential of the SE Schooner extension.

Horne and Wren (P) (Tullow 50%)

Natural gas production from Horne & Wren, Tullow's first operated development in
the UK, commenced on 9 June 2005 and is producing at the predicted gross plateau
rate of 90 mmscfd through the Tullow-owned Thames and Hewett infrastructure.


Munro (D) (Tullow 15%)

Following development sanction in November 2004, the Munro field platform and
pipeline construction is complete and the development well is currently
underway.  First gas from the project is expected in September 2005.

McAdam (P/D) (Tullow 14%)

An infill well opportunity has been identified to add incremental reserves and
accelerate production from the McAdam field, one of five fields which together
comprise the CMS III unitised development.  The well was spudded on the 2 July
and is expected to be tied into production in November 2005 adding incremental
gross production of approximately 40 mmscfd.



Alba (P/D) (Tullow 8%)

The sale of two Tullow subsidiaries holding minority interests in the Alba and
Caledonia oil fields in the Central North Sea to Itochu Corporation completed on
8 June 2005.  The headline consideration was $112 million (£59 million) with an
effective date of 1 January 2005.



Opal (formerly West Boulton) (E) (Tullow 46%)

The Opal exploration well (43/25a-2W) successfully encountered gas-bearing
reservoir sands in the targeted Carboniferous interval.  Information obtained
from the discovery well is being integrated with existing data to evaluate the
extent of the accumulation and to complete pre-development studies. The tie-back
options for the discovery include the nearby Tullow-owned CMS infrastructure.
Tullow's interest in this discovery has now been confirmed at 46% .



Oval Prospect (54/1a) (E) (Tullow 45%)

Tullow's first UK offshore operated exploration well on the Oval prospect is
scheduled to commence drilling mid-July with an anticipated duration of
approximately 50 days.



Romania



Costisa-1 (EPI-3) (E) (Tullow 42.06%)

The Costisa -1 exploration well in Block EPI-3 Brates, is progressing and is
currently at 3,050m. The well is expected to reach the total depth of 4,100m in
September 2005.





AFRICA CORE AREA



In Africa, Tullow has production and development interests in Gabon, Cote
d'Ivoire, Congo (Brazzaville), Equatorial Guinea and Namibia. Tullow also has
exploration interests in Morocco, Mauritania, Senegal, Cameroon, Uganda and
Egypt.


Current working interest production                  1H 2005 Average (boepd)      June 05 Average (boepd)
Congo                                                                  6,250                        6,950
Cote d'Ivoire                                                          3,050                        3,850
Equatorial Guinea                                                      6,100                        7,000
Gabon                                                                 18,400                       17,900
West Africa Total                                                     33,800                       35,700





Republic of Congo


M'Boundi Field (P/D) (Tullow 11%)

The development drilling programme is continuing on the M'Boundi field with 13
development wells drilled since January, of which 10 have been successful. These
wells have extended the field limits and, in the north-east, intersected higher
productivity reservoir. Average gross field production has increased from 35,000
bopd in January to the current rate of 44,000 bopd, with 29 producing wells
currently on line.  Three rigs are currently active on the field with a fourth
rig planned to commence drilling in August. The central processing facility
upgrade to 60,000 bopd has been completed and is operational.  A further upgrade
to 90,000 bopd and a water injection pilot project, as a precursor to full field
injection, are also planned.



A further 12 development wells and two water injection wells are planned for the
second half of 2005.



N'Kossa (P/D) (Tullow 4%)

Tullow announced the sale of its stake in the N'Kossa field in April 2005 for a
consideration of $72 million (£38 million).  The transaction remains subject to
Government approval and is expected to complete in August 2005 with an effective
date of 1 January 2005.  Average gross production for the first half of 2005 was
approximately 50,000 bopd.



