Interim Results

Tullow Oil PLC
06 September 2006

Record 2006 Interim Results





6 September 2006 - Tullow Oil plc (Tullow), the independent oil and gas,
exploration and production Group, announces its interim results for the six
months ended 30 June 2006.  These results have been prepared in accordance with
the Group's policies under International Financial Reporting Standards (IFRS).





2006 Interim Results



Tullow had a strong first half of 2006. Trading and production reached new highs
and combined with continuing favourable oil and gas pricing led to record
profits and cash flow from operations.




                                                            1H2006             1H2005      % Change
                                                        £ millions         £ millions
Sales Revenue                                                310.7              201.4        Up 54%
Operating Profit                                             161.0              104.4        Up 54%
Profit After Tax                                              95.4               63.1        Up 51%
Operating Cash Flow before Working Capital                   236.4              116.4       Up 103%
                                                             Stg p              Stg p
Basic Earnings per Share                                     14.72               9.82        Up 50%
Interim Dividend per Share                                    2.00               1.00       Up 100%





•   10% increase in average half year working interest production to
    62,800 boepd

•   Current production is c.70,000 boepd and is expected to reach 75,000
    boepd by year end

•   Prospective acreage acquired in Ghana, Angola, Congo (DRC) and
    Madagascar

•   Exploration success: three oil discoveries in Uganda, three UK gas
    discoveries

•   Uganda: Encouraging well results leading to basinwide exploration
    campaign

•   First oil delivered from West Espoir, Okume project on track



Commenting today, Aidan Heavey, Chief Executive, said:



 'Today's record results demonstrate the quality of Tullow's portfolio and
continued growth of its business. While competition for resources, talent and
quality acreage is intense, our strategy, based on key skills and well
understood regions, has proven effective. In the short term, we remain on track
to achieve our production target of 75,000 boepd by the end of the year, while
recent exploration results in Uganda and the programmes planned in India and
Namibia provide outstanding opportunities for growth. The outlook for Tullow
remains very positive.'





Presentation, Webcast and Conference Calls



In conjunction with these results Tullow will conduct a presentation in London
and a number of events for the financial community. Details are available on
page 17 of this announcement and in the 2006 Interim Results Centre on the
Group's website at www.tullowoil.com.





Production and Development Review



The first half of 2006 has been a period of intense activity and significant
success for Tullow. The Group's strategy to develop a balanced long term oil and
gas business is showing excellent progress in each of our core areas, while our
business development efforts have added seven new licences to our portfolio,
with further additions anticipated over the remainder of the year.



Tullow has a strong track record of performance and innovation in our
operations, exploration and commercial activities, supported by strong EHS
performance. We have assembled a professional team with the skills and
experience to build on this foundation. In the short term, we remain on track to
achieve our objective of 75,000 boepd of production by year end, while recent
exploration results in Uganda and programmes planned for India and Namibia
represent outstanding opportunities for growth.



NW EUROPE: Continued Exploration and Development Success in the SNS



Tullow has steadily expanded its UK business through a combination of
acquisitions, organic developments, exploration and participation in licensing
rounds. The Group has developed a reputation as a technically innovative and
commercially astute operator and has positioned itself to take advantage of a
very favourable UK gas market.



Thames-Hewett Area

Production from the Thames-Hewett Area averaged 12,400 boepd (74 mmscfd) in the
first half of 2006.  The strategy for these mature assets has been to focus on
the control of unit operating costs through management of fixed costs and
maximisation of production, thereby extending field and infrastructure lives.



This strategy has been very effective, increasing uptime of the Tullow-operated
Hewett-Bacton assets to 98% for the period and significantly enhancing
production through the restoration of the Delilah field in March. In addition,
Tullow increased its interest in this asset to 51.68% by acquiring a further
12.87%  from Centrica in July.



In the Thames area, the development of the Thurne satellite field is progressing
well and will add approximately 30 mmscfd to Thames throughput from late 2007.
Additional satellite development opportunities are currently under review to
take full advantage of our extensive infrastructure.



In May, as winter/summer gas price differentials reached unprecedented levels,
Tullow took the decision   to shut in the Horne & Wren fields for the summer
months to permit maximum production from these    fields during the winter
period, when gas demand and prices are high.



CMS Area

Production from the CMS Area averaged 15,600 boepd (94 mmscfd) in the first half
of 2006.  In this less mature region of the Southern North Sea (SNS) our focus
has been on exploration, exploitation of near-field development opportunities,
redevelopment of the Schooner and Ketch fields and third party business.



In the first half of 2006 production from the area was 35% higher than for the
same period in 2005 through strong performance from the Murdoch D10 and McAdam
infill wells and the success of the programme of production optimisation and
redevelopment on Schooner and Ketch.



Elsewhere in the CMS area, plans are well advanced for the development of the K3
(Kelvin) discovery, made in September 2005. The Kelvin infrastructure will be an
important new hub for Tullow equity gas in the CMS area and, following the
substantial K4 discovery in June 2006, this region will be targeted with at
least two further exploration wells during 2007.



Maintenance and integrity work on Schooner and Ketch has resulted in
consistently high uptime, averaging 98% over the period. The Schooner SA-10
development well came on stream in May and combined with strong operational
performance and the ongoing well optimisation programme, field production
potential has stabilised at approximately 65mmscfd. The second development well,
Ketch KA-7, is currently being completed and is expected to commence production
in early October. Two further wells will now be drilled on the Ketch field
before the rig returns to Schooner in the second quarter of 2007.



