REG - Tullow Oil PLC - 2014 Half-yearly Results <Origin Href="QuoteRef">TLW.L</Origin> - Part 2
06/09/2014 22:35
- Part 2: For the preceding part double click ID:nRSd6731Na
Current liabilities
Trade and other payables (1,095.7) (1,017.1) (1,041.1)
Borrowings (157.9) (115.2) (159.4)
Current tax liabilities (101.0) (112.9) (165.5)
Derivative financial instruments (47.8) (27.2) (48.1)
Liabilities directly associated with assets classified as held for sale (20.9) (38.6) (18.2)
(1,423.3) (1,311.0) (1,432.3)
Non-current liabilities
Trade and other payables (28.4) (134.5) (29.4)
Borrowings (2,958.2) (2,046.1) (1,995.0)
Derivative financial instruments (39.0) (5.3) (28.3)
Provisions (976.9) (627.0) (989.2)
Deferred tax liabilities (1,697.3) (1,659.4) (1,588.0)
(5,699.8) (4,472.3) (4,629.9)
Total liabilities (7,123.1) (5,783.3) (6,062.2)
Net assets 5,248.7 5,520.3 5,446.4
EQUITY
Called up share capital 147.0 146.7 146.9
Share premium 605.0 590.5 603.2
Foreign currency translation reserve (154.5) (196.2) (155.1)
Hedge reserve 1.3 8.4 2.3
Other reserves 740.9 740.9 740.9
Retained earnings 3,820.3 4,116.4 3,984.7
Equity attributable to equity holders of the parent 5,160.0 5,406.7 5,322.9
Non-controlling interest 88.7 113.6 123.5
Total equity 5,248.7 5,520.3 5,446.4
*Certain numbers shown above do not correspond to the 2013 Half-yearly report
as a result of a retrospective restatement as set out in note 14.
Condensed consolidated statement of changes in equity
As at 30 June 2014 Share Capital$m Share Premium$m Foreign currency translationreserve$m Hedgereserve$m Other Reserves* $m Retained Earnings$m Total$m Non-controlling interest$m TotalEquity$m
At 1 January 2013 146.6 584.8 (167.8) (6.5) 740.9 3,931.2 5,229.2 92.4 5,321.6
Profit for the period - - - - - 292.2 292.2 21.2 313.4
Hedges, net of tax - - - 14.9 - - 14.9 - 14.9
Currency translation adjustments - - (28.4) - - - (28.4) - (28.4)
Issue of employee share options 0.1 5.7 - - - - 5.8 - 5.8
Vesting of PSP shares - - - - - (2.9) (2.9) - (2.9)
Share-based payment charge - - - - - 22.6 22.6 - 22.6
Dividends paid - - - - - (126.7) (126.7) - (126.7)
At 30 June 2013 146.7 590.5 (196.2) 8.4 740.9 4,116.4 5,406.7 113.6 5,520.3
Loss for the period - - - - - (123.2) (123.2) 25.9 (97.3)
Hedges, net of tax - - - (6.1) - - (6.1) - (6.1)
Currency translation adjustments - - 41.1 - - - 41.1 - 41.1
Issue of employee share options 0.2 12.7 - - - - 12.9 - 12.9
Vesting of PSP shares - - - - - (9.8) (9.8) - (9.8)
Share-based payment charge - - - - - 42.0 42.0 - 42.0
Dividends paid - - - - - (40.7) (40.7) - (40.7)
Distribution to non-controlling interests - - - - - - - (16.0) (16.0)
At 31 December 2013 146.9 603.2 (155.1) 2.3 740.9 3,984.7 5,322.9 123.5 5,446.4
Loss for the period - - - - - (75.3) (75.3) (19.8) (95.1)
Hedges, net of tax - - - (1.0) - - (1.0) - (1.0)
Currency translation adjustments - - 0.6 - - - 0.6 - 0.6
Issue of employee share options 0.1 1.8 - - - - 1.9 - 1.9
Vesting of PSP shares - - - - - (0.1) (0.1) - (0.1)
Share-based payment charge - - - - - 32.0 32.0 - 32.0
Dividends paid - - - - - (121.0) (121.0) - (121.0)
Distribution to non-controlling interests - - - - - - - (15.0) (15.0)
At 30 June 2014 147.0 605.0 (154.5) 1.3 740.9 3,820.3 5,160.0 88.7 5,248.7
*Other reserves comprise Merger Reserve and Treasury Shares.
