News Release

Tullow Oil Wins case against Heritage

14 June 2013 – Tullow Oil plc (Tullow) is pleased to announce that Tullow Uganda Limited, its Ugandan subsidiary, has received judgment in its favour in the proceedings against Heritage Oil and Gas Ltd and Heritage Oil Plc (together ‘Heritage’) in the High Court in London (Case No: 2011 Folio 471).

In 2010, Tullow agreed to acquire Heritage’s Ugandan assets pursuant to a Sale and Purchase Agreement (SPA).  The Uganda Revenue Authority (URA) designated Tullow Uganda Limited as agent in relation to this transaction which required Tullow to pay, on Heritage’s behalf, US$313 million to the URA.  This sum was the outstanding Capital Gains Tax that the Ugandan Government claimed from Heritage in respect of the transaction.  Tullow sought an indemnity from Heritage under the SPA in respect of this US$313 million payment to the URA.

In his judgment, Mr. Justice Burton found in favour of Tullow’s indemnity claim for US$313 million in its entirety and also dismissed Heritage’s counterclaim.  A further hearing will be scheduled in due course to address matters arising from the judgment such as the amount of interest Heritage owes Tullow on the US$313 million and Tullow’s submissions in respect of payment of its costs by Heritage.

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Notes to Editors

Tullow Oil plc

Tullow is a leading independent oil & gas, exploration and production group, quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW) and is a constituent of the FTSE 100 Index. The Group has interests in over 150 exploration and production licences across 25 countries which are managed as three regional business units: West & North Africa, South & East Africa and Europe, South America and Asia.

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Further Notes

1. What has happened today?

Tullow has won its case against Heritage in the High Court in London.

In his judgement Mr. Justice Burton found in favour of Tullow’s indemnity claim for US$313 million in its entirety and also dismissed Heritage’s counterclaim.

1. What was the case about?

In 2010, Tullow agreed to acquire Heritage’s Ugandan assets pursuant to a Sale and Purchase Agreement (SPA).  The Uganda Revenue Authority (URA) designated Tullow Uganda Limited as agent in relation to the transaction which required Tullow to pay, on Heritage’s behalf, US$313 million to the URA. This sum was the outstanding Capital Gains Tax that the URA claimed from Heritage in respect of the transaction. Tullow sought an indemnity from Heritage under the SPA in respect of this US$313 million payment to the URA.

1. What happens now?

The next step will involve a further hearing at which Mr Justice Burton will consider certain consequential matters arising from the judgment, such as the amount of interest Heritage owes Tullow on the US$313 million and the allocation of the costs of the proceedings.

1. When will this further hearing take place?

It is hoped that the further hearing will be fixed as soon as possible.  We are not in a position to assess when Mr Justice Burton will have availability to hear the parties on consequential matters.

1. What happened at the handing-down of the judgment on Friday, then?

The handing-down on Friday did not involve submissions by the parties.  Counsel did not attend, the parties were not represented, and Mr Justice Burton merely issued his judgment formally into the public domain.

1. What will happen in relation to the Escrow Funds?

In July 2010, when Tullow agreed to acquire Heritage’s Ugandan assets, Tullow agreed with Heritage to pay US$283 million into an escrow account.  This was intended to cover the outstanding amount of capital gains tax that the Ugandan Revenue Authority sought, at the time, from Heritage.  These funds remain in escrow.

During the proceedings, Tullow undertook, if suitable directions could be agreed and provided to the escrow agent, to permit Heritage to satisfy any judgment in part from the amount held in the escrow account.

1. What did the Judge say about Tullow and its witnesses?

Mr. Justice Burton said: “There were the two witnesses from the Claimant Company, Mr Martin and Mr Inch, together with Mr Kabatsi, Senior Partner of KAA…I listened to Mr Martin cross-examined for 3½ days and Mr Inch for the best part of 3.  I have thought long and hard about this, but I must record my conclusion that I found them both impressive and honourable witnesses, doing their best to give their recollections and a true account…I concluded that Mr Martin and Mr Inch were both impressive witnesses.”

Mr. Justice Burton added, “I found Mr Kabatsi a persuasive and impressive witness, not surprisingly given the high office which he had held in Uganda.”

1. What did Mr. Justice Burton say about the corruption allegations against Tullow referred to in the press?

During the trial, on 20 March 2013, Leading Counsel for Heritage expressly disavowed any allegations of corruption against Tullow.  Mr Justice Burton did not find that Tullow had engaged in any corrupt activities.  Indeed, he was clearly impressed by the conduct, bearing and testimony of our two witnesses (as indicated above).  On the last day of the trial, an article in the Daily Telegraph containing these false allegations was pointed out to Mr Justice Burton and his response was as follows:

“I have to say I was very disturbed to see the Daily Telegraph report…I can’t understand how their libel reader didn’t pick it up and stop it. There was absolutely no question of it being true or indeed, as far as I am concerned, privileged. It seems to me to go way outside anything that was said in this courtroom and anyone here from the Daily Telegraph should be ashamed of themselves for allowing it to be published. I trust that if there are any journalists here today they will take a great deal more care.”