Exploration: Investing for Growthfiles.investis.com/twl/pdf/exploration_b.pdf · −G&G integration e.g. Petrel −E2P (Exploration to Production) −Context awareness e.g. CI, GIS

Building a Balanced Portfolio of International Exploration and Production Assets

Exploration: Investing for Growth

22006 Capital Markets Day

Presentation Contents

Appendices: Explanation of Core Plays

Angus McCossWrap-up and Thanks

Jerry JarvisNew Ventures: Supporting Regional Growth and Feeding New Ventures Funnel

John McKennaAsia: High-Impact Opportunities that are Focussed to Succeed

Manu WopeSouth and East Africa: Unlocking and Developing the Potential of Exciting Core Plays

Robin SutherlandWest Africa: Technology, Programme Execution and Expansion creates Opportunities

Jan MaierNorth Africa: Building for the Future with Global Knowledge and Dedicated Skills

Chris FlavellEurope: Plenty Still to Play For

Angus McCossExploration Growth Strategy

PresenterSection

32006 Capital Markets Day 3

Angus McCossGeneral Manager Exploration

Exploration Growth Strategy


Global Resources

Historic Oil Prices (Brent Crude)

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/bbl)

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10

20

30

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50

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Gboe

1930 1950 1970 1990 2010 2030 2050

Discoveries – 1930 onwards

?

Past

Future

Production

□ Era of easy to find oil and gas is over−Geological fundamentals

□ High energy price outlook−High demand & accustomed consumers

−Service Cos accustomed to high rates

− Producers have new price expectations

−High price acreage in bid rounds

− Political tensions, Middle East & Nigeria

−Higher national takes

− Technical development challenges

□ Stiff competition for resources− Talent

−Quality affordable acreage

□ Opportunities for independents−Niches to apply experience

−Majors shedding portfolio tails


An illustration of the impact of Prospect Scale

20-25% of Resources inIndependent’s Campaigns

� Risk Spread� Follow-up� Sustainable

75-80% of Resources inMajor’s Lucky Strike

� High Opportunity Cost� ‘Hit-or-Miss’ Rare Prize� Diminishing Big Game

Majors focussed on the few remaining Big Prospects

Majors less efficient developing small fields

Opportunities abound for Tullow in sustainable mid-scale campaigns

Prospectivity(million boe / 100,000 sq km)

High

1000

500

250

125

63

31

16

8

4

2

Medium

100

50

25

13

6

3

2

1

Low

10

5

3

1

1

Efficiency Threshold


Geology outranks geography

Access difficult

Risk management

Material interest

Material prospects (in decline)

Cyclic investment, into and within E&P

Skewed success– Hit or miss wildcatting (1:10)– Failing to push the envelope (9:10)

Industry Tullow

□ Core plays & geological skills□ Geological focus within global footprint

□ Relationships & independence□ 3 longstanding regional operating hubs

□ Execution of strategic campaigns□ Culture, Creativity, Control□ Screen → Evaluate & Validate → Deliver

□ 50% average prospect interest (47%)

□ Right-sized with follow-up

□ Balanced portfolio funnel□ Steady funnel feed (>170 leads/prospects)

□ Balance of high-impact & near-infrastructure□ 6:11 wells, 55% success YTD

Cyclic recruitment □ Professional development (50 staff)

Exploration: Fundamentally Finding Oil & Gas


Clear Growth Strategy

Group Growth Strategy□ Extend proven business models and capabilities into viable growth environments

□ Proactive portfolio management maintaining balance between portfolio segments

Corporate Growth Strategy□ Acquisition of complementary value-enhancing E&P portfolios

□ Capture corporate opportunities, which improve the value chain

Brownfield Growth Strategy□ Acquisition of nearby P&D assets profitably extending infrastructure and field life

□ High-grade P&D portfolio to boost production during most profitable periods

Exploration Growth Strategy□ A balance of near-infrastructure and high-impact exploration for oil and gas

□ Building on knowledge - expansion based on core plays and skills− Forward positioning through global understanding of core plays

− Rapid and robust evaluation of short-lived opportunities


Global Exploration Staff Experience

London

Cape Town

Dublin

50 Geologists and Geophysicists□ London (HQ and Europe, 15)

□ Dublin (Asia/South America, 18)

