Tullow Oil plc Annual Report 2011 - The Group

Chief Executive’s review continuedExcellent long-term total shareholder returnTullow has created significant shareholder value and deliveredtotal shareholder return of 389% over five years to the endof 2010, outperforming the FTSE 350 oil and gas sector as acomparator index by 351%. In 2011, the share price wasimpacted by a number of issues. The global economy weakenedduring the year creating greater market uncertainty andinstability. The longer time frame for completion of the Ugandantransactions and disappointment over deferred production fromGhana also had an effect. Despite this, total shareholder returnfor 2011 was 12%, compared with a negative 2% return for theFTSE 100 for the same period. The resilience of our investmentproposition and the high regard in which Tullow is heldrecognises, in my view, our consistent and clear strategyand the Group’s ability to continue to add value.Evolving as the leading global independentIn this year’s ‘special feature’, starting on the next page, weillustrate how we are establishing a distinctive competitiveadvantage and evolving into the leading global independentexploration and production company with a solid financialfoundation differentiated from our E&P peers by high-impactexploration-led growth. The Group has a unique explorationinventory which is focused on frontier areas and concentrateson specific core regions and geological plays. Our multi-basinopportunities are complemented by a series of majordevelopment projects. Material growth in production andcash flow gives us the ability to fund aggressive exploration anddevelopment programmes as well as deliver returns toshareholders via a growing dividend. We are managing thisdiversified mix of exploration, development and productionassets to create a world-class resource portfolio.Pat Plunkett retired as Chairmanof Tullow at the end of 2011.He joined the Board in 1998 andbecame Chairman in 2000. Hepresided over an extraordinaryperiod of growth in the Group’shistory and was one of the keyarchitects of Tullow today.He ably led and guided the Boardas we moved swiftly through aseries of major acquisitions,doubled in size every two years,achieved industry-leadingexploration success and builtAfrica’s leading independent oilcompany; breaking many recordsalong the way and transformingthe Group.I would like to thank Pat for hiswonderful contribution to Tullowand wish him and his family allthe very best for the future.Only the scale has changedTullow‘s core strategy is unchanged. We are still focused onconsistently growing our reserves and production, balancingquality high-impact exploration with development, pursuingselective acquisitions and ensuring rigorous capital allocationand portfolio management. What has changed is the scale of thebusiness and the game-changing opportunities we have topursue. In 2012, we expect significant progress in Ghana andUganda as we grow Jubilee production and progress the JubileePhase 1A, TEN and Lake Albert developments. We have a veryexciting exploration programme ahead of us to open new basins,and we expect to extend our reach in Africa and elsewhere alongthe Atlantic Margins with major new partnerships. With manyopportunities for growth, 2012 promises to be another excellentyear for Tullow.Aidan HeaveyChief Executive OfficerPat Plunkett12Tullow Oil plc 2011 Annual Report and Accounts