Equatorial Guinea


Ceiba Field (P/D) (Tullow 14.25%)

Two infill production wells C-25 and C-26 and a work-over on C-22 were all
successfully completed and brought on stream in the first half of the year.
Additionally the C27i water injector was successfully drilled to the reservoir
level and is currently being completed. A further two injectors are planned and
the commencement of another production well is likely during the remainder of
2005.  This programme has resulted in steady increases in gross field production
from approximately 38,000 bopd in January to around 50,000 bopd at present, with
the second quarter of 2005 averaging 46,500 bopd, the highest quarterly
performance since late 2002. The infill drilling programme is expected to
continue through 2006.



Okume Complex Development (D) (Tullow 14.25%)

The Okume Complex comprises the Okume, Oveng, Ebano and Elon fields and was
formerly known as Northern Block G.  Two Tension Leg Platforms (TLPs), being
constructed in Korea, will be installed on the deepwater fields Okume, Ebano and
Oveng. The Central Processing facility and other shallow water facilities for
the Elon field are being constructed in the US Gulf Coast. The TLPs and the
shallow water jacket will be installed in the second quarter of 2006 with
drilling expected to commence mid 2006.  The development remains on budget and
on schedule for first oil by year end 2006.



Cote d'Ivoire



East Espoir Field (P/D) (Tullow 21.3%)

Current East Espoir Production is approximately 18,000 boepd gross. The first of
four new infill production wells, EP-7, was completed during the second quarter
of the year and is currently on production. The second infill well is in
progress. two further wells are planned with the intention of increasing
production from East Espoir to over 25,000 boepd by year end.



West Espoir Development (D) (Tullow 21.3%)

Progress on the West Espoir development project is well advanced. The jacket and
well head tower are being constructed in Sardinia and the Espoir FPSO upgrade is
nearing completion offshore. The project is on target for the installation of
the jacket, well head tower and pipeline hook-up in the Q4 2005. First oil
remains scheduled for the second quarter of 2006.



Gabon



Tullow's net production from Gabon has averaged over 18,500 bopd for the year to
date and is forecast to remain at this level through to the end of the year.


Niungo (P/D) (Tullow 40%)

Five appraisal/development wells (Niu 20 to 24) were drilled between January and
April 2005 and are gradually being brought on stream, increasing average gross
production to over 14,000 bopd in June. As a result of this successful drilling
programme, up to three additional step-out appraisal wells have been approved to
probe the northern extent of the field. The first of these, Niu-25, was
unsuccessful and will be used as a water disposal well. The second well, Niu-26,
was successful, reaching total depth on the 1 July.



Tchatamba (P/D) (Tullow 25%)

Gross production for the year to date has averaged approximately 36,000 bopd.
In May, a production well was recompleted over a 'sweet' reservoir section to
maintain the quality of the Tchatamba oil exports, which obtain a premium price
in the market. A project to upgrade the produced water handling facilities at
Tchatamba has also been completed which will prevent water production from
limiting oil production for the life of the production licence.



Etame (P/D) (Tullow 7.5%)

A development well (ET-6H) is currently being drilled on the Etame field. This
is expected to significantly increase gross production which is currently
averaging over 18,000 bopd.  In the same license area, Government approval was
obtained in February for the development of the Avouma/North Tchibali discovery
and development planning is well advanced with a view to first oil in second
quarter of 2006. Tullow is entitled to a carried interest of 7.5% through to the
commencement of production from this development.



Akoum (E) (Tullow 100%) and Kiarsseny (E) (Tullow 47.5%)

A rig has been contracted to drill up to three exploration wells on the Tullow
operated Akoum and Kiarsseny licences, with drilling expected to commence in
mid-November. These wells are targeting prospects in the vicinity of existing
infrastructure with a view to fast-track development in the case of success.



Namibia



Kudu (D)  (Tullow 90%)

Considerable progress has been made on the first phase gas-to-power development
project with the award of the Front End Engineering Design (FEED) contract to
the Wood Group (Woodhill Frontier/JP Kenny) in March 2005. The FEED study is
scheduled to complete at the end of July 2005 and once the various gas and power
offtake arrangements and related financing have been agreed, an investment
decision is expected in early 2006.   Appraisal of the field's considerable
reserves upside is in progress with drilling planned for 2006.  Tullow also
plans to consider the introduction of an additional partner into the project in
advance of any final investment decision.

