Tullow Oil plc Annual Report 2011 - The Group

Notes to the Group financial statements continuedYear ended 31 December 2011Note 19. Financial liabilities continuedLiquidity riskThe Group manages the liquidity requirements by the use of both short- and long-term cash flow projections, supplemented bymaintaining debt financing plans and active portfolio management. Ultimate responsibility for liquidity risk management restswith the Board of Directors, which has built an appropriate liquidity risk management framework for the management of theGroup’s short-, medium- and long-term funding and liquidity management requirements.The Group closely monitors and manages its liquidity risk. Cash forecasts are regularly produced and sensitivities run fordifferent scenarios including, but not limited to, changes in commodity prices, different production rates from the Group’sportfolio of producing fields and delays in development projects. In addition to the Group’s operating cash flows, portfoliomanagement opportunities are reviewed to potentially enhance the financial capacity and flexibility of the Group. The Group’sforecasts, taking into account reasonably possible changes as described above, show that the Group will be able to operatewithin its current debt facilities and have significant financial headroom for the 12 months from the date of approval of the 2011Annual Report and Accounts.The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreedrepayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on theearliest date on which the Group can be required to pay.Weightedaverageeffectiveinterest rateLess than1 month$m1-3months$m3 monthsto 1 year$m31 December 2011Non-interest bearing 0% 81.3 86.4 395.7 8.8 5.2 577.4Variable interest rate instruments 4.3% 11.5 22.9 327.5 3,198.7 – 3,560.6Total 92.8 109.3 723.2 3,207.5 5.2 4,138.01-5years$m5+years$mTotal$mWeightedaverageeffectiveinterest rateLess than1 month$m1-3months$m3 monthsto 1 year$m31 December 2010Non-interest bearing 0% 100.4 188.5 15.4 30.4 – 334.7Finance lease liability 14% 4.5 14.3 43.8 232.5 401.2 696.3Variable interest rate instruments 4.7% 7.9 16.3 400.9 2,256.7 – 2,681.8Total 112.8 219.1 460.1 2,519.6 401.2 3,712.81-5years$m5+years$mTotal$mWeightedaverageeffectiveinterest rateLess than1 month$m1-3months$m3 monthsto 1 year$m31 December 2009Non-interest bearing 0% 163.3 54.5 13.1 – – 230.9Finance lease liability 2.8% – – 4.6 4.6 – 9.2Variable interest rate instruments 4.7% 5.4 11.0 49.0 1,247.5 343.2 1,656.1Total 168.7 65.5 66.7 1,252.1 343.2 1,896.21-5years$m5+years$mTotal$m142Tullow Oil plc 2011 Annual Report and Accounts