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RNS Number : 3811U

Tullow Oil PLC

29 July 2020

TULLOW OIL PLC

Trading Statement and Operational Update

29 JULY 2020 - Tullow Oil plc (Tullow) issues this statement to summarise recent operational activities and to provide trading guidance in respect of the financial half year to 30 June 2020. This is in advance of the Group's Half Year Results, which are scheduled for release on Wednesday 9 September 2020. The information contained herein has not been audited and may be subject to further review and amendment.

Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today:

"Since becoming CEO on 1 July, I have been impressed by the quality of Tullow's people and the potential of our assets and I am confident that we can build Tullow into a competitive and successful business once again. Despite the challenging external environment in the first half of the year, Tullow has performed well; delivering production in line with forecast, agreeing the sale of the Ugandan assets and re-shaping the Group's structure and cost base. In the second half of 2020 our focus will remain on continuing to deliver safe and reliable production from West Africa, reducing debt and building a cost effective and efficient organisation that can compete in a low oil price environment."

Operational Update

 
 --   The impact of COVID-19 has been managed safely across our business with no impact on our operated 
       production. 
 --   Group working interest production in the first half of 2020 averaged 77,700 bopd in line with 
       expectations; full year guidance has been narrowed to 71,000-78,000 bopd reflecting continued 
       good performance across the portfolio. 
 --   In the first half of 2020, gross Jubilee production averaged 84,700 bopd (net: 30,000 bopd), 
       gross TEN production averaged 50,900 bopd (net: 24,000 bopd) and net production from the non-operated 
       portfolio was 23,700 bopd. 
 --   Ghana operational performance has been strong in the first half with uptime on both FPSOs 
       in excess of 95 per cent. 
 --   Completion operations on the Ntomme-9 production well at TEN are ongoing; the well is due 
       onstream in August. 
 --   The impact of COVID-19 on the Kenya work programme and fiscal framework has led the Joint 
       Venture to call Force Majeure on its licences which will delay FID and impact the ongoing 
       farm-down process. Constructive discussions are ongoing with Government regarding next steps. 
 --   In Suriname, the drilling of the Goliathberg-Voltzberg North prospect (GVN-1) in Block 47 
       is planned for the first quarter of 2021. A rig is expected to be contracted shortly for this 
       Upper Cretaceous prospect.

Financial Update

 
 --   Revenue for the first half of 2020 is expected to be c.$0.7 billion with a realised oil price 
       of $52/bbl, including hedge receipts of $131 million. 
 --   At 30 June 2020, net debt is expected to be c.$3.0 billion and liquidity headroom and free 
       cash are expected to be c.$0.5 billion; full year free cash flow is forecast to break even 
       at the current forward curve. 
 --   Capital and decommissioning expenditure guidance for 2020 remains unchanged at c.$300 million 
       (1H20: $192 million) and c.$65 million (1H20: $38 million) respectively. 
 --   As a result of lower near-term oil price forecasts, and a revision in the Group's long-term 
       oil price assumption from $65/bbl to $60/bbl, the Group expects material impairment and exploration 
       write-offs to be recorded at the half-year in the range of $1.4-1.7 billion (pre-tax). 
 --   At 28 July, 60 per cent of 2020 sales revenue hedged with a floor of $57/bbl, 44 per cent 
       of 2021 sales revenue hedged with a floor of $51/bbl.

Uganda transaction update

 
 --   Sale of Ugandan assets for $500 million in cash on completion and $75 million in cash following 
       FID, plus post first oil contingent payments, expected to complete before year-end. 
 --   Shareholder approval of the transaction confirmed at the General Meeting on 15 July with over 
       99 per cent of the 56 per cent votes cast in favour. 
 --   Transaction completion remains subject to the Government of Uganda and the Uganda Revenue 
       Authority entering into a binding Tax Agreement that reflects the agreed tax principles and 
       the Government of Uganda approving the transfer of Tullow's interests and Block 2 Operatorship 
       to Total. 
 --   This transaction represents an important first step to raising in excess of $1 billion proceeds 
       from portfolio management in what continues to be a challenging external environment for asset 
       sales and farm downs.

senior Management

 
 --   Rahul Dhir joined Tullow as Chief Executive Officer on 1 July 2020. 
 --   Dorothy Thompson will resume her role as Non-Executive Chair of the Board after a short transitional 
       period. 
 --   Mike Walsh has been appointed as General Counsel & Director, Risk, Compliance & IS, effective 
       3 August 2020, reporting to the CEO. Mike joins Tullow from Delonex Energy Limited where he 
       was General Counsel.

production guidance

 
 Group average working interest production    H1 2020 actual (bopd)   FY 2020 forecast (bopd) 
===========================================  ======================  ======================== 
 Ghana                                               54,000                   51,600 
===========================================  ======================  ======================== 
    Jubilee                                          30,000                   28,100 
===========================================  ======================  ======================== 
    TEN                                              24,000                   23,500 
===========================================  ======================  ======================== 
 Equatorial Guinea                                    5,000                    4,700 
===========================================  ======================  ======================== 
 Gabon                                               16,800                   16,700 
===========================================  ======================  ======================== 
 C ô te d'Ivoire                                 1,900                    2,000 
===========================================  ======================  ======================== 
 Oil production                                      77,700                   75,000 
===========================================  ======================  ========================

CONTACTS

 
 
 Tullow Oil plc                            Murrays 
  (London)                                  (Dublin) 
  (+44 20 3249 9000)                        (+353 1 498 0300) 
  Chris Perry, Matthew Evans (Investors)    Pat Walsh 
  George Cazenove (Media)                   Joe Heron 
========================================  ===================

Notes to editors

Tullow is an independent oil & gas, exploration and production group, quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW). The Group has interests in over 70 exploration and production licences across 15 countries.

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

Follow Tullow on:

Twitter: www.twitter.com/TullowOilplc

YouTube: www.youtube.com/TullowOilplc

Facebook: www.facebook.com/TullowOilplc

LinkedIn: www.linkedin.com/company/Tullow-Oil

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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