Tullow Oil An Irish Success Story, 06 October 2010 Slide 1
Disclaimer This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Tullow believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Group s control or within the Group s control where, for example, the Group decides on a change of plan or strategy. The Group undertakes no obligation to revise any such forward-looking statements t t to reflect any changes in the Group s expectations or any change in circumstances, events or the Group s plans and strategy. Accordingly no reliance may be placed on the figures contained in such forward looking statements. Slide 2
Contents Section Page History of Tullow Oil 4 Company Projects 11 Tullow Culture 18 Forward Plans 21 Q & A Slide 3
Tullow History Founded by Aidan Heavey in 1985 - No oil industry experience - No money - No local market Today Tullow s market cap. is US$17 billion - Operations in 24 countries - Production of 60,000 boepd - 30 th largest company on FTSE Start Up Establish Company Borrow and Buy Exploration Growth Slide 4
Senegal 1986 Tullow s First Project Senegal Old abandoned wells Old abandoned pipelines Unavailable power station Challenge... Get wells on production Repair pipeline Get power station working with gas Drill and explore Slide 5
Typical Early Asset Suri Field Pakistan Dublin office managed assets in Pakistan, UK, Syria, Egypt, Romania, Bangladesh and Ivory Coast. Tullow s early focus was on low cost, onshore. Full cycle E&P approach: - License applications - Acquire geological data and seismic - Exploration drilling - Appraisal - Development - Production Operations In 1990s Tullow built a base for future growth Slide 6
2001 2007 Major Acquisitions BP Southern North Sea Assets ( 200mm) - Big step change in value and manpower - Re-registered as a UK company in 2000 Energy Africa ($570mm) - Increased African portfolio in 2004 - Timing was great with rise in oil prices - Integration challenge assets & staff Hardman Resources ($1.1bln) - Friendly acquisition in 2007 - Added Mauritania and Uganda acreage Fast & Flexible Deal Maker Slide 7
Ghana programme delivering excellent results Four fields discovered since 2007 Jubilee J bil world-class ld l oil il fi field ld Odum potential satellite development Tweneboa oil and gas-condensate field Owo major new light oil field discovery Ongoing Exploration and Development Jubilee 1st Oil Nov/Dec 2010 120,000 bopd production Forecast Capex - $3.35 billion Owo, O o T Tweneboa eneboa & Onyinya On in a wells ells Slide 8
Ghana FPSO Kwame Nkruhmah Discovery to first oil in ~ 40 months Slide 9
Uganda 1 Billion barrels discovered 35 out of 36 wells successful Purchased Heritage Oil s share Agreement with Total and CNOOC for divestment Ugandan Resources (P50) Prospective Resources >2.5bn boe Discovered Resources Slide 10
Tullow offices worldwide Dublin Ireland London U.K. Mauritania U.K./Norwich Netherlands Pakistan Senegal Bangladesh Côte d Ivoire Accra/Takoradi Ghana Gabon Kampala Uganda Tanzania Corporate Offices Key Regional Offices Local Offices Angola Namibia Madagascar Note: Tullow also has serviced offices in French Guiana. Cape Town South Africa Slide 11
Resourcing Model - Contract and Outsource Joint Ventures Operated v Non Operated - Industry wide model to mitigate risk Core Competence Internal - Drilling design, planning & control - Seismic interpretation - Geological interpretation - Reservoir Engineering - Planning and EHS compliance Outsource for Offshore Services - Drilling Rigs - Seismic Vessels - Design, Fabrication & Installation - Field operations Slide 12
In-House Drilling and Reservoir Engineering Expertise Drilling Engineering - Safe, environmentally compliant wells - Well planning & design - Maintain production wells Reservoir Engineering - Reservoir modelling & prod forecasts - Field well count and prod rates - Reserves booking Development and Operations - Safe surface facilities - Design and project management - Manage field operations Slide 13
In-House Geology and Geophysical Expertise 1) Interpret seismic data 2) Identify potential leads and prospects BEFORE INTERPRETATION 13km Top Triassic Sea Bed Middle Jurassic Top Permian Salt 1 2 3 AFTER INTERPRETATION Top Permian Reservoir Slide 14
Jubilee subsea facilities Subsea Equipment Installed Quantity Total WEST SIDE EAST SIDE Umbilicals 14 14 Miles Rigid id Jumpers 2 41 Rigid Flowlines 29 29 Miles Trees 14 16 Electrical Flying Leads 48 110 Steel Flying Leads 37 46 Manifolds 8 8 Tether Pile 9 9 Riser Bases 2 2 Average water depth 1,200m Slide 15
Jubilee FPSO Topsides Equipment as compression - Singapore ater treatment - Malaysia il processing Indonesia Turret Lift - Singapore Slide 16
Jubilee field Operational scale Initial Estimate (Phase 1) 150-160 Tullow Ghana positions ~700 in-country total contractors, of which ~400 rotational positions Total personnel ~1200 Project install +400-500 persons at any one time Accra-Takoradi upgraded air-bridge from Nov 09, 10-15 contractor HQ office ~130 TLW +20-30 contract + MODEC Accra MPV Bourbon Astyanax Supply + port base + port ~30 TLW + 20-30 contract persons inc MODEC + ~25 direct labour contractor +20 stevedore etc FPSO 50-80 POB, max 120 Rig 1, 100-120 Daughter Craft. Tanker handling Tug/AHT ~12 Rig 2, 100 (rig share) Marine Fleet 1 MPV with ROV, 1-3 AHT/PSVs 1 daughter craft, ~100 direct contractor staff Upgraded helo operation 10 pax + 2 crew, x2 craft Latest OGP spec; 20-25 contractor Slide 17
Creating Stakeholder Value Consistent and repeatable strategy Sustainable long term growth Balance exploration, major projects & funding Safety, environment, stakeholders & people - Ghana: Jubilee discovery & fast track development - Uganda: commercialisation, pre-emption & farmdown - High impact exploration portfolio Underpinned by financial strategy Strong, well funded balance sheet to enable growth - Debt and equity funding - Portfolio management Significant future operational cash flow - $2.75bn debt facilities - $2.1bn equity placings - Uganda transactions - Jubilee Phase 1 first oil Nov/Dec 2010 Slide 18
Tullow Values Focus on Results Work Together Integrity and Respect Entrepreneurial Spirit Slide 19
Social Enterprise Approach and Strategy Establishing a culture of success that cuts across manyy social sectors Slide 20
Industry Outlook Peak Oil Supply & Demand Oil price outlook Shale Gas Gas pricing impact LNG market Slide 21
Competition Gazprom Total Chevron Sinopec BP Shell Petronas BHP Billiton ExxonMobil PetroChina National Oil Companies - Different type of Competitor - Access to Licenses - Overseas expansion 0 100 200 300 400 Market Cap $Bn Drilling on Wall Street - Threat of Acquisition - Premium required by shareholders - Not in Tullow s Plans Slide 22
Corporate Level 2010 $1,483m Forecast $1,500m Build on Success - Add acreage, develop discoveries 2009 $1,140m 2008 $720m Long term view - Deliver on promises to shareholders - Company reputation and resources 0 400 800 1200 1600 P&D E&A 2000 Portfolio Balance - Contingent to commercial reserves - Finance growth and exploration Slide 23
Summary From small start up to FTSE 100 Entrepreneurial outlook Get right people Success is possible Slide 24
Tullow Oil plc 5th Floor, Block C Central Park, Leopardstown Dublin, D18 Tel: +353 01 213 7300 website: www.tullowoil.com Slide 25