The NW Schooner appraisal well, targeting an extension of the main Schooner
field is currently drilling through the reservoir.  If this well encounters
commercial gas, it will be brought on stream within 12 months as a one well
subsea tie-back to the Schooner platform.





Africa: Developments delivering Production Growth



In Africa, Tullow has established production and development interests in Gabon,
Cote d'Ivoire, Congo (Brazzaville), Equatorial Guinea and Namibia. In 2006, the
Group has added new projects in Angola and Ghana, each with near-term
development potential.



In line with its strategy, Tullow continues to expand its African portfolio,
building a truly pan-African business. In 2006, the Group announced the
signature of seven new licences in Congo (DRC), Angola, Ghana and Madagascar and
expects to announce participation in further new exploration and development
licences in West Africa in the coming months.



Gabon

Production from the fields in Gabon has been maintained at levels close to
16,000 bopd through a combination of effective reservoir performance and ongoing
well optimisation programmes.



Following the extensive development and appraisal programme undertaken at Niungo
in 2005, a new programme of at least eight wells commenced in early September.
The drilling programme will continue into 2007 and additional wells will be
added subject to success.



Tchatamba production has been maintained at higher than anticipated levels,
despite periodic mechanical and electrical problems at the facilities. A
thorough review of well productivity has resulted in a well optimisation
programme, which is now under way.



In the Etame licence area, gross field production is stable at over 18,000 bopd.
The development of the adjacent Avouma field is in progress with first oil
scheduled for the end of 2006, while development of the Ebouri satellite field
awaits Government approval.



The Azobe licence, where Tullow has increased its interest from 35%
(non-operated) to 60% as operator, contains a number of prospects and
undeveloped discoveries in close proximity to Gabon's Cap Lopez export terminal.
A well to appraise the Assala discovery is planned for 2007.



Congo (Brazzaville)

The four-rig development drilling programme on the M'Boundi field continues,
with over 60 wells drilled in the field to date. Average gross field production
exceeded 60,000 bopd at times during the first quarter of 2006 and production
for the full year is expected to average 55,000 bopd. The development focus has
switched to water injection to stabilise production and improve oil recovery.
Three water injection wells have been drilled and the water injection facilities
for the pilot project are expected to be operational in the fourth quarter of
2006. Since the beginning of 2006, the crude oil has been blended with the
higher quality N'Kossa blend, reducing the M'Boundi crude discount to Brent to
approximately $1-2/bbl during the period.



Equatorial Guinea

During the first half of 2006, two infill production wells and two injection
wells were drilled on the Ceiba field and gross field production averaged 36,600
bopd with a full year forecast average of 38 to 40,000 bopd. Infill drilling
will continue in order to maintain production levels throughout 2007.



The development of the Okume Complex remains on budget and on schedule for first
oil in late December 2006.  Two Tension Leg Platforms were installed on the
deepwater fields Okume, Ebano and Oveng in April along with four jackets and two
topsides on the Elon field. The next phase of facilities installation is
imminent and will include pipelines, tie backs and the central processing
facilities, while development drilling activity has commenced on the Elon field
with a shallow water jack-up rig and on the Okume field with a tender assisted
drilling unit. Initial production from Okume is expected to reach 30,000 bopd in
early 2007 building to a plateau of 60,000 bopd by the end of 2007. Oil will be
blended with Ceiba production and exported via the Ceiba FPSO, leading to
greater operating and production efficiency.



Cote d'Ivoire

2006 has seen record gross production of 39,000 boepd from East Espoir, due to a
very positive reservoir response to the pressure support and the infill drilling
programme initiated during 2005. The first West Espoir production well, WP-1,
was brought on stream in late July, however, due to downhole mechanical problems
it is currently flowing at an impaired rate and remedial action will follow. The
second West Espoir well, WP-2, has just been completed and is currently flowing
at over 5,000 bopd. A further two to three wells, of the anticipated 10 well
programme, are scheduled to be drilled during the remainder of the year. Gross
forecast production is expected to average 31,000 boepd for the year.



Additional potential in the Espoir Area is currently under review. A further
step in the appraisal of this potential will involve the WP-3 well which, in
addition to its primary development objective, will test a significant
exploration objective below the main West Espoir reservoir known as 'level
zero'.



Namibia

The Kudu gas-to-power generation project remains the key area of focus for
commercialisation of the giant Kudu gas field offshore Namibia. While technical
and operational progress in recent months has been positive, concluding the
chain of commercial agreements from the Gas Sales through to the Power Purchase
Agreements to allow the project to progress to the construction phase is
becoming the most significant challenge to the project schedule.



Tullow is committed to proving and commercialising the potentially significant
additional reserves within the greater Kudu area. Integrated geological and
seismic studies of the Kudu gas plays have led to a refined subsurface model
that provides Tullow with a deeper understanding of the upside potential of the
area and has allowed the selection of two appraisal well locations for drilling
in 2007.



The first well is planned for the Kudu East area, and if successful will open up
a multi-tcf play that will be further appraised with the second well. Each well
is expected to take approximately 70 days to drill and the programme is
scheduled to commence in March 2007.