SOUTH ASIA CORE AREA

In South Asia, Tullow has production and exploration interests in Pakistan and
exploration and appraisal activities in India and Bangladesh.


Current working interest production                   1H 2005 Average (boepd)      June 05 Average (boepd)
Pakistan                                                                 490                          450
South Asia Total                                                         490                          450



Bangladesh

Block 9, Bangora-1 (A) (Tullow 30%)

An appraisal programme for the Bangora/Lalmai discoveries was submitted and
approved by the Government of Bangladesh in April 2005.  Work on the programme,
which includes a Long Term Test of the Bangora-1 well and further seismic and
drilling, has commenced. First production from the Bangora-1 well is expected in
the first quarter of 2006 at a gross rate of approximately 50 mmscfd.
Acquisition of further 2D & 3D seismic is planned for Q4 2005 with appraisal
drilling commencing in Q1 2006.

Pakistan



Chachar (D) (Tullow 75%)

Following approval from Government of Pakistan for the development of the
Chachar Field, a FEED study has been initiated and development planning is
on-going, with first gas scheduled for Q2 2006.

New licence awards (E) (Tullow 40%)

In the last quarter, Tullow has signed four new exploration licences in Pakistan
  - Kohat, Bannu West, Kalchas and Kohlu.  Each of these licences has potential
prospectivity for both oil and gas and Tullow plan to commence exploration work
as soon as practicable.


India



Block CB-ON-1 (E) (Tullow 50%)

In April, Tullow received Government of India approval to acquire a 50% interest
in Block CB-ON-1 (Cambay Basin).    Seismic reprocessing work is ongoing and it
is planned to acquire new seismic data late in 2005.



EXPLORATION

To date in 2005, Tullow has participated in three exploration wells; the Oval
gas discovery in the UK, the unsuccessful Avouma-2 well in Gabon and the Costisa
well in Romania that is currently drilling. Tullow has a further eight firm
wells planned in the second half of 2005 that are summarised in the table below,
with material prospects being drilled in Mauritania (Block 1 - Faucon) and
Uganda (Block 2 - Mputa). The programmes in Gabon will also extend into 2006,
while a number of contingent wells, also planned, are subject to partner
approval. In common with other industry participants, Tullow is currently
experiencing significant delays and cost pressures in securing rigs and related
equipment for drilling over the coming 12 months. This has resulted in the
deferral of certain activities into 2006, however the bulk of  equipment and
approvals have been secured for the programme set out below.

In addition to ongoing drilling programmes, the Group is also pursuing new
exploration ventures in each of its three core areas.



Summary of Planned Second Half 2005 Exploration Activity
Country              Licence             Prospect                Interest            Spud Date
Romania              EPI-3               Costisa-1               42.1% (op)          In progress
UK                   54/1a-E             Oval                    45.0% (op)          July 2005
UK                   44/23b-K            K3                      22.5%               August 2005
Mauritania           Block 1             Faucon 1                20.0%               September 2005
Pakistan             Nawabshah           Hakim Daho West         30.0% (op)          September 2005
Uganda               Block 2             Mputa-1                 50.0%               October 2005
Gabon                Kiarsseny           KME-1A, Equata          47.5% (op)          November 2005
Gabon                Akoum West          AKMC-1                  100.0% (op)         December 2005





                                      ENDS

Disclaimer

This announcement contains certain operational and financial information in
relation to 2004, which is subject to final review and has not been audited.
Furthermore it contains certain forward-looking statements that are subject to
the usual risk factors and uncertainties associated with the oil & gas
exploration and production business. Whilst the Group believes the expectations
reflected herein to be reasonable, the actual outcome may be materially
different owing to factors either within or beyond the Group's control, and
accordingly no reliance may be placed on the figures contained in such forward
looking statements.



For further information please refer to our website at www.tullowoil.com




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