Condensed consolidated cash flow statement
Six months ended 30 June 2014
Note 6 months ended 30.06.14Unaudited$m 6 months ended 30.06.13Unaudited$m Year ended 31.12.13 Audited$m
Cash flows from operating activities
(Loss)/profit before taxation (28.9) 486.2 313.2
Adjustments for:
Depletion, depreciation and amortisation 324.1 323.0 591.9
Impairment loss 7.9 7.3 52.7
Exploration costs written off 402.2 176.0 870.6
Loss/(profit) on disposal of intangible assets 114.8 - (29.5)
Decommissioning expenditure (1.1) (4.8) (6.7)
Share based payment charge 20.4 14.8 41.3
Loss/(gain) on hedging instruments 18.0 (11.5) 19.7
Finance revenue (7.3) (7.3) (43.7)
Finance costs 54.5 32.1 91.6
Operating cash flow before working capital movements 904.6 1,015.8 1,901.1
(Increase)/decrease in trade and other receivables (234.8) (78.2) 75.8
Decrease/(increase) in inventories 11.5 0.1 (28.9)
Increase in trade payables 44.9 92.7 49.6
Cash generated from operations 726.2 1,030.4 1,997.6
Income taxes paid (161.6) (290.8) (252.3)
Net cash flow from operating activities 564.6 739.6 1,745.3
Cash flows from investing activities
Disposal of subsidiaries (0.8) - 41.4
Disposal of intangible exploration & evaluation assets 7 (36.1) - 38.2
Disposal of oil and gas assets - - 0.7
Purchase of subsidiaries - (392.8) (392.8)
Purchase of intangible exploration & evaluation assets (664.4) (473.3) (1,268.5)
Purchase of property, plant and equipment (531.1) (373.3) (740.8)
Finance revenue 3.1 5.9 34.3
Net cash used in investing activities (1,229.3) (1,233.5) (2,287.5)
Cash flows from financing activities
Net proceeds from issue of share capital 1.9 2.9 6.0
Debt arrangement fees (22.0) (0.9) (13.5)
Repayment of bank loans (642.7) - (1,236.5)
Drawdown of bank loan 936.8 900.8 1,447.7
Issue of senior notes 650.0 - 650.0
Repayment of obligations under finance leases (1.1) - (3.3)
Finance costs (63.2) (55.1) (103.5)
Dividends paid (121.0) (126.7) (167.4)
Distribution to minority shareholders (15.0) - (16.0)
Net cash generated by financing activities 723.7 721.0 563.5
Net increase in cash and cash equivalents 59.0 227.1 21.3
Cash and cash equivalents at beginning of period 352.9 330.2 330.2
Cash transferred to held for sale - 1.7 0.6
Translation difference (1.0) 1.2 0.8
Cash and cash equivalents at end of period 410.9 560.2 352.9
Notes to the half-yearly financial statements
Six months ended 30 June 2014
1. General information
The Condensed financial statements for the six month period ended 30 June 2014
have been prepared in accordance with International Accounting Standard (IAS)
34 Interim Financial Reporting and the requirements of the Disclosure and
Transparency Rules (DTR) of the Financial Conduct Authority (FCA) in the
United Kingdom as applicable to interim financial reporting.
The Condensed financial statements represent a 'condensed set of financial
statements' as referred to in the DTR issued by the FCA. Accordingly, they do
not include all of the information required for a full annual financial report
and are to be read in conjunction with the Group's financial statements for
the year ended 31 December 2013, which were prepared in accordance with
International Financial Reporting Standards (IFRS) adopted for use by the
European Union (EU). The Condensed financial statements are unaudited and do
not constitute statutory accounts as defined in section 434 of the Companies
Act 2006. The financial information for the year ended 31 December 2013 does
not constitute statutory accounts as defined in section 434 of the Companies
Act 2006. This information was derived from the statutory accounts for the
year ended 31 December 2013, a copy of which has been delivered to the
Registrar of Companies. The auditor's report on these accounts was
unqualified, did not include a reference to any matters to which the auditor
drew attention by way of an emphasis of matter and did not contain a statement
under sections 498 (2) or (3) of the Companies Act 2006.