SOUTH ASIA: Continuing to renew the South Asia Business



Tullow's production in South Asia has increased significantly in 2006 with the
start-up of gas production from the Bangora field in Bangladesh. We have made
significant progress on our Asia exploration portfolio with a number of
important regional high impact drilling programmes scheduled to commence in
2007.



Bangladesh

Tullow has been very active on Block 9 in 2006.  The appraisal of the
Bangora-Lalmai discoveries started with a 610 sq km 3D survey over the entire
structure to assist in the selection of appraisal drilling locations. The first
appraisal well (Bangora-2) successfully encountered the predicted extension of
the reservoir discovered at Bangora-1. The second appraisal well, Bangora-3, was
spudded in July and is currently being logged, having successfully encountered a
gas bearing reservoir.  A production facility has been constructed and Bangora-1
was brought on production at rates of up to 50 mmscfd, and is currently stable
at 35 mmscfd. Production potential will be significantly enhanced when Bangora-2
is tied in during September 2006.



Pakistan

Good progress has been made on the development of the Chachar gas field.  All
development wells have been drilled and completed and construction of the
production facilities is in progress. First gas production is expected in the
first quarter of 2007.





Exploration Review



Exploration Strategy



The current global oil and gas environment creates both challenges and
opportunities for an experienced independent operator such as Tullow. While
competition for resources, talent and acreage is intense, application of a
focused niche strategy based on key skills, well understood regions and core
play types has consistently proven effective.



Tullow is firmly focused on growth through exploration as a key component of a
balanced group strategy and in 2006 will spend £80 million on its worldwide
exploration activities.



Exploration Programme



Tullow has undertaken an active exploration programme in 2006, with 11 wells
drilled across its core areas. In addition, over 1,800 km of 2D seismic and
1,600 sq km of 3D seismic have been acquired and seven new licences have been
secured. Three near infrastructure gas discoveries have been made in the CMS
Area in the Southern North Sea and three important high impact oil discoveries
have been made in Uganda.



Tullow expects to participate in another four exploration wells in 2006, and a
further six wells in the first half of 2007. Of these, half will be near
infrastructure wells in the North Sea and Gabon and the other half will be
potentially high impact wells in Africa and India.



NW Europe

Since acquiring the CMS Area assets in 2001, Tullow has expanded its acreage
portfolio and developed its exploration expertise and understanding of this
region. The success of this strategy has been demonstrated by seven consecutive
discoveries, three in the first half of this year (Humphrey, Cygnus and K4) for
which potential commerciality and pre-development studies are already in
progress. Two further exploration wells are scheduled for this area during 2007.



In addition to its Southern North Sea acreage, Tullow has established a position
in two oil prospects scheduled for drilling later this year.  Tullow has agreed
to farm into the Peveril prospect in block 39/2c with a 30% interest.  This well
is scheduled for November to target an Upper Jurassic Fife Sandstone objective.
Tullow has a 6.25% interest in the Acer exploration well in Block 16/18b which
will spud in October and will target an Upper Jurassic reservoir on trend with
the Miller Field.



In Romania, the Costisa-1 well was plugged and abandoned as a dry hole, and the
EPI-3 and EPI-8 licences were relinquished.



Uganda and Congo (DRC)

Since the beginning of the year Tullow has made significant progress in proving
up a substantial new hydrocarbon province in the Albertine Basin with three oil
discoveries and two very encouraging sets of well tests in Uganda Block 2.



Tullow holds 50% working interests in Uganda Blocks 1, 2 and 3A and has recently
significantly enhanced its position in the region by acquiring interests in the
Democratic Republic of Congo (Congo (DRC)) covering the entire western portion
of Lake Albert.



Block 2

The Mputa-1 well was spudded in late 2005 and encountered oil in sandstone
reservoirs of very good quality. The Waraga-1 well was spudded in mid February
2006 and discovered oil in sandstone reservoirs of very good porosity. The
Mputa-2 well was spudded in early May, down-dip from the Mputa-1 oil discovery,
to prove up reserves and establish connectivity in the basin.



All three pay zones of the Waraga-1 well performed beyond expectation on
production test, and yielded a maximum combined flow rate of 12,000 bopd. The
Mputa-1 well has also been tested and yielded a combined maximum flow rate of
1,100 bopd from two shallower, lower pressure intervals.



The forward programme will include a 3D seismic survey in the Kaiso-Tonya area,
the region in which the Mputa and Waraga discoveries are located, to identify
optimal locations for further appraisal and infill drilling. The next well in
the 2006 programme will be the drilling of the Nzizi appraisal well adjacent to
the Mputa discovery in late November.



The Joint Venture also plans to continue its extensive exploration programme in
other parts of Block 2. In particular, following the recent completion of
aeromagnetic and gravity surveys in the Butiaba area, to the northeast of Waraga
and Mputa, a 2D seismic survey is planned in order to identify additional leads
and prospects for future drilling. In addition, we will initiate concept studies
and a selection process to determine the most effective manner in which to drill
fast-track onshore wells and offshore prospects by the end of 2007.



Following the success of the 2006 programme, opportunities to provide early
production and supply power to Ugandan domestic market are currently under
investigation. The first steps of any such development could include production
and processing facilities to fuel a local power station and/or a mini-refinery.