□ Cape Town (Africa, 17)


Know How: Applied Technology and Exploration Ethos

□ Open to majors and independents−Evolutionary e.g. PSDM, Chemostrat

−Revolutionary e.g. CSEM, TRT

□ Right deployment−Right technology / methodology

−Right timing / scaling

□ ‘Joined-up’ workflows−G&G integration e.g. Petrel

−E2P (Exploration to Production)

−Context awareness e.g. CI, GIS

□ Proprietary insights− Team work in a creative culture

− Local knowledge leveraged globally

−Assured technical excellence

Sch

lum

ber

ger

Pet

rel

3D Seismic Salt Dome


Core Plays

Rift Basins

Proven 1er play

1st class source

Simplicity

Trapping

Sealing

Fold Belts

Proven 1er play

1st class trap

Follow up

Imaging

Drilling

Strat Traps

Proven 1er play

1st class upside

Back yard

Plumbing

Targeting

Salt Basins

Proven 1er play

1st class seal

Diversity

Imaging

Depth conversion


Core Plays

Central North Sea

South Viking Graben

Indus Basin

Gulf of Kutch

Cambay Basin

Bengal Basin

Assam Arakan

East African Rift

Orange BasinKwanza Basin

Lwr. Congo Basin

Rio Muni Basin

Rio del Rey Basin

Côte d’Ivoire– Tano Basin

Senegal – Mauritania Basin

Morondava Basin

SE Falklands Basin

Southern North Sea

Potwar Basin

Guyane Basin

Suriname Basin


‘Atlantic Twins’ and ‘Step Outs’

□ Experience in Europe, Africa and Asia is stepped out into contiguous analogous basins

□ Atlantic margin experience in Europe and Africa transfers to twin basins in the Americas


Hardman Acquisition Doubles Prospective Acreage

Mauritania – Step Out in Core Plays□ Eight contiguous licences with significant exploration potential

□ Proven offshore hydrocarbon province with play diversity and prospective trends

□ Low exploration well density

Uganda – Control in Core Plays□ Operational control of Albertine Basin

□ Control pace and strategy of exploration campaign

□ Increases exposure to significant upside following early success

Tanzania – Step Out in Core Plays□ High impact exploration step out in East Africa

□ Hydrocarbon systems: Msimbati / Mkindani oil seeps & Mnazi Bay gas discovery

□ Diverse oil and gas potential in familiar plays


Hardman Acquisition Fits Growth Strategy

Suriname – Near-Infrastructure with Upside□ Stratigraphic traps in Uitkijk blocks adjacent to Tambaredjo heavy oil field

□ Low cost tie-backs to existing infrastructure

□ Upside potential in Coronie block

Guyane – Atlantic Twin within Core Plays□ Leveraging West African geological expertise into twin Atlantic basin

□ High impact exploration potential

□ Substantial Matamata prospect and Kawana Eastern Basin plays

Falkland Islands– Atlantic Twin within Core Plays□ High risk high reward prospects identified