2. Accounting policies
The annual financial statements of Tullow Oil plc are prepared in accordance
with IFRSs as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report have been prepared in
accordance with International Accounting Standard 34 'Interim Financial
Reporting', as adopted by the European Union and the Disclosure and
Transparency Rules of the Financial Services Authority.
Basis of preparation
The condensed set of financial statements included in this half-yearly
financial report have been prepared on a going concern basis as the Directors
consider that the Group has adequate resources to continue in operational
existence for the foreseeable future as explained in the Finance Review.
In 2013, a number of new standards and interpretations became effective as
noted in the 2013 Annual report and accounts (page 130). The adoption of these
standards and interpretations has not had a material impact on the financial
statements of the Group. Since the 2013 Annual report and accounts was
published no significant new standards and interpretations have been issued.
The following new and revised standards that impact Tullow became effective
during 2014:
· IFRS 10 Consolidated Financial Statements
· IFRS 11 Joint Arrangements
· IFRS 12 Disclosure of Interests in Other Entities
· IAS 28 (revised) Investment in Associates and Joint Ventures
The adoption of these standards has not had a material impact on the financial
statements of the Group.
3. Earnings per share
The calculation of basic earnings per share is based on the loss attributable
to equity shareholders of $75.3 million (1H 2013: $292.2 million, profit) and
a weighted average number of shares in issue of 910.2 million (1H 2013: 907.9
million).
The calculation of diluted earnings per share is based on the profit for the
period after taxation as for basic earnings per share. The number of shares
outstanding, however, is adjusted to show the potential dilution if employee
share options are converted into ordinary shares. The weighted average number
of ordinary shares is increased by 1.8 million (1H 2013: 0.9 million) in
respect of employee share options, resulting in a diluted weighted average
number of shares of 912.0 million (1H 2013: 908.8 million).
4. Dividends
The Company's shareholders approved a final dividend for the year ended 31
December 2013 of 8p per share at the Annual General Meeting on 30 April 2014.
This amount was paid on 9 May 2014 to shareholders on the register of members
of the Company on 4 April 2014.
The Board has declared an interim 2014 dividend of 4p per share in the half
year to 30 June 2014 to be paid on 3 October 2014 to shareholders on the
register on 29 August 2014 (1H 2013: 4p per share).
5. Approval of Accounts
These unaudited half-yearly financial statements were approved by the Board of
Directors on 29 July 2014.
6. Segmental reporting
Information reported to the Group's Chief Executive Officer for the purposes
of resource allocation and assessment of segment performance is focused on the
three geographical regions within which the Group operates. The Group has one
class of business, being the exploration, development, production and sale of
hydrocarbons and therefore the Group's reportable segments under IFRS 8 are
West and North Africa; South and East Africa; and Europe, South America and
Asia. The following tables present revenue, profit and certain asset and
liability information regarding the Group's business segments for the six
months ended 30 June 2014 and 2013 and for the year ended 31 December 2013.
Six months ended 30 June 2014 West and North Africa$m South and East Africa$m Europe, South America and Asia$m Unallocated$m Total$m
Sales revenue by origin 1,099.3 - 165.3 - 1,264.6
Segment result 434.7 (29.9) (130.8) (2.9) 271.1
Loss on disposal (114.8)
Unallocated corporate expenses (120.0)
Operating profit 36.3
Loss on hedging instruments (18.0)
Finance revenue 7.3
Finance costs (54.5)
Loss before tax (28.9)
Income tax expense (66.2)
Loss after tax (95.1)
Total assets 6,306.1 2,486.4 3,271.3 308.0 12,371.8
Total liabilities (2,126.7) (331.6) (1,807.5) (2,857.3) (7,123.1)
Other segment information
Capital expenditure:
Property, plant and equipment 526.6 1.7 14.6 29.7 572.6
Intangible fixed assets 164.9 335.8 203.4 - 704.1
Depletion, depreciation and amortisation (235.8) (0.1) (73.9) (14.3) (324.1)
Impairment losses recognised in income statement (6.4) - (1.5) - (7.9)
Exploration costs written off (227.1) (29.9) (145.2) - (402.2)
Unallocated expenditure and net liabilities include amounts of a corporate
nature and not specifically attributable to a geographic area and the Group
debt.
