Overview presentation

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2 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 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

3 DEFINING TULLOW S POSITION IN THE E&P INDUSTRY The four pillars of our growth ambitions Africa Oil Sustainable Progressive A balanced E&P business, focused on oil & specialising in emerging markets Slide 3

4 OUR PORTFOLIO OF ASSETS NEW VENTURES - exploration Extensive acreage in Africa and South America, in well-known plays Multiple high-impact frontier campaigns planned over next three years Recent new licences in Côte d Ivoire, Suriname, Peru* & Comoros* Mauritania Côte d Ivoire Ghana Eq. Guinea Gabon Uganda Kenya EAST AFRICA - development Kenya Significant discoveries in South Lokichar basin Phased development plan to reach 100+ kbopd at plateau Driving towards first oil in 2022 Uganda Estimated 1.7bn bbls of discovered resources in Uganda, development progressing c.230kbopd gross production at plateau; expected capex covered to first oil and beyond Jamaica Peru Guyana Suriname WEST AFRICA - production Ghana Flagship low-cost producing assets - Jubilee & TEN fields Investment focused on multi-year incremental drilling programme to maximise and sustain production Combined gross FPSO design capacity of ~200 kbopd Non-operated portfolio Incremental investments to sustain production Namibia Zambia Comoros West Africa oil production guidance: 93, ,000 bopd Uruguay *Peru & Comoros licences remain subject to final Government approval A balance of production, development & exploration assets 1 Total includes Jubilee Field Insurance Production-Equivalent Barrels of 1,000 bopd in 2019 Slide 4

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6 A BALANCED E&P DELIVERING GROWTH & RETURNS Cash generation Reset business delivering substantial free cash flow Balanced capital allocation to maximise returns Debt & Gearing Significantly strengthened balance sheet Deleveraging remains a priority Investing in our assets Disciplined capital investment to grow our business Flexibility retained to respond to oil price below $50 Shareholder returns Capital Returns Policy established Ordinary dividend supplemented by additional returns Delivering on our targets to create value for our shareholders Slide 6

7 kbopd Overview presentation PRODUCTION GROWTH THROUGH EXISTING ASSETS 2018 production Production in line with expectations Successful return to drilling in Ghana, and strong performance from non-operated portfolio 2019 production ~10% growth in group production from 2018 New TEN & Jubilee wells to ramp up production Invest to sustain non-operated production rates Significant future cashflow growth Uganda and Kenya developments to deliver ~60,000 bopd production net to Tullow Oil production growth Ghana Jubilee BI insurance Non-op Portfolio Future estimated production f Future growth Inc. East Africa Period Oil production* (bopd) Gas (boepd) FY 18 88,200 ~1,800 FY 19f 93, ,000 ~1,000 Existing assets can deliver significant production growth * Includes production equivalent insurance payments relating to the Jubilee field of 8,600 bopd in 2018f and 1,000 bopd in 2019 Slide 7

8 COST BASE RESET FOR THE LONG TERM $m $m 250 Net G&A 400 Financing costs f 2019f f 2019f $/bbl Unit Opex f 2019f Continued cost discipline Competitive industry cost base Cost conscious culture embedded Targeting further operational efficiencies Optimising capital structure Sustaining low cost base through the cycle Slide 8

9 Oil price ($/bbl) Overview presentation CONTINUED PRUDENT FINANCIAL MANAGEMENT Diversified and evolving capital structure A balance of funding sources Revolving RBL provides long-term flexibility Strong liquidity headroom No near-term maturities Revenue protection through hedging Proven hedging policy over 10 years Continue to systematically hedge Ongoing optimisation of structure and cost yielded $850 million 2019 Hedging programme Maximise exposure to upside $800m $800m $80 $2.4bn $2.4bn $650m $650m $300m $300m % sales volume 35%* sales volume 25% sales volume $56 60% protected by floor HY Bond Convertible Bond RBL Unhedged Puts & 3-ways Collars (floor with (floor with full upside) upside capped) Slide 9 * ~30% three-ways with upside participation up to $74 and above $80, ~5% straight puts.

