2011 Annual Report PDF - Tullow Oil plc

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Five year financial summary 2011 $m *Restated 2010 $m *Restated 2009 $m 2008 $m *Restated 2007 $m Group income statement Sales revenue 2,304.2 1,089.8 915.9 1,310.6 1,279.5 Cost of sales (930.8) (584.1) (608.0) (687.3) (708.0) Gross profit 1,373.4 505.7 307.9 623.3 571.5 Administrative expenses (122.8) (89.6) (77.6) (79.2) (63.3) Profit/(loss) on disposal of subsidiaries – – 16.0 395.6 (1.2) Profit on disposal of oil and gas assets – 0.5 4.9 57.8 – Profit on disposal of other assets 2.0 – – – – Exploration costs written off (120.6) (154.7) (82.7) (419.0) (128.5) Operating profit 1,132.0 261.9 168.5 578.5 378.5 Profit/(loss) on hedging instruments 27.2 (27.7) (59.8) 66.6 (58.7) Finance revenue 36.6 15.1 2.1 7.3 6.2 Finance costs (122.9) (70.1) (60.8) (87.5) (97.4) Profit from continuing activities before taxation 1,072.9 179.2 50.0 564.9 228.6 Taxation (383.9) (89.7) (1.9) (135.7) (123.3) Profit for the year from continuing activities 689.0 89.5 48.1 429.2 105.3 Earnings per share Basic – ¢ 72.5 8.1 5.4 58.8 14.2 Diluted – ¢ 72.0 8.0 5.3 58.1 13.9 Dividends paid 114.2 79.2 75.3 80.9 78.9 Group balance sheet Non-current assets 9,461.7 7,077.0 4,372.8 3,524.0 3,689.8 Net current (liabilities)/assets (360.2) (150.2) 139.9 (215.4) (134.8) Total assets less current liabilities 9,101.5 6,926.8 4,512.7 3,308.6 3,555.0 Long-term liabilities (4,335.5) (3,023.4) (2,064.2) (1,414.7) (2,131.7) Net assets 4,766.0 3,903.4 2,448.5 1,893.9 1,423.3 Called up equity share capital 146.2 143.5 130.1 119.7 117.4 Share premium 551.8 251.5 242.3 231.1 178.0 Other reserves 551.1 574.2 614.5 607.8 541.9 Retained earnings 3,441.3 2,873.6 1,419.5 898.6 555.0 Equity attributable to equity holders of the parent 4,690.4 3,842.8 2,406.4 1,857.2 1,392.3 Non-controlling interest 75.6 60.6 42.1 36.7 31.0 Total equity 4,766.0 3,903.4 2,448.5 1,893.9 1,423.3 * The 2007 comparatives have been restated due to an asset held for sale being reclassified during 2008. The 2009 and 2010 comparatives have been restated due to a change in the inventory accounting policy. 168 Tullow Oil plc 2011 Annual Report and Accounts
Commercial reserves and contingent resources summary (unaudited) working interest basis Year ended 31 December 2011 West and North Africa Oil mmbbl Gas bcf South and East Africa Oil mmbbl Gas bcf Europe, South America and Asia Oil mmbbl Gas bcf Oil mmbbl Total Gas bcf Petroleum mmboe Commercial reserves 1 January 2011 245.9 22.0 – – 1.7 258.5 247.6 280.5 294.4 Revisions 8.1 (0.8) – – – 8.7 8.1 7.9 9.4 Acquisitions 9.0 – – – 0.1 79.4 9.1 79.4 22.3 Additions – – – – – – – – – Production (20.6) (2.2) – – (0.2) (43.9) (20.8) (46.1) (28.5) 5SUPPLEMENTARY INFORMATION 31 December 2011 242.4 19.0 – – 1.6 302.7 244.0 321.7 297.6 Contingent resources 1 January 2011 120.7 798.1 772.5 301.7 – 98.9 893.2 1,198.7 1,093.1 Revisions 2.6 (7.0) 14.3 79.3 – – 16.9 72.3 29.0 Acquisitions 25.1 393.3 – – – 94.0 25.1 487.3 106.3 Additions 60.3 146.4 113.7 – 36.6 – 210.6 146.4 235.0 Disposals (18.2) – – – – – (18.2) – (18.2) 31 December 2011 190.5 1,330.8 900.5 381.0 36.6 192.9 1,127.6 1,904.7 1,445.2 Total 31 December 2011 432.9 1,349.8 900.5 381.0 38.2 495.6 1,371.6 2,226.4 1,742.8 1 Proven and Probable Commercial Reserves are based on a Group reserves report produced by an independent engineer. Reserves estimates for each field are reviewed by the independent engineer based on significant new data or a material change with a review of each field undertaken at least every two years. 2 Proven and Probable Contingent Resources are based on both Tullow’s estimates and the Group reserves report produced by an independent engineer. 3 The Europe, South America and Asia commercial and contingent resources acquisition in 2011 relates to the purchase of the Nuon assets from the Vattenfall Group. 4 The West and North Africa Asia commercial and contingent resources acquisition in 2011 relates to the purchase of EO Group Limited Ghanaian interests and increased equity levels in Mauritania. 5 The total Commercial Reserves and Contingent Resources of 1,742.8 mmboe at 31 December 2011 include Tullow’s working interest in Blocks 1, 2 and 3A in Uganda pre completion of the farm-down transaction. Post completion of the farm-down, total Commercial Reserves and Contingent Resources are expected to reduce to 1,139.0 mmboe. The Group provides for depletion 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 260.6 mmboe at 31 December 2011 (31 December 2010: 231.6 mmboe). Contingent Resources relate to resources in respect of which development plans are in the course of preparation or further evaluation is underway with a view to development within the foreseeable future. 169 www.tullowoil.com
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Tullow Oil plc 2011 Annual Report a
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Contents BUSINESS REVIEW Tullow had
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4 2011 highlights 2011 was a very g
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Sales revenue $2.3 BILLION 2010: $1
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1 WEST & NORTH AFRICA SOUTH & EAST
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In Ghana, we have experienced techn
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More information Page Strong organi
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CLEAR VISION SPECIAL FEATURE TO BE
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1 Exploration & appraisal 7 Shared
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EXPLORATION & APPRAISAL Strategic p
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DELIVERING MATERIAL PRODUCTION GROW
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21 www.tullowoil.com