6. Segmental reporting (continued)
Six months ended 30 June 2013 West and North Africa$m South and East Africa$m Europe, South America and Asia$m Unallocated$m Total$m
Sales revenue by origin 1,139.7 - 207.3 - 1,347.0
Segment result 670.1 (4.1) (72.6) (5.3) 588.1
Unallocated corporate expenses (88.6)
Operating profit 499.5
Gain on hedging instruments 11.5
Finance revenue 7.3
Finance costs (32.1)
Profit before tax 486.2
Income tax expense (172.8)
Profit after tax 313.4
Total assets 5,463.9 2,464.5 3,078.2 297.0 11,303.6
Total liabilities (1,578.2) (293.7) (1,819.6) (2,091.8) (5,783.3)
Other segment information
Capital expenditure:
Property, plant and equipment 358.7 0.2 57.5 24.2 440.6
Intangible fixed assets 78.7 242.3 216.7 - 537.7
Depletion, depreciation and amortisation (227.2) (0.2) (84.2) (11.4) (323.0)
Impairment losses recognised in income statement - - (7.3) - (7.3)
Exploration costs written off (60.4) (4.1) (111.5) - (176.0)
Year ended 31 December 2013 West and North Africa$m South and East Africa$m Europe, South America and Asia$m Unallocated$m Total$m
Sales revenue by origin 2,247.5 - 399.4 - 2,646.9
Segment result 1,285.5 (339.6) (376.1) - 569.8
Profit on disposal 29.5
Unallocated corporate expenses (218.5)
Operating profit 380.8
Loss on hedging instruments (19.7)
Finance revenue 43.7
Finance costs (91.6)
Profit before tax 313.2
Income tax expense (97.1)
Profit after tax 216.1
Total assets 5,940.4 2,173.3 3,212.0 182.9 11,508.6
Total liabilities (1,943.6) (276.4) (1,771.6) (2,070.6) (6,062.2)
Other segment information
Capital expenditure:
Property, plant and equipment 876.7 2.3 164.2 27.2 1,070.4
Intangible fixed assets 262.9 570.0 669.8 - 1,502.7
Depletion, depreciation and amortisation (425.5) (0.5) (142.2) (23.7) (591.9)
Impairment losses recognised income statement - - (52.7) - (52.7)
Exploration costs written off (113.4) (334.9) (422.3) - (870.6)
6. Segmental reporting (continued)
Sales revenue 6 months ended 30.06.14Unaudited$m Sales revenue 6 months ended 30.06.13Unaudited$m Sales revenueYear ended 31.12.13 Audited$m Non-current assets30.06.14Unaudited$m Non-current assets 30.06.13Unaudited$m Non-current assets31.12.13 Audited$m
Ghana 736.3 626.9 1,245.3 3,720.6 3,194.5 3,439.3
Equatorial Guinea 139.6 168.4 311.4 323.8 275.7 336.4
Gabon 164.2 251.1 493.5 369.5 350.1 330.8
Other 59.2 93.3 197.3 768.4 698.4 853.3
Total West and North Africa 1,099.3 1,139.7 2,247.5 5,182.3 4,518.7 4,959.8
Uganda - - - 1,303.5 1,826.1 1,205.5
Other - - - 603.9 434.8 394.7
Total South and East Africa - - - 1,907.4 2,260.9 1,600.2
Netherlands 55.9 72.2 137.9 854.1 825.3 869.5
Norway 5.1 5.6 11.2 1,129.5 1,047.4 985.1
Other 104.3 129.5 250.3 848.4 717.5 861.2
Total Europe, South America and Asia 165.3 207.3 399.4 2,832.0 2,590.2 2,715.8
Unallocated - - - 178.7 147.3 163.5
Total 1,264.6 1,347.0 2,646.9 10,100.4 9,517.1 9,439.3
7. Loss on disposal
On completion of the Ugandan farm down in 2012, Tullow recognised $341.3
million of discounted contingent consideration due from Total and CNOOC as a
non-current receivable. The amount of contingent consideration recoverable is
dependent on the timing of the receipt of certain project approvals. Delays in
receipt of the project approvals will result in a decrease on a straight-line
basis of the amount recoverable.
