2011 Annual Report PDF - Tullow Oil plc

Notes to the Group financial statements continued
Year ended 31 December 2011
Note 6. Bank loans continued
The Company is exposed to floating rate interest rate risk as entities in the Group borrow funds at floating interest rates.
The Group hedges its floating rate interest rate exposure on an ongoing basis through the use of interest rate derivatives,
namely interest rate swaps, interest rate collars and interest rate caps. The mark-to-market position of the Group’s interest
rate portfolio as at 31 December 2011 was $7.2 million out of the money (2010: $13.6 million out of the money). The interest rate
hedges are included in the fixed rate debt in the above table.
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the reporting
date are net liabilities of $163.8 million (2010: net liabilities of $164.0 million).
Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in the US dollar. The Company measures its market risk exposure by running
various sensitivity analyses including 20% favourable and adverse changes in the key variables. The sensitivity analyses include
only outstanding foreign currency denominated monetary items and adjust their translation at the period end for a 20% change
in foreign currency rates.
As at 31 December 2011, a 20% increase in foreign exchange rates against the US dollar would have resulted in a decrease in
foreign currency denominated liabilities of $27.3 million (2010: $27.3 million) and a 20% decrease in foreign exchange rates
against the US dollar would have resulted in an increase in foreign currency denominated liabilities and equity of $32.8 million
(2010: $32.8 million).
Note 7. Loans from subsidiary undertakings
Amounts falling due after more than one year
Loans from subsidiary companies 1.1 1.1
The amounts due from subsidiaries do not accrue interest. All loans from subsidiary companies are not due to be repaid within
five years.
Note 8. Called up equity share capital and share premium account
Allotted equity share capital and share premium
Equity share
capital allotted
and fully paid
Number
2011
$m
Share
capital
$m
2010
$m
Share
premium
$m
At 1 January 2010 804,313,976 130.1 242.3
Issues during the year
– Exercise of share options 1,918,305 0.3 7.1
– New shares issued 82,004,589 13.1 2.1
At 1 January 2011 888,236,870 143.5 251.5
Issues during the year
– Exercise of share options 3,009,637 0.5 14.8
– New shares issued 13,668,742 2.2 285.5
At 31 December 2011 904,915,249 146.2 551.8
The Company does not have an authorised share capital.
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Tullow Oil plc 2011 Annual Report and Accounts