Block 3A

An exploration well to test the large Kingfisher structure was spudded on 15
August and is expected to take approximately three months to drill. This
high-risk prospect lies largely under Lake Albert, but can be drilled from an
onshore location. The subsequent programme for Block 3A will be determined by
the results of Kingfisher, however a number of prospects have been identified.



Congo (DRC)

In Congo (DRC), Tullow, as operator, has signed a Production Sharing Agreement
with the government to gain a 48.5% operated interest in Blocks I and II
covering both onshore and offshore acreage, immediately adjacent to Tullow's
Ugandan acreage.



We expect to commence work on these blocks in 2006 with a number of technical
studies in preparation for the acquisition of 400 km of 2D seismic data in 2007.
This seismic campaign will target potential extensions to the geological play
types already identified in the region.



Madagascar

In April, Tullow was awarded Block 3109 in the Morondava Rift Basin of
Madagascar as operator with a 50% interest. The work programme includes a 6,700
km reconnaissance aerogravity survey to aid the design of a seismic acquisition
programme



Gulf of Guinea

In Cote d'Ivoire, 750 sq km of 3D seismic data will be acquired over Blocks CI
107 and CI 108, commencing in September. The survey will target structures
analogous to the nearby Baobab and Espoir oil fields, and should suitable
prospects be identified, drilling would commence during 2008.



In Ghana, Tullow has been awarded two highly prospective offshore licences, with
an 85.5% operated interest in the Shallow Water Tano block and a 49.95% operated
interest in the Deepwater Tano block.  The Group has also concluded a farm-in
agreement to take a 22.9% interest in the adjacent West Cape Three Points
offshore licence.



The Deepwater Tano and West Cape Three Points blocks offer significant high
impact exploration potential in both the Albian and Upper Cretaceous geological
intervals. The Shallow Water Tano block contains three undeveloped oil and gas
fields and Tullow's initial aim will be to evaluate the potential to
commercialise these accumulations.



In Cameroon, approximately 200 sq km of 3D data have been acquired in the Ngosso
permit in the Rio del Rey Basin, targeting prospects in the range of 10 to 20
mmbo. Subject to rig availability, up to two exploration wells are proposed for
2007.



Pre-spud re-evaluation of the Banyan prospect in Equatorial Guinea Block L led
to Tullow successfully diluting for a full carry before the negative result and
no further work is planned on this licence.



Lower Congo Basin

In Angola, Tullow was awarded a 50% operated interest in offshore Block 1/06 in
July 2006. Proven plays in the block provide exploration upside, and plays of
possibly higher impact are now under review. The initial focus of work on the
Block will be the potential development of the existing Pitangueira and
Bananeira discoveries, located close to regional infrastructure.



In Gabon, Tullow participated in three offshore exploration wells in the first
half of 2006 without commercial success. This led to a thorough review of
exploration opportunities in Gabon, and a renewed effort to acquire interests in
a number of plays of potentially significant impact for the Group. An
exploration well is planned for mid 2007 on the Sanidine prospect in the
Kiarsseny licence, while two wells will be drilled in the Nziembou licence as
part of the wider Niungo programme.



South Asia

In India, work has commenced on Block CB-ON/1 and a 1,500 km seismic programme
is nearing completion. We anticipate that data processing and interpretation
will be completed in time to commence drilling operations in mid 2007. This
block is considered highly prospective given recent large discoveries in the
area.



In Bangladesh, Tullow conducted a shallow water seismic survey in offshore
Blocks 17 & 18 in April.  A farmout of a 60% working interest has been agreed
with Total and is currently pending approval by the Government of Bangladesh.
Joint Venture partners have applied for an extension to allow for the
acquisition of a follow-up deeper water seismic survey during the next
acquisition season.



In Pakistan, in the Kohat Block, a seismic survey was completed in April.
Processing of data is under way and it is anticipated that the first well will
be spudded in the second half of 2007. A well drilled on the Nawabshah block was
dry and Tullow has decided to relinquish the licence.



2006 Second Half Exploration Activity


      Country              Licence              Prospect             Interest            Spud Date
       Uganda              Block 3A            Kingfisher              50%                Ongoing
         UK                 16/13c                Acer                6.25%             October 2006
   Cote d'Ivoire            CI-26                ND-L0                21.33%            October 2006
         UK                 39/2c               Peveril                30%             November 2006
       Uganda              Block 2               Nzizi                 50%             December 2006





Finance Review



Tullow had a strong first half of 2006. Trading and production reached new highs
and, combined with continuing favourable oil and gas pricing, and a reduction in
oil price discount led to record profits and cash flow from operations.



Key Performance Indicators

The Group's financial performance has enabled strong results across key
performance indicators.


                                                                   1H 2006        1H2005          % Change
Production (boepd, working interest basis)                          62,800        57,350            Up 10%
Operating Cash flow before Working Capital per boe (£)               20.79         11.30            Up 84%
Cash Operating Costs per boe (£)1                                     4.85          4.38            Up 11%
Gearing (%)2                                                           17%           38%          Down 21%
Realised Oil Price per bbl ($)                                       54.42         41.73            Up 30%
Realised Gas Price (pence per therm)                                 53.33         28.82            Up 85%

1Cash operating costs are cost of sales excluding depletion, depreciation and
amortisation and under/over lift movements

2Gearing is net debt divided by net assets



Operating Performance

Working interest production averaged 62,800 boepd, while sales volumes averaged
55,400 boepd. These production figures are 10% ahead of the corresponding period
in 2005 and 7% ahead of 2005 full year production rates.