During 2014 management have reassessed the likely date of receipt and have
revised their best estimate from 1H 2014 to year end 2014. Management has
exercised judgement in determining what event will trigger receipt of the
contingent consideration and when this will occur. The judgement has been
based on the progress of ongoing discussions with Government and Partners. Due
to the contractual clauses associated with the contingent consideration a
change to estimated date of receipt from 1H 2014 to year end 2014 reduces the
amount receivable resulting in a reduction of the discounted amortised
contingent consideration to $289.1 million, triggering a 2014 income statement
charge of $77.8 million which has been classified as a loss on disposal.
During 2014 the Group has made a payment of $36.6 million in respect of
consideration adjustments granted on the farm down of Tullow's interest in
Uganda and received $0.5 million in respect of certain Norwegian licence
disposals. The Uganda payment has been charged to the income statement as a
loss on disposal.
8. Intangible exploration and evaluation assets
6 months ended 30.06.14Unaudited$m *Restated6 months ended 30.06.13Unaudited$m Year ended 31.12.13 Audited$m
Opening balance 4,148.3 2,977.1 2,977.1
Acquisition of subsidiaries - 593.3 593.3
Additions 704.1 537.7 1,502.7
Disposals - (8.2) (8.6)
Amounts written off (402.2) (176.0) (865.5)
Write-off associated with Norway contingent consideration** (37.7) - (41.2)
Transfer to property, plant and equipment - (2.7) (2.7)
Currency translation adjustments (6.4) (24.1) (6.8)
Closing balance 4,406.1 3,897.1 4,148.3
*Certain numbers shown above do not correspond to the 2013 Half-yearly report
due to a retrospective restatement as set out in note 14.
** Charged against balance sheet provision.
8. Intangible exploration and evaluation assets (continued)
6 months ended 30.06.14Unaudited$m 6 months ended 30.06.13Unaudited$m Year ended 31.12.13 Audited$m
Exploration costs written off (402.2) (176.0) (870.6)
Associated deferred tax credit 109.2 31.0 173.9
Net exploration costs written off (293.0) (145.0) (696.7)
During the first half of 2014 the Group spent $0.5 billion on exploration and
appraisal, including Norway exploration costs on a post tax basis and has
written off $139.3 million in relation to this expenditure. This included net
write-offs in relation to current year expenditure in Norway ($13.0 million),
Mauritania ($67.9 million) and Ethiopia ($28.4 million) and new venture costs
were $21.4 million. In addition the Group has written off $153.7 million in
relation to prior years expenditure and fair value adjustments as a result of
licence relinquishments and changes in expected near-term work programmes.
This included write-offs in Norway ($15.1 million), Mauritania ($78.2 million)
and Côte d'Ivoire ($55.6 million).
9. Other assets
6 months ended 30.06.14Unaudited$m 6 months ended 30.06.13Unaudited$m Year ended 31.12.13 Audited$m
Non-current
Contingent consideration receivable - 353.4 -
Recoverable security due from Heritage Oil and Gas Limited - 283.0 -
Uganda VAT recoverable 50.6 50.6 50.6
Norwegian tax receivable 155.9 77.1 -
Other non-current assets 20.0 - 18.1
226.5 764.1 68.7
Current
Contingent consideration receivable 291.7 - 358.1
Amounts due from joint venture partners 421.0 276.3 367.2
Underlifts 7.0 38.7 30.8
Prepayments 147.7 28.7 99.3
VAT recoverable 51.3 11.5 7.9
Other current assets 131.6 138.4 81.1
1,050.3 493.6 944.4
As at 30 June 2014, $291.7 million has been recorded as a current receivable
(1H 2013: $353.4 million, non-current) in respect of contingent consideration
due on the 2012 Ugandan farm down. The carrying value represents a receivable
due of $370.2 million discounted to the estimated due date to reflect the
credit risk of the counterparties and the time value of money, less an
impairment recognised in 2014 (note 7). The unwinding of the discount has been
accounted for as finance revenue.
In the second half of 2013 Tullow was successful in an action against Heritage
Oil and Gas Ltd and received payment of $345.8 million in August 2013, which
included receipt of the $313.0 million due and $32.8 million of interest,
which was recorded as finance revenue in 2013. The Group had previously
provided for $30.0 million in respect to the $313.0 million. On 20 September
2013, the Court of Appeal granted Heritage permission to appeal the judgment.
