2011 Annual Report PDF - Tullow Oil plc

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BUILDING A WELL FUNDED BALANCE SHEET FINANCE & PORTFOLIO MANAGEMENT Strategic priority: Manage financial and business assets to enhance our portfolio, replenish upside potential and support the Group’s funding needs. Our financial strategy is to maintain a well funded balance sheet to enable growth through exploration, development and acquisitions. We utilise a range of funding sources including debt, equity, operating cash flow and portfolio management. Tullow’s appetite for funding is very significant and growing. 2012 capital expenditure is forecast to be approximately $2 billion. Over a period of time capital expenditure is split approximately 50:50 between Exploration & Appraisal and Development & Operations. In any given year it will depend on our investment priorities, which are based on a rigorous approach to capital allocation. The key principle of Tullow’s financial management is to achieve a good balance between high-impact exploration campaigns and world-class developments that have strong near-term momentum in growing production. Another key element of our growth is portfolio management, an area where we have built up a strong track record and considerable expertise. There are opportunities to reorganise our existing portfolio and consolidate our assets through divestment. We are also well positioned to continue to create value through acquisitions. Opportunities include adding new big oil plays to our portfolio, increasing an existing equity interest to material levels or enhancing our production profile. Capital and acquisition expenditure ($m) 3,000 2,500 2,000 1,500 1,000 500 0 07 08 09 10 11 Capital expenditure Acquisition expenditure 20 Tullow Oil plc 2011 Annual Report and Accounts: Special feature
21 www.tullowoil.com
Page 1 and 2: Tullow Oil plc 2011 Annual Report a
Page 3 and 4: Contents BUSINESS REVIEW Tullow had
Page 5 and 6: 4 2011 highlights 2011 was a very g
Page 7 and 8: Sales revenue $2.3 BILLION 2010: $1
Page 9 and 10: 1 WEST & NORTH AFRICA SOUTH & EAST
Page 11 and 12: In Ghana, we have experienced techn
Page 13 and 14: More information Page Strong organi
Page 15 and 16: CLEAR VISION SPECIAL FEATURE TO BE
Page 17 and 18: 1 Exploration & appraisal 7 Shared
Page 19 and 20: EXPLORATION & APPRAISAL Strategic p
Page 21: DELIVERING MATERIAL PRODUCTION GROW
Page 25 and 26: RISK MANAGEMENT Strategic priority:
Page 27 and 28: SUSTAINING OUR GOOD REPUTATION 25 w
Page 29 and 30: 27 www.tullowoil.com
Page 31 and 32: CREATING SHARED PROSPERITY 29 www.t
Page 33 and 34: Key Performance Indicators MEASURIN
Page 35 and 36: More information Page Long-term per
Page 37 and 38: Financial results and KPI summary 2
Page 39 and 40: Operating cash flow Higher producti
Page 41 and 42: Capital market relationships Tullow
Page 43 and 44: Regional business management units
Page 45 and 46: LONG-TERM PERFORMANCE RISKS We grou
Page 47 and 48: 1 Operational risk continued Key de
Page 49 and 50: 48 2011 operations overview Overall
Page 51 and 52: 2 OPERATIONS REVIEW Europe, South A
Page 53 and 54: DEVELOPMENT & OPERATIONS A new scal
Page 55 and 56: Senior Drilling Supervisor with tra
Page 57 and 58: Mauritania & Senegal Production fro
Page 59 and 60: periods for Kasamene, Wahrindi, Kig
Page 61 and 62: 2 West African and South American e
Page 63 and 64: 62 Creating shared prosperity Creat
Page 65 and 66: More information Page Special featu
Page 67 and 68: Social performance standards We are
Page 69 and 70: 3 The effect of Uncontrolled Releas
Page 71 and 72: 3 Future talent pool In October 201
Page 73 and 74:
3 LOCAL CONTENT Creating real oppor
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3 Key corporate responsibility poli
Page 77 and 78:
76 Chairman’s introduction At Boa
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4 In order to provide the human and
Page 81 and 82:
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
Page 93 and 94:
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
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Group cash flow statement Year ende
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The principal accounting policies a
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5 Finance costs of debt are allocat
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5 Commercial reserves estimates (no
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5 Note 2. Business combinations On
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5 Europe, South America and Asia $m
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5 Non-current assets by origin Ghan
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5 Note 6. Staff costs The average m
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5 The Group’s profit before taxat
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5 Note 12. Property, plant and equi
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5 Note 13. Investments 2011 $m 2010
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5 Note 18. Trade and other payables
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5 The $3.5 billion Reserves Based L
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5 Note 20. Financial instruments Fi
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5 Oil and gas prices The Group uses
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5 Financial derivatives The Group i
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5 Deferred tax assets are recognise
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5 Note 27. Share-based payments 200
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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
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Notes to the Company financial stat
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5 Note 6. Bank loans Current Short-
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5 Note 9. Shareholders’ funds Sha
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2010 Share Option Plan (2010 SOP) a
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5 Note 13. Subsequent events Since
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Commercial reserves and contingent
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Area Tullow Licence Fields sq km in
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Licence / Blocks Fields Area sq km
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Contacts Secretary & registered off
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K Kenya 6, 7, 57 Key financial metr
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M mmbbl mmboe mmscfd MoU MTM Millio
Page 183 and 184:
This report is printed on Heaven 42
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2011 Annual Report PDF - Tullow Oil plc

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