Average prices realised during the year were significantly higher than in 2005,
particularly on UK gas. The realised oil price was US$54.42/bbl (1H2005:
US$41.73/bbl) and the realised UK gas price was 53.33p/therm (1H2005: 28.82p/
therm). Tullow's oil production sold at an average discount of 4 to 5% to Brent
during the period and this level of discount is expected to continue for the
remainder of 2006. The Group also received tariff income of £8.3 million
(1H2005: £6.2 million) from use of its UK infrastructure.



The combination of the higher prices and increased volumes meant that revenue
increased 54% to    £310.7 million (1H2005: £201.4 million).


Revenue analysed by Core Area                             Oil           Gas         Total       % of Total
                                                   £ millions    £ millions    £ millions
NW Europe (UK)                                              -         168.4         168.4              54%
Africa                                                  141.3             -         141.3              46%
South Asia                                                  -           1.0           1.0                -
Total                                                   141.3         169.4         310.7
% of Total                                                46%           54%



Operating Profit before Exploration Activities amounted to £178.5 million
(1H2005: £108.4 million), up 65%, reflecting the growth in Group production and
significant increase in realised oil and gas prices.



Underlying cash operating costs, which exclude depletion, depreciation and
amortisation and movements on under/over lift, amounted to £55.1 million (£4.85/
boe).  Reported Cost of Sales before depletion, depreciation and amortisation
for the period of £59.6 million (1H2005: £65.0 million) include an adjustment of
£4.5 million (at market value) associated with overlifted volumes at 30 June
2006 and    stock movements during the period.



Depletion, depreciation and amortisation for the period amounted to £64.3
million (£5.66/boe) (1H2005: £5.82/boe).



Administrative expenses include an amount of £1.5 million (1H2005: £0.4 million)
associated with share based payments under IFRS 2.



Exploration Write-off

Exploration costs written off were £17.6 million (1H2005: £4.0 million), in
accordance with the Group's 'successful efforts' accounting policy, which
requires that all costs associated with unsuccessful exploration are written off
to the Income Statement. This write-off is principally associated with
activities in Gabon, Pakistan and Angola and new ventures during the period. The
Group drilled 11 wells in the first half of 2006, achieving six discoveries.  10
wells are planned in the next 12 months.



Hedging reflected in Income Statement (IAS 39)

At 30 June 2006 the Group's derivative instruments had a negative mark to market
value of £140.8 million, of which a large portion relates to contracts acquired
as part of the acquisition of Energy Africa in 2004.



While all of the Group's derivative instruments currently qualify for hedge
accounting, a charge of £1.7 million (credit of £0.7 million after taxation) has
been recognised in the income statement for the first half of 2006. Cumulative
hedge ineffectiveness decreased materially during the period, reflecting the
improving correlation of Tullow's hedged production, cash flows and realisations
with the hedge instruments.



Hedge Position

The Group's hedge position as at 29 August 2006 can be summarised as follows:


                                                      2H2006                  2007                  2008
Oil
Volume - bopd                                         11,717                 9,500                 7,500
Current Price Hedge - US$/bbl                          46.37                 55.10                 49.93
Gas Hedges
Volume - mmscfd                                        69.58                 31.25                 20.60
Current Price Hedge - p/therm                          43.99                 56.63                 49.45



Interest

The net interest charge for the period was £6.2 million (1H2005: £7.4 million).
The decrease reflects lower debt levels following the Group's $850 million
refinancing in 2005 combined with repayment of over £50 million of debt during
the period. Gearing remains modest and the Group has access to substantial
unused facilities.



Taxation

The tax charge of £57.7 million (1H2005: £28.3 million) relates to the Group's
North Sea, Equatorial  Guinea and Gabonese activities and represents 38% of the
Group's profit before tax (1H2005: 31%).      After adjusting for exploration
costs and non-recurring items associated with over lift, the Group's underlying
effective tax rate for the period is 33% (1H2005: 38%).



The underlying effective tax rate for the period has been favourably impacted by
amendments to the fiscal regime associated with certain of Tullow's African
interests, which have the effect of reducing Tullow's effective tax rate. These
changes are also retrospectively effective in respect of 2005 and thus give rise
to a partial reversal of prior period tax charges. The underlying effective tax
rate has however been adversely affected by the UK Government's decision to
raise the supplemental corporation tax rate for the industry to 20% from 10%
with effect from 1 January 2006.



Progressive Dividend Policy

In line with the Group's progressive dividend policy, and reflecting the cash
generated by the business and the capital investment and acquisition
opportunities available, the Board recommends an interim dividend of 2.0 pence
per share (1H2005: 1.0 pence per share). The dividend will be paid on 7 November
2006 to shareholders on the register at 29 September 2006.



Reinvestment and Capital Management

The strong pricing environment, allied to increasing production and effective
control of operating costs, led to record Operating Cash Flows before Working
Capital Movements of £236.4 million, 103% ahead of 1H2005. This cash flow
enabled the Group to invest over £150 million in exploration and development
activities, to repay over £50 million of bank loans and to double our dividend
in respect of the period.