The appeal hearing was heard in May 2014. On 23 July 2014 Tullow received
judgment from the Court of Appeal which ruled in Tullow's favour on all but
one of the points appealed by Heritage. This point relates to part of one of
Tullow's indemnity claims and required Tullow to repay to Heritage
approximately $2.5 million plus interest. In all other respects the Court of
Appeal has upheld the High Court's judgment.
10. Taxation
The tax charge of $66 million (1H 2013: $173 million) relates to the Group's
North Sea, Gabon, Equatorial Guinea and Ghana production activities. After
adjusting for exploration write-offs, the related deferred tax benefit and the
loss on disposal, the Group's underlying effective tax rate is 37% (1H 2013:
35%).
11. Capital structure
In the six months ended 30 June 2014, the Group issued 0.4 million (1H 2013:
0.6million) new shares in respect of employee share options.
As at 30 June 2014 the Group had in issue 910.4 million allotted and fully
paid ordinary shares of Stg 10 pence each (1H 2013: 908.3 million).
12. Contingent liabilities
30.06.14Unaudited$m 30.06.13Unaudited$m 31.12.13 Audited$m
Performance guarantees 338.1 149.8 183.5
Uganda CGT 265.0 399.0 399.0
Recoverable security received from Heritage Oil and Gas Limited 9 - 345.8 345.8
Other contingent liabilities 6.5 6.5 6.5
609.6 901.1 934.8
In October 2010, the Uganda Revenue Authority (URA) issued an assessment of
$476 million in respect of capital gains tax (CGT) on the farm-down of
Tullow's Ugandan interests to Total and CNOOC. This assessment was
subsequently reduced to $473 million. In February 2011, Tullow commenced its
appeal of the URA's assessment before the Ugandan Tax Appeals Tribunal (TAT).
At completion of the farm-down, $142 million was paid by Tullow to the URA,
being 30% of the tax assessed as required under Ugandan law for Tullow to be
able to dispute the assessment. The URA's assessment denied relief for costs
incurred by the Group in the normal course of developing the assets, and
excluded certain contractual and statutory reliefs from CGT that the Group
maintains are properly allowable.
In October 2013, Tullow commenced international arbitration proceedings before
the International Centre for Settlement of Investment Disputes (ICSID) against
the Government of Uganda in relation to the URA's failure, in making their
assessment, to apply a tax exemption in the Production Sharing Agreement for
Exploration Area 2 (EA2 PSA) which, Tullow contends, relieves Tullow from
paying any CGT in relation to the farm-down of its interests in the EA2 PSA.
On 16 July 2014, the TAT issued their ruling and calculated Tullow's CGT
liability for the farm-downs, including certain reliefs, to be $407 million,
of which $142 million has already been paid by Tullow. On 18 July 2014, Tullow
filed a notice to appeal the TAT ruling before the Ugandan High Court. Tullow
has also commenced an application before the Ugandan High Court to stay
enforcement of the TAT ruling pending the outcome of the Ugandan High Court
appeal. The Group is also considering making a provisional measures
application to the international arbitration tribunal which would seek to
delay enforcement of the EA2 portion of the TAT judgment pending the outcome
of the international arbitration. Pending the outcome of such stay application
and, if made, such provisional measures application, it is not possible to
determine when or indeed whether the TAT ruling will be enforced and so no
provision has been made for payment of the TAT ruling at this stage.
Based on external legal advice, it is probable that Tullow will be successful
in the international arbitration. In the event that the TAT ruling is enforced
against Tullow, this would mean that the Group would record a receivable due
from the URA equivalent to the amount Tullow expects to successfully claim
pursuant to the international arbitration. However, management have determined
that there is a possible chance (less than 50% but greater than 5%) that the
international arbitration will not award in Tullow's favour and therefore the
Group has disclosed a contingent liability for this potential loss.
Performance guarantees are in respect of abandonment obligations, committed
work programmes and certain
financial obligations.
13. Subsequent events
Since the balance sheet date Tullow has continued its exploration, development
and business growth strategies.
14. Retrospective restatement
The fair values of the identifiable assets and liabilities of the Spring
acquisition were reassessed in the second half of 2013, to reflect additional
information which has become available concerning conditions that existed at
the date of acquisition, in accordance with the provisions of IFRS 3 -
Business Combinations. Adjustments made to previously reported fair values
have been retrospectively restated. The principal fair value adjustments are
in respect of intangible exploration and appraisal assets and property plant
and equipment as a result of the finalisation of an independent review of
acquired commercial reserves and contingent resources.
