Tullow Oil plc issues the following Trading Statement in respect of its financial year to 31 December 2010 in advance of the Group's Full Year Results, which are scheduled for release on 9 March 2011.

Highlights

Production and Development activities • Jubilee Phase 1 production commenced on schedule at the end of November; currently producing at 50,000 bopd; ramp up to 120,000 bopd expected within six months. • In Ghana, Tweneboa and Enyenra (formerly „Owo?) development options are under review. • In Uganda, preparation of a legally binding Memorandum of Understanding to pave the way for the farm-down and development of all assets within the Lake Albert rift basin is progressing well. • Working interest production averaged 58,100 boepd in 2010, in line with previous guidance, and is expected to average 86,000 to 92,000 boepd in 2011.

Exploration and Appraisal activities • 83% exploration and appraisal success in 2010; four successes year-to-date in 2011. • In Ghana, extensive appraisal programme commenced in Deepwater Tano; Tweneboa-3 well confirms significant Greater Tweneboa Area resource potential. • Cormoran-1 well in Mauritania supports Cretaceous play; Down-dip Nsoga-2 appraisal well in Uganda proves upside potential. • Oil discovery at Mercury-1 in Sierra Leone further underpins Cretaceous potential in Liberian basin. • Further high-impact E&A programme consisting of approximately 40 wells planned for 2011.

Group operations and financials • 2010 full year capital expenditure of $1.2 billion; Forecast 2011 expenditure of $1.5 billion. • Net debt at 31 December 2010 was approximately $1.9 billion.

Commenting today, Aidan Heavey, Chief Executive said: 'In 2010, our business performed better than ever. We achieved exceptional exploration success and together with our partners delivered 'First Oil' on schedule in Ghana by year-end. In Uganda, while negotiations with the Government have taken longer than expected, they are progressing well. The new partnership of Tullow, CNOOC and Total remains fully committed and looks forward to commencing the basin-wide development this year. In 2010, we also expanded our portfolio and restructured our finances to position the Group to deliver further growth and continue as Africa's leading independent oil company.'

Production Group working interest production for 2010 averaged 58,100 boepd, in line with the 2009 average. A further breakdown of these figures is provided in the Operational Update. Production figures in this update remain subject to final reconciliation and do not equate to sales volumes which averaged 47,400 boepd in 2010. This is due to variations in lifting schedules and because a portion of the production is delivered to host governments under the terms of Production Sharing Contracts.

Realised prices and oil discount Realised commodity prices during 2010 were significantly higher than those in 2009. The realised oil price was approximately $78/bbl (pre and post hedge) and the realised UK gas price was approximately 40p/therm (pre hedges) and 42p/therm (post hedges).

The Group's oil production sold at an average discount of approximately 2% to Brent during 2010. Total revenue for 2010 is expected to be of the order of $1.1 billion, compared with $916 million in 2009. The increase in revenue is due to the increase in realised commodity prices during the year.

Capital expenditure Capital expenditure for 2010 amounted to approximately $1.2 billion. This was lower than originally budgeted due to deferred activity in Uganda and certain exploration drilling being deferred into Q1 2011. Based on current work programmes, capital expenditure for 2011 is forecast to be $1.5 billion. Approximately 60% of this investment will be allocated to Production and Development activities and 40% to Exploration and Appraisal.

Operational Update

Africa Tullow's African interests are in Ghana, Uganda, Liberia, Sierra Leone, Côte d'Ivoire, Mauritania, Senegal, Equatorial Guinea, Gabon, Congo (Brazzaville), Namibia, Kenya, Ethiopia, Congo (DRC), Tanzania and Madagascar.

Tullow's African portfolio performed strongly in 2010. Production was in line with expectations, averaging 39,000 boepd, and in November included production from the Jubilee field in Ghana. An Exploration and Appraisal success ratio of 82% (23/28) was achieved in Africa with highlights including the successful appraisal of the Tweneboa field and the discovery of the Enyenra (formerly "Owo") field in Ghana, and the successful Mercury-1 exploration well in Sierra Leone which further extended the Equatorial Atlantic play.

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