The majority of Group capital expenditure continues to be associated with
ongoing development and production enhancement projects in the UK, Gabon, Congo
(Brazzaville), Equatorial Guinea and Cote d'Ivoire. Investment obligations in
respect of these assets will be significantly reduced in 2007 as they will all
be contributing to cashflows, however, the Group is actively pursuing new
development opportunities, particularly in West Africa. While activity levels
remain high, the cost environment, and the rig market in particular, remain
challenging and the cost and timing of capital programmes, most notably in
respect of offshore assets, are being adversely affected by market conditions.



Tullow currently anticipates a total 2006 capital expenditure of £330 million
across all assets, driving group production to a target of over 75,000 boepd by
year end.



Balance Sheet

Net assets at 30 June 2006 amounted to £440.8 million (31 December 2005: £389.0
million), the increase principally reflecting retained profits for the period of
£95.4 million.  Net assets were reduced by £2.0 million in the period due to the
movement of the hedge reserve in accordance with IAS 39. A decrease in net
assets (foreign currency translation reserve) of £25.5 million resulted from the
strengthening of Sterling against the US Dollar from US$1.72 to US$1.82 in the
period.





2006 Outlook



Today's record results demonstrate the quality of Tullow's portfolio and
continued growth of its business. While competition for resources, talent and
quality acreage is intense, our strategy, based on key skills and well
understood regions, has proven effective. In the short term, we remain on track
to achieve our production target of 75,000 boepd by the end of the year, while
recent exploration results in Uganda and the programmes planned in India and
Namibia provide outstanding opportunities for growth. The outlook for Tullow
remains very positive.



Ends





For further information contact


Tullow Oil plc                     Citigate Dewe Rogerson              Murray Consultants

+ 44 20 8996 1000                  [phone]                    [phone]
Aidan Heavey, CEO                  Martin Jackson                      Joe Murray
Tom Hickey, CFO
Chris Perry, IRO





Disclaimer

This statement 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 the Group 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. Accordingly no reliance may be
placed on the figures contained in such forward-looking statements.





Independent Review Report

To the Shareholders of Tullow Oil plc



Introduction

We have been instructed by the Company to review the financial information for
the six months ended 30 June 2006 which comprise the Group income statement,
Group statement of recognised income and expense, Group balance sheet, Group
cash flow statement and related notes 1 to 5.  We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.



This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board.  Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company, for our review work, for this report, or for the conclusions we
have formed.



Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed

We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom.  A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed.  A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions.  It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.



Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.





Deloitte & Touche LLP

Chartered Accountants

London

5 September 2006





Group Income Statement

Six months ended 30 June 2006


                                                                          6 months     6 months        Year
                                                                             ended        ended       ended
                                                                          30.06.06     30.06.05    31.12.05   
                                                                         Unaudited    Unaudited     Audited
                                                                             £'000        £'000       £'000

Sales Revenue                                                              310,720      201,434     445,232
Cost of Sales                                                            (123,880)    (125,425)   (243,149)
Gross Profit                                                               186,840       76,009     202,083
Administrative Expenses                                                    (8,331)      (7,176)    (13,793)
Disposal of Subsidiaries                                                         -       33,918      30,537
Profit on Sale of Oil and Gas Assets                                             -        5,653       5,524
Exploration Costs Written Off                                             (17,551)      (4,019)    (25,783)
Operating Profit                                                           160,958      104,385     198,568
Loss on Hedging Instruments                                                (1,678)      (5,592)       (159)
Finance Revenue                                                              3,228        2,046       4,367
Finance Costs                                                              (9,397)      (9,462)    (24,197)
Profit from Continuing Activities before Tax                               153,111       91,377     178,579
Income Tax Expense                                                        (57,667)     (28,291)    (65,443)
Profit for the Period from Continuing Activities                            95,444       63,086     113,136
Earnings per Ordinary Share                                                  Stg p        Stg p       Stg p
- Basic                                                                      14.72         9.82       17.50
- Diluted                                                                    14.42         9.69       17.15





Group Statement of Recognised Income and Expense

Six Months ended 30 June 2006


                                                                       6 months     6 months         Year
                                                                          ended        ended        ended
                                                                       30.06.06     30.06.05     31.12.05  
                                                                      Unaudited    Unaudited      Audited

                                                                          £'000        £'000        £'000
Profit for the Financial Period                                          95,444       63,086      113,136
Currency Translation Adjustments                                       (29,876)       17,314       32,447
Hedge Movement                                                          (2,048)     (81,246)    (120,449)
Total Recognised Income and Expense for the Period                       63,520        (846)       25,134