10 CAPITAL ALLOCATION FRAMEWORK DEBT AND LIQUIDITY INVESTING IN OUR BUSINESS SHAREHOLDER RETURNS Balance sheet robust to future oil price volatility Driving net debt below $2 billion in near term Retain flexibility with longer term gearing of 1x-2x Ensuring headroom for future opportunities Apply strict criteria to allocate capital across the portfolio: Maximising production: Immediate cashflow High returns, short payback Growth from discovered resources: Future cash flow Medium-term payback Finding new oil: Significant value New resources, capital growth Other opportunities Demonstrating financial discipline and business progress Capital Returns Policy established Sustainable annual ordinary dividend Additional returns in periods of strong FCF Balanced capital allocation focused on maximising shareholder returns Slide 10

11 DELEVERAGING THE BALANCE SHEET REMAINS A PRIORITY Net debt ($bn) 5.0 Gearing ratio (times) 5 DEBT & GEARING 4.0 Net debt Gearing 4 Balance sheet robust to future oil price volatility Driving net debt below $2 billion in near term Retain flexibility with longer term gearing of 1x-2x $50/bbl 2 Building sufficient headroom for future opportunities $70/bbl f EBITDAX ($bn) Robust balance sheet provides flexibility to support growth Note: 2019 forecasts based on oil price range of $50/bbl and $70/bbl Slide 11

12 ATTRACTIVE OPPORTUNITIES FOR CAPITAL INVESTMENT INVESTING IN OUR BUSINESS Apply strict criteria to allocate capital across the portfolio: Maximising production: Immediate cashflow High returns, short payback Growth from discovered resources: Future cash flow Medium-term payback MAXIMISING PRODUCTION GROWTH FROM DISCOVERED RESOURCES FINDING NEW OIL Annual investment outlook $200m - $300m Ghana Fully covered Uganda Up to $150m Exploration $50m - $100m Non-op $75m Kenya (pre-fid) Finding new oil: Significant value New resources, capital growth Other opportunities Invest up to $600m in high value assets Flexibility to lower capex if required with low oil price 2019 capex forecast of ~$570m* *2019 capex breakdown: Ghana ~$250 million, Exploration & Appraisal ~$140 million, West Africa non-operated ~$100 million, Kenya ~$70 million & Uganda post completion Tullow costs of ~$10 million Disciplined capital investment in opportunity rich portfolio Slide 12

13 FINANCIAL PROGRESS ENABLES SHAREHOLDER RETURNS SHAREHOLDER RETURNS Demonstrating financial discipline and business progress Capital Returns Policy established Sustainable annual ordinary dividend Additional returns in periods of strong FCF FREE CASH FLOW 1 RETURNS POLICY ORDINARY DIVIDEND Strong free cash flow generation outlook Balance across debt, investment and returns Established for 2019 financial year onwards One-off 2018 returns to be reviewed Ordinary dividend of no less than $100 million Paid semi-annually between interim and final ADDITIONAL RETURNS In periods of particularly strong FCF, the Board will look to supplement with additional returns Confidence in future delivery allows reinstatement of sustainable dividend Slide 13

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15 CASH GENERATION FROM EXISTING ASSETS WEST AFRICA BUSINESS PRODUCTION GROWTH Scope to grow net production beyond 100,000 bopd Return to a multi-year drilling campaign in Ghana Revival of Central & West Africa portfolio RESERVES GROWTH Significant scope for continued reserves & resources growth Organic delivery of Ghana business that is still growing Portfolio of infill, near-field, and exploration opportunities LOW RISK/ HIGH VALUE Low-cost operations averaging ~$10 opex/bbl High-quality, low-sulphur light crudes, appealing to global markets Established relationships and expertise through 30+ years in West Africa

16 GHANA PRODUCTION: A LONG-TERM SOURCE OF CASH GENERATION Maximising production Seven new wells planned for 2019 Forecast gross production of ~180 kbopd in 2019 Rig agreements give maximum flexibility Discovered resources to extend field life 244 mmbo 2C discovered resources to be developed Additional 570 mmbo of discovered upside potential Replenish reserves with rapid return on investment New oil potential Significant near-field tie-back opportunities Additional exploration acreage to grow Ghana business TEN oil (gross) Jubilee oil (gross) Slide 16

17 $m Production rate (bbl oil per day) Overview presentation GHANA LONG-TERM PRODUCTION OUTLOOK 200, ,000 Prospective 3P Reserves 2C Resources TEN 2P Reserves Jubilee 2P Reserves 100,000 50, Slide 17 Investment to sustain production Growing production to 180,000+ bopd $ m annual capex to grow & sustain plateau Market conditions continue to facilitate capex flexibility $1,200 $1,000 $800 $600 $400 $200 $0 Ghana net capex * Forecast *2017 capex excluding $69m of prior year accrual reversals