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RISK MANAGEMENT Strategic priority:
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SUSTAINING OUR GOOD REPUTATION 25 w
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27 www.tullowoil.com
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CREATING SHARED PROSPERITY 29 www.t
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Key Performance Indicators MEASURIN
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More information Page Long-term per
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Financial results and KPI summary 2
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Operating cash flow Higher producti
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Capital market relationships Tullow
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Regional business management units
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LONG-TERM PERFORMANCE RISKS We grou
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1 Operational risk continued Key de
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48 2011 operations overview Overall
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2 OPERATIONS REVIEW Europe, South A
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DEVELOPMENT & OPERATIONS A new scal
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Senior Drilling Supervisor with tra
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Mauritania & Senegal Production fro
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periods for Kasamene, Wahrindi, Kig
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2 West African and South American e
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62 Creating shared prosperity Creat
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More information Page Special featu
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Social performance standards We are
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3 The effect of Uncontrolled Releas
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3 Future talent pool In October 201
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3 LOCAL CONTENT Creating real oppor
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3 Key corporate responsibility poli
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76 Chairman’s introduction At Boa
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4 In order to provide the human and
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I am delighted to have taken on the
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Board of Directors EXPERIENCED LEAD
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4 CORPORATE GOVERNANCE Ann Grant No
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Audit planning and update on releva
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Directors in their place. On 12 May
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CONTENTS 89 Introduction 89 Remuner
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Remuneration mix The pay structure
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2011 PSP grant policy Executive Num
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Service agreements Each Executive D
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4 Directors’ interests in the sha
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4 Deferred Share Bonus Plan (DSBP)
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Attendance at meetings The attendan
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BOARD PERFORMANCE EVALUATION 4 CORP
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Executive team. In 2012, Tullow pla
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Company’s assets in whole or in p
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All employees are helped and encour
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As part of our Code of Business Con
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Independent Auditor’s Report to t
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Group balance sheet As at 31 Decemb
Page 119 and 120: Group cash flow statement Year ende
Page 121 and 122: The principal accounting policies a
Page 123 and 124: 5 Finance costs of debt are allocat
Page 125 and 126: 5 Commercial reserves estimates (no
Page 127 and 128: 5 Note 2. Business combinations On
Page 129 and 130: 5 Europe, South America and Asia $m
Page 131 and 132: 5 Non-current assets by origin Ghan
Page 133 and 134: 5 Note 6. Staff costs The average m
Page 135 and 136: 5 The Group’s profit before taxat
Page 137 and 138: 5 Note 12. Property, plant and equi
Page 139 and 140: 5 Note 13. Investments 2011 $m 2010
Page 141 and 142: 5 Note 18. Trade and other payables
Page 143 and 144: 5 The $3.5 billion Reserves Based L
Page 145 and 146: 5 Note 20. Financial instruments Fi
Page 147 and 148: 5 Oil and gas prices The Group uses
Page 149 and 150: 5 Financial derivatives The Group i
Page 151 and 152: 5 Deferred tax assets are recognise
Page 153 and 154: 5 Note 27. Share-based payments 200
Page 155 and 156: 5 UK & Irish Share Incentive Plans
Page 157 and 158: Independent Auditor’s Report to t
Page 159 and 160: Company balance sheet As at 31 Dece
Page 161 and 162: Notes to the Company financial stat
Page 163 and 164: 5 Note 6. Bank loans Current Short-
Page 165 and 166: 5 Note 9. Shareholders’ funds Sha
Page 167 and 168: 2010 Share Option Plan (2010 SOP) a
Page 169: 5 Note 13. Subsequent events Since
Page 173 and 174: Area Tullow Licence Fields sq km in
Page 175 and 176: Licence / Blocks Fields Area sq km
Page 177 and 178: Contacts Secretary & registered off
Page 179 and 180: K Kenya 6, 7, 57 Key financial metr
Page 181 and 182: M mmbbl mmboe mmscfd MoU MTM Millio
Page 183 and 184: This report is printed on Heaven 42
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