Group Balance Sheet

As at 30 June 2006


                                                                      30.06.06      30.06.05     31.12.05
                                                                     Unaudited     Unaudited      Audited
                                                                         £'000         £'000        £'000
ASSETS
Non-Current Assets
Intangible Exploration and Evaluation Assets                           186,945       136,806      160,543
Property, Plant and Equipment                                          768,600       693,749      736,563
Investments                                                                496           496          496
Total Non-Current Assets                                               956,041       831,051      897,602
Current Assets
Inventories                                                             12,473         2,445        5,141
Trade Receivables                                                       51,667        39,145       66,441
Other Current Assets                                                    21,777        24,072       26,851
Assets Held for Resale                                                       -        42,804            -
Cash and Cash Equivalents                                               67,808       122,913       65,386
Total Current Assets                                                   153,725       231,379      163,819
Total Assets                                                         1,109,766     1,062,430    1,061,421
LIABILITIES
Current Liabilities
Trade and Other Payables                                             (147,104)      (90,883)    (139,415)
Other Financial Liabilities                                            (2,447)      (23,140)            -
Income Tax Payable                                                    (28,292)      (23,183)     (25,038)
Liabilities Held for Resale                                                  -       (6,476)            -
Derivative Financial Instruments                                      (59,593)      (56,733)     (70,639)
Total Current Liabilities                                            (237,436)     (200,415)    (235,092)
Non-Current Liabilities
Trade and Other Payables                                              (11,576)      (23,245)     (19,118)
Other Financial Liabilities                                          (138,476)     (298,587)    (198,372)
Deferred Tax Liabilities                                              (97,951)      (27,236)     (51,473)
Provisions                                                           (102,344)      (82,450)     (91,139)
Derivative Financial Instruments                                      (81,220)      (83,915)     (77,208)
Total Non-Current Liabilities                                        (431,567)     (515,433)    (437,310)
Total Liabilities                                                    (669,003)     (715,848)    (672,402)
Net Assets                                                             440,763       346,582      389,019
EQUITY
Equity attributable to Equity Holders of the Parent
Called up Share Capital                                                 64,989        64,654       64,744
Share Premium                                                          124,547       122,385      123,019
Other Reserves                                                          33,083        55,774       60,589
Retained Earnings                                                      218,144       103,769      140,667
Total Equity                                                           440,763       346,582      389,019





Group Cash Flow Statement
Six Months ended 30 June 2006

                                                        Note          6 months     6 months         Year
                                                                         ended        ended        ended
                                                                      30.06.06     30.06.05     31.12.05    
                                                                     Unaudited    Unaudited      Audited  
                                                                         £'000        £'000        £'000               
                                                                                   
Cash Flows from Operating Activities
Cash Generated from Operations                             5           257,648      114,698      273,840
Income Taxes Paid                                                     (23,185)     (25,381)     (25,360)
Net Cash from Operating Activities                                     234,463       89,317      248,480
Cash Flows from Investing Activities
Disposal of Subsidiary                                                       -       58,487       57,227
Disposal of Oil and Gas Assets                                             727            -       31,769
Purchase of Intangible Exploration & Evaluation                       (40,734)     (14,356)     (69,766)
Assets
Purchase of Property, Plant and Equipment                            (111,651)    (253,061)    (298,320)
Interest Received                                                        3,229        2,081        4,359
Net Cash used in Investing Activities                                (148,429)    (206,849)    (274,731)
Cash Flows from Financing Activities
Net Proceeds from Issue of Share Capital                                 1,772          847        1,570
Debt Arrangement Fees                                                  (1,734)      (2,095)     (10,481)
Repayment of Bank Loans                                               (56,844)     (26,750)    (351,637)
Drawdown of Bank Loan                                                    5,506      191,476      390,515
Interest Paid                                                          (9,526)      (8,649)     (21,483)
Dividends Paid                                                        (19,505)            -     (14,555)
Net Cash Used in Financing Activities                                 (80,331)      154,829      (6,071)
Net Increase/(Decrease) in Cash and Cash Equivalents                     5,703       37,297     (32,322)
Cash and Cash Equivalents at Beginning of Period                        65,386       85,070       85,070
Translation Difference                                                 (3,281)          546       12,638
Cash and Cash Equivalents at end of Period                              67,808      122,913       65,386









Notes to the Interim Financial Statements

Six Months ended 30 June 2006



1.       Basis of Accounting and Presentation of Financial Information

These June 2006 interim consolidated financial statements are for the six months
ended 30 June 2006. The interim financial report has been prepared using
accounting policies consistent with International Financial Reporting Standards
(IFRS) and the accounting policies and methods of computation used in the
interim financial statements are consistent with those used in the Group 2005
annual report.



The financial information for the year ended 31 December 2005 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. A copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors' report on those accounts was not qualified
and did not contain statements under section 237(2) or (3) of the Companies Act
1985.



2.       Earnings per Share

The calculation of basic earnings per share is based on the profit for the
period after taxation of £95,444,025 (1H2005 - £63,086,455) and a weighted
average number of shares in issue of 648,423,888 (1H2005 - 642,685,021).



The calculation of diluted earnings per share is based on the profit for the
period after taxation as for basic earnings per share. The number of shares
outstanding, however, is adjusted to show the potential dilution if employee
share options are converted into ordinary shares. The weighted average number of
ordinary shares is increased by 13,525,872 (1H2005: 8,550,377) in respect of
employee share options, resulting in a diluted weighted average number of shares
of 661,949,760 (1H2005: 651,235,398).



3.       Dividends

The Company's shareholders approved a final dividend for the year ended 31
December 2005 of 3.0p per share at the Annual General Meeting on 31 May 2006.
This amount was paid on 7 June 2006 to shareholders on the register of members
of the Company on 12 May 2006.