18 CENTRAL & WEST AFRICA PORTFOLIO NON-OPERATED ASSETS Booked net resource YE 2017 Solid production base 28% of 2018 Group production Focus on low-investment/high-value Stable 5+ year production profile ~$16 opex/boe Diversified & low risk 3 countries / 26 licences / 24 fields 14+ years of regional experience Primarily infill drilling & workovers Booked net resource November 2018 Platform for growth Near-field exploration New exploration licences Bolt-on business development Slide 18

19 Oil Price ($/bbl) Net Production (boe/day) Overview presentation CENTRAL & WEST AFRICA PERFORMANCE Reliable long-term production with capex flexibility 35,000 30,000 25,000 Côte d Ivoire Potential business development opportunities 20,000 15,000 Equatorial Guinea 10,000 Gabon 5,000 Forecast Historical Brent Oil Price CWA Net CAPEX CAPEX range: $50-100m CAPEX ($m) 0 0 Slide 19

20 Volume (MM boe) Volume of Oil (MM bbl) Overview presentation CENTRAL & WEST AFRICA REVIVAL Tchatamba 160% CWA 2P reserves replacement in 2018 (12.5 mmboe added in 2018) Reserves growth despite consistent production 2C Resources 2P Reserves Production 70% CWA 2P+2C resources increase in 2018 (~35 mmboe increase in 2018) Central & West Africa reserves/resources history Q C Resources 2P Reserves Slide 20

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22 UGANDA & KENYA - DEVELOPING TRANSFORMATIONAL DISCOVERIES KENYA UGANDA MATERIAL OIL DISCOVERIES 560mmbo 2C resource 1.7bbo 2C resource Uganda Kenya DEVELOPMENT STRATEGY E&A Development Value over volume Phased approach Farm down equity Non-operated position Minimise/zero capex PRODUCTION SCALE ,000 bopd gross production 230,000 bopd gross production Targeting ~300,000 bopd gross production from East Africa in the early 2020s Slide 22

23 UGANDA IS A BEST-IN-CLASS PROJECT Key project metrics ~$3.5 billion value of farm-downs by Tullow in Uganda since 2012 ~100 mmbo net 2P reserves to be booked at FID ~$4.50/bbl unit upstream Capex First Oil 2022 at no cost to Tullow 2.5bn bbls material 3C technical upside Final Investment Decision in 1H ,000 bopd net Tullow production Robust development; Tullow share funded through farm down Slide 23

24 UGANDA - PROJECT UPDATE Key milestones to FID Partner & Operator roles defined Total operate Tilenga CNOOC operate Kingfisher Tullow non-operator Upstream Pipeline FEED & Tilenga ESIA Completed EPC contracts ready for award CPF & well pad locations finalised 90% land acquired for CPF FEED completed on Uganda-Tanzania route Contracts for pipe & long-lead items prepared Upcoming activities Award of major upstream EPC contracts Approval of Pipeline & Kingfisher ESIAs Completion of pipeline geotechnical/ geophysical surveys FID Partners targeting 1H 2019 Multiple technical milestones achieved in readiness for FID 1H 2019 Slide 24

25 GROSS ANNUAL AVERAGE OIL RATE (KBOPD) Overview presentation DEVELOPING KENYA'S DISCOVERED RESOURCES South Lokichar development plan Discovered resources support development via export pipeline to Lamu Phased development approach planned Incremental developments to follow initial Foundation Stage, utilising installed infrastructure Full development to achieve plateau production of 100,000 bopd+ Agete Ekales NGAMIA 210 wells 18 pads CPF AMOSING 70 wells 7 pads Etom Twiga Erut Head pump Water & Power Pipeline to Lamu Amosing/Ngamia/Twiga Foundation Stage Foundation Stage targeting 210 mmbo Initial production of 60,000-80,000 bopd Allows early FID to take advantage of low cost environment Targeting FID: 2019, First Oil 2022 Foundation Stage gross capex of $2.9bn - Upstream $1.8bn - Pipeline $1.1bn - ~80% spend to First Oil CPF Central Processing Facility Diagram for illustration purposes only, not to scale Foundation Stage Incremental developments Slide 25

