Press Relase/ Webtorial

7 July 2010 – Tullow Oil plc (“Tullow”) announces that the Government of Uganda has approved the sale by Heritage Oil & Gas Limited (“HOGL”) of its 50% interest in Blocks 1 and 3A in Uganda to Tullow’s subsidiary, Tullow Uganda Limited (“Tullow Uganda”), subject to conditions outlined in a Heritage Oil Plc release issued today and reproduced below. Separately, Tullow Uganda has also received approval from the Government for its farmdown to CNOOC and Total, subject to certain routine conditions that Tullow intends to discuss with the Government in due course.

ENDS

FOR FURTHER INFORMATION CONTACT:

Tullow Oil plc
(+44 20 8996 1000)
Ian Springett
Chris Perry
James Arnold

Citigate Dewe Rogerson
(+44 207 638 9571)
Martin Jackson
George Cazenove

Murray Consultants
(+353 1 498 0300)
Joe Murray
Ed Micheau

Heritage Oil Plc (LSE: HOIL), an independent upstream exploration and production company issues an update on Heritage Oil & Gas Limited’s (“HOGL”) disposal of its entire interests in Block 1 and Block 3A (the “Assets”) in Uganda.

HIGHLIGHTS
-The Government of the Republic of Uganda (“Government”) has provided conditional consent for the disposal of the Assets in Uganda
– The transaction is expected to complete within five working days following finalisation with Government of a mechanism, including arbitration, for dealing with any taxes lawfully payable from the disposal of the Assets
– Heritage has received advice that the disposal of the Assets is not taxable in Uganda
– On completion of the transaction Heritage will receive US$1.35 billion in cash from Tullow Uganda Limited, with deferred consideration of up to US$150 million in cash or an interest in a mutually agreed asset
– Following completion of the transaction Heritage will provide an update on the proposed dividend

In accordance with the Petroleum Exploration and Production Act Cap 150, Mr. Hilary Onek, Minister of Energy & Mineral Development, has given consent to Heritage’s disposal of the Assets. This consent is conditional on HOGL demonstrating to Government that it will pay any taxes on demand which may arise from the disposal of the Assets.

In a separate letter Mr. Kabagambe-Kaliisa, Permanent Secretary to the Ministry of Energy & Mineral Development, advised that if HOGL was to resolve the tax matter by arbitration in London, then such arbitration would be on the basis that HOGL deposit approximately US$121.5 million, representing 30% of the disputed amount of US$404,925,000 with the Uganda Revenue Authority and provide a bank guarantee for the balance. As announced on 17 June 2010 Heritage previously proposed to Government the option of arbitration in London.

Heritage’s position, based on comprehensive advice from leading tax experts in Uganda, the United Kingdom and North America, is that the disposal of the Assets is not taxable in Uganda. Heritage is considering Government’s response and will update the market in due course.

For more information: http://www.tullowoil.com/

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