□ Oil shows and flows from Malvinas Basin wells

□ Diverse trap types with Atlantic margin analogues


STRAT TRAPS

SALT BASINS

EUROPE

RIFT BASINS

STRAT TRAPS

SALT BASINS

AFRICA

FOLD BELTS

RIFT BASINS

ASIA

Global Experience in Core Plays Feeding the Business Funnel

ScreenScreen Evaluate & ValidateEvaluate & Validate DeliverDeliver Development

& ProductionDevelopment& Production

Over 170 leads and prospects currently in funnel


Exploration Business Funnel: Well Balanced

Oil

Gas

High Impact

Near -Infrastructure

Oil : Gas

□ Balanced portfolio feeds balanced business

□ Range of international oil contracts

□ Feeding profitable regional gas businesses

High Impact : Near-Infrastructure

□ Spread of risk profile & chance of success

□ Chance to change the scale of Tullow

□ Increased certainty of lower-cost supply

Number ofLeads &

Prospects

Number ofLeads &

Prospects

Over 170 leads and prospects


Exploration Business Funnel: Prudent Diversity, with Focus

Africa

Asia

Europe

Salt Basins

Strat Traps

Rift Basins

Foldbelts

Other

Three Regional operating hubs

□ Influence through relationships & networks

□ Cost control & economies of scale

□ Africa has abundance of good opportunities

Four Core Plays

□ Enables leverage & development of skills

□ Experience & knowledge transfer maximised

□ Focus on prolific global plays

Number ofLeads &

Prospects

Number ofLeads &

Prospects

Over 170 leads and prospects


Global Exploration Leadership Team

Head ofExploration

Angus McCoss

Head ofExploration

Angus McCoss

Europe Exploration

ManagerChris Flavell

Europe Exploration

ManagerChris Flavell

North AfricaExploration

ManagerJan Maier

North AfricaExploration

ManagerJan Maier

West AfricaExploration

ManagerRobin Sutherland

West AfricaExploration

ManagerRobin Sutherland

S & E AfricaExploration

ManagerManu Wope

S & E AfricaExploration

ManagerManu Wope

AsiaExploration

ManagerJohn McKenna

AsiaExploration

ManagerJohn McKenna

GlobalNew

VenturesJerry Jarvis

GlobalNew

VenturesJerry Jarvis

GlobalGeophysics

ManagerJoe Mongan

GlobalGeophysics

ManagerJoe Mongan

GlobalGeological

AdviserJerome Kelly

GlobalGeological

AdviserJerome Kelly

GlobalPortfolioManager

Bob Winter

GlobalPortfolioManager

Bob Winter

GlobalExploration

AdviserDoug Cherry

GlobalExploration

AdviserDoug Cherry

Focused Delivery in Business Units Balanced Overview in Global Team

Assist / Challenge / Assure

Business UnitsCAPE TOWN (Africa 17)DUBLIN (Asia 15+3)

LONDON (HQ & Europe 15)

50 Professional Geologists and Geophysicists


Areas of Responsibility

EuropeChris Flavell

EuropeChris Flavell

North AfricaJan Maier


West AfricaRobin Sutherland


S.E. AfricaManu WopeS.E. Africa

Manu Wope

AsiaJohn McKenna

AsiaJohn McKenna

Regional Managers□ Execute existing ventures□ ‘Step Out’ growth□ Support new ventures□ Existing ventures funnel

New Ventures – Jerry Jarvis□ Screens and ranks all basins

□ New region entry

□ Supports regional growth

□ Global new ventures funnel


Europe

EuropeChris Flavell

EuropeChris Flavell

□ High value, near-infrastructure exploration, with excellent success rate in past 4 years

□ Focussed exploration strategy on core stratigraphic and salt basin plays

□ Forward programme to build upon proven strengths as we expand area of operations


North Africa



□ Application of global skill set to stratigraphic, salt and rift plays offshore

□ Huge potential for hydrocarbon resource delivery from Core Plays in the region

□ Extension of Tullow footprint to Atlantic ‘Twin’ basins through Hardman acquisition


West Africa



□ Very active exploration programme on existing licences

□ Strong drive for expansion based on West Africa experience

□ Application of best available technology is key


South and East Africa

S.E. AfricaManu WopeS.E. Africa

Manu Wope

□ Success through basis-wide strategy in the Albert Graben

□ Leveraging core competencies and experience from Uganda to other rift basins

□ Hardman acquisition adds prove Rovuma Basin in Tanzania

□ Building regional position and on course to deliver reserves


Asia

AsiaJohn McKenna

AsiaJohn McKenna

□ High impact opportunities

□ Emerging energy markets with demand currently outstripping supply

□ Potential to leverage core competencies to help satisfy strong local demand

□ Lively acreage turnover presents farm in opportunities


New Ventures

New VenturesJerry Jarvis

□ Rapid controlled growth through focused exploration business development

□ Leveraging competencies and core plays with global oversight

□ Rigorous and timely evaluation support, applying a global perspective

Documents

Exploration: Investing for Growthfiles.investis.com/twl/pdf/exploration_b.pdf · −G&G integration e.g. Petrel −E2P (Exploration to Production) −Context awareness e.g. CI, GIS