26 PROJECT OIL KENYA KEY BUILDING BLOCKS TO PROJECT DELIVERY Alignment in Fiscal, Commercial & Legal terms Agreed approach to land, water & infrastructure Social investment & local content plans Implementing lessons through EOPS Facilitated revenue sharing agreement Critical technical data being received Raises awareness of project at all levels Evaluates above-ground readiness Supports delivery of full scale development Oil in place analysis complete Dynamic data integrated into models Water-injection testing complete Well count & spacing confirmed Factory drilling approach Optimised CPF design to minimise cost Lean, modular CPF to process 80kbopd oil initially Flexibility to expand to 100kbopd+ with minimal capex & shutdown 18, 821km buried, heated pipeline Route through existing LAPSSET corridor Land access engagement with county ministries under way Construction of Lamu Port advancing well Significant amount of work completed by Partners and Government in 2018 Slide 26

27 KENYA STEPPING STONES TO FID To achieve FID in 2019, the following tasks must be completed: Complete pipeline & upstream Front End Engineering & Design Submit Environmental and Social Impact Assessment Finalise agreements over land title for upstream and pipeline Heads of Terms for critical commercial frameworks with Govt Finalise contract on agreed project water source Award of Engineering, Procurement and Construction contracts Implement project finance structure for the pipeline Ambitious, clear path to achieving FID in 2019, first oil in 2022 Slide 27

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29 A BUSINESS APPROACH TO EXPLORATION Focused Smart deals Discipline Efficiency Superior execution Refined portfolio of high-value assets in Africa & South America $300m from deals completed over the last three years Rigorous, consistent & disciplined deployment of capital Savings through agile working, turnkey solutions & new technology Simple wells delivered safely, responsibly, on time and on budget Maximising the value of every $ in pursuit of exploration success in 2019 and beyond Slide 29

30 EXPLORATION CRITERIA FOR VALUE CREATION Targeted exploration Light conventional oil Low cost simple wells Low complexity deep water Onshore and shallow water Manageable non-tech risks Attractive fiscal terms Risks spread & carried High rates of return High quality reservoirs Normally pressured Infrastructure supported High resource density COMMERCIAL SCREENING Tested at $50/bbl Low cost of development Value accretive CAPITAL & RISK SCREENING Return on Capital Acceptable risk / reward JV Alignment SUBSURFACE SCREENING Materiality Project NPV >$1Bn Healthy lifecycle IRR HIGH MARGIN OIL Onshore rifts East Africa light oil Simple offshore Africa & South America Production heartlands West Africa light oil Creativity balanced by fiscal discipline, technical/commercial rigour & business acumen Slide 30

31 MULTIPLE HIGH-IMPACT CAMPAIGNS OVER NEXT THREE YEARS Gross Unrisked #1 priority GUYANA 4 bbo Top ranked SURINAME CÔTE D IVOIRE 3 bbo 1.5 bbo New entries Under evaluation Near field PERU COMOROS MAURITANIA NAMIBIA JAMAICA ZAMBIA URUGUAY WEST & EAST AFRICA 2.3 bbo 7 bbo 2 bbo 0.7 bbo Firm Drilling Firm Seismic Airborne Survey Optional activity Drilling 3-5 high impact wildcats per year, within $150m exploration budget Peru & Comoros licences remain subject to final Government approval Slide 31

32 SPOTLIGHT ON GUYANA (60% operated equity) >4BBO Gross mean un-risked resources Kumaka (37.5% equity) Shelf-edge acreage in industry hot-spot Leveraging a decade of knowledge Increased equity in Kanuku, up-dip of giant oil discoveries Acquired 3D seismic at bottom of industry cycle Sharing Ghana operational expertise to maximise efficiencies >1 bbo gross unrisked resources to be tested by three wells in 2019 Slide 32

33 SPOTLIGHT ON GUYANA 2019 drill candidates Transformational opportunity with multiple follow-up potential Slide 33

34 SPOTLIGHT ON CÔTE D IVOIRE Low-cost exploration in core West Africa oil province Using both proven & innovative technology Carried work programme; 60% operated equity High-value barrels & low breakeven Light footprint execution across 8,000 sq km acreage >1.5 BBO Gross mean un-risked resources Identification of an underexplored play & rapid capture of an industry-leading position Slide 34

35 SPOTLIGHT ON COMOROS ~7 BBO 17 Leads 16,063 sq km 35% equity Large, operated, offshore oil play in East Africa Simple drilling and attractive fiscal terms Managed cost exposure in frontier acreage Flexible options to leverage seismic market Rapid deal-making with like-minded partner Building a sustainable frontier exploration programme for 2021 and beyond Comoros licences remain subject to final Government approval Slide 35

36 Follow Tullow on: Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT United Kingdom Tel: +44 (0) Fax: +44 (0) ir@tullowoil.com Web: Slide 36