The Board has recommended an interim 2006 dividend of 2.0p per share in the half
year to 30 June 2006 to be paid on 7 November 2006 to shareholders on the
register on 29 September 2006 (1H2005: 1.0p per share)



4.       Approval of Accounts

These interim accounts (Unaudited) were approved by the Board of Directors on 5
September 2006.



5.       Cash Flows from Operating Activities


                                                                           6 months    6 months        Year
                                                                              ended       ended       ended
                                                                           30.06.06    30.06.05    31.12.05    
                                                                          Unaudited   Unaudited     Audited
                                                                              £'000       £'000       £'000             
                                                                                       
Profit before taxation                                                      153,111      91,377     178,579
Adjustments for:
Depletion, Depreciation and Amortisation                                     64,254      60,811     119,697
Foreign Exchange Loss/(Profit)                                                1,446       (242)          72
Exploration Costs                                                            17,551       4,019      25,783
Disposal of Subsidiaries                                                          -    (33,918)    (30,537)
Profit on Disposal of Oil and Gas Assets                                          -     (5,653)     (5,524)
Operating Cash Flow before Working Capital Movements                        236,362     116,394     288,070
Increase/(Decrease) in Trade and Other Receivables                           22,589    (32,798)    (38,538)
(Increase)/Decrease in Inventories                                          (7,332)         947     (1,749)
(Decrease)/Increase in Trade Payables                                       (3,355)      16,777       4,665
Share Based Payment Charge                                                    1,537         370       1,403
Hedge Ineffectiveness                                                         1,678       5,592         159
Interest Receivable                                                         (3,228)     (2,046)     (4,367)
Finance Costs Payable                                                         9,397       9,462      24,197
Cash Generated from Operations                                              257,648     114,698     273,840



6.       Proven and Probable Reserves Summary (Working Interest Basis) (Not
         reviewed by Auditors)

                        NW EUROPE       AFRICA                 SOUTH ASIA             TOTAL
                    Oil       Gas       Oil       Gas       Oil       Gas      Oil       Gas  Petroleum
                  mmbbl       bcf     mmbbl       bcf     mmbbl       bcf    mmbbl       bcf      mmboe
Commercial
1  Jan 2006           -    356.18    112.96     23.80         -     95.26   112.96    475.24     192.15
Revisions             -     35.90    (0.01)      0.53         -      1.06   (0.01)     37.49       6.25
Acquisitions          -      4.17         -         -         -         -        -      4.17       0.70
Production            -   (29.48)    (6.06)    (0.31)         -    (1.12)   (6.06)   (30.91)    (11.22)
30 June 2006          -    366.77    106.89     24.02         -     95.20   106.89    485.99     187.88
Contingent
1 Jan 2006            -    191.40      0.70    781.20         -     16.20     0.70    988.80     165.50
Revisions             -   (14.65)      2.70      1.00         -         -     2.70   (13.65)       0.43
30 June 2006          -    176.75      3.40    782.20         -     16.20     3.40    975.15     165.93
Total
30 June 2006          -    543.52    110.29    806.22         -    111.40   110.29  1,461.14     353.81



Proven and Probable Commercial Reserves are based on a Group reserves report
produced by an independent engineer.  Proven and Probable Contingent Reserves
are based on both Tullow's estimates and the Group reserves report produced by
an independent engineer.



The Group provides for depletion, depreciation and amortisation of tangible
fixed assets on a net entitlements basis, which reflects the terms of the
Production Sharing Contracts related to each field. Total net entitlement
reserves were 159.1 mmboe at 30 June 2006 (31 December 2005: 162.2 mmboe),
calculated at $40/bbl (2005: $40/bbl). Contingent Reserves relate to reserves in
respect of which development plans are in the course of preparation or further
evaluation is under way with a view to development within the foreseeable
future.



About Tullow Oil plc
Tullow Oil plc is a leading independent oil and gas, exploration and production
group and is quoted on the London and Irish Stock Exchanges (symbol: TLW.L). The
Group has interests in over 90 production and exploration licences in 17
countries and focuses on three core areas: North West Europe, Africa and South
Asia.  For further information please consult the Group's website
www.tullowoil.com.



Events on Results Day

In conjunction with these results Tullow is conducting a London Presentation and
a number of events for the financial community.  All times are BST.



09.00 UK/European Conference Call (and simultaneous Webcast)

To access the call please dial the appropriate number below shortly before the
call and ask for the Tullow Oil plc conference call.  A replay facility will be
available from approximately noon on 6 September until 13 September.  The
telephone numbers and access codes are:


Live Event                                         Replay Facility available from Noon
UK Participants           020 7138 0827            UK Participants           020 7806 1970
Irish Participants        01 655 0485              Irish Participants        01 659 8321
Other Participants        [phone]         Other Participants        [phone]
                                                   Access Code               8251545#



To join into the live webcast, or play the on-demand version, you will need to
have either Real Player or Windows Media Player installed on your computer.



15.00 US Conference Call

To access the call please dial the appropriate number below shortly before the
call and ask for the Tullow Oil plc conference call.  A replay facility will be
available from approximately 18.00 on 6 September until 13 September.  The
telephone numbers and access codes are:


Live Event                                         Replay Facility available from 18.00
Domestic Toll Free        480 629 9562             Domestic Toll Free        303 590 3030
Toll                      020 7190 1596            Toll                      020 8515 2499
                                                   Access Code               3593556




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