14. Retrospective restatement (continued)
The impact on the 2013 Half-yearly report is summarised in the below table,
there is no income statement impact of the retrospective restatement.
Previously stated 6 monthsended 30.06.13Unaudited$m Adjustment to business combination fair values$m Restated6 monthsended30.06.13Unaudited$m
Effect on balance sheet:
Intangible exploration and evaluation assets 3,868.9 28.2 3,897.1
Property, plant and equipment 4,523.3 (28.2) 4,495.1
Non-current assets 9,517.1 - 9,517.1
Total assets 11,303.6 - 11,303.6
Total equity 5,520.3 - 5,520.3
15. Commercial Reserves and Contingent Resources Summary (not reviewed by
Auditors)
working interest basis
West and South and Europe, South TOTAL
North Africa East Africa America and Asia
Oil mmbbl Gasbcf Oil mmbbl Gas bcf Oil mmbbl Gas bcf Oil mmbbl Gas bcf Petroleum mmboe
COMMERCIAL RESERVES
1 Jan 2014 326.0 175.9 - - 1.3 154.6 327.3 330.5 382.4
Revisions 0.8 - - - - 0.2 0.8 0.2 0.8
Production (11.2) (1.2) - - (0.1) (15.2) (11.3) (16.4) (14.0)
30 June 2014 315.6 174.7 - - 1.2 139.6 315.5 314.3 369.2
CONTINGENT RESOURCES
1 Jan 2014 105.5 1,228.4 519.3 363.0 108.2 168.7 733.0 1,760.1 1,026.4
Revisions - - - - - 0.5 - 0.5 0.1
30 June 2014 105.5 1,228.4 519.3 363.0 108.2 169.2 733.0 1,760.6 1,026.5
TOTAL
30 June 2014 421.1 1,403.1 519.3 363.0 109.4 308.8 1,048.5 2,074.9 1,395.7
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.
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 336.3
mmboe at 30 June 2014 (30 June 2013: 335.8 mmboe).
Contingent Resources relate to resources in respect of which development plans
are in the course of preparation or further evaluation is under way with a
view to development within the foreseeable future.
About Tullow Oil plc
Tullow is a leading independent oil & gas, exploration and production group,
quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW) and is
a constituent of the FTSE 100 Index. The Group has interests in over 140
exploration and production licences across 21 countries which are managed as
three regional business units: West & North Africa, South & East Africa and
Europe, South America and Asia.
EVENTS ON THE DAY
In conjunction with these results Tullow is conducting a London Presentation
and a number of events for the financial community.
09.00 GMT - UK/European conference call (and simultaneous video webcast)
To access the call please dial the appropriate number below shortly before the
call and ask for the Tullow Oil plc conference call. A replay facility will be
available from approximately noon on 30 July until 6 August. The telephone
numbers and access code are:
Live event Replay facility available from Noon
UK local number +44 (0) 20 3427 1912 UK Participants +44 (0) 20 3427 0598
UK Freephone 0800 279 5004 Irish Participants +353 1 486 0902
Irish Participants +353 1 4860 921 Access Code 7116186
To join the live video webcast, or play the on-demand version which will be
available from 1pm on 30 July, you will need to have either Real Player or
Windows Media Player installed on your computer.
11.00 GMT - Press Conference Call
To access the call please dial the appropriate number below shortly before the
call and use the access code. The telephone numbers and access code are:
UK Toll Free 0808 109 0700 International Participants +44 (0) 20 3003 2666
UK Local Call 020 3003 2666 USA Toll Free +1 866 966 5335
Ireland Toll Free 1 800 930 488 Access code 7502919
15:00 GMT - US Conference Call
To access the call please dial the appropriate number below shortly before the
call and ask for the Tullow Oil plc conference call.
Live Event
Domestic Toll Free +1877 280 2296 Access code 3266602
Toll +1718 354 1152
FOR FURTHER INFORMATION CONTACT:
Tullow Oil plc (London)(+44 20 3249 9000)Chris Perry (Investor Relations)James Arnold (Investor Relations)George Cazenove (Media Relations) Citigate Dewe Rogerson(London) (+44 207 638 9571) Martin JacksonShabnam Bashir Murray Consultants (Dublin)(+353 1 498 0300) Pat WalshJoe Heron
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