REG - Tullow Oil PLC Tullow Oil PLC - FP Tullow Oil PLC - NP - Full Year Results <Origin Href="QuoteRef">TLW.L</Origin> - Part 3

Tullow OilAnnouncement

07/02/2018 07:05

- Part 3: For the preceding part double click  ID:nRSG1466Eb 

reported within finance costs as interest on
obligations under finance leases.  A receivable from Joint Venture partners of
$719.0 million has been recognised in other assets to reflect the value of
future payments that will be met by cash calls from partners. The present
value of the receivable from Joint Venture Partners unwinds over the expected
life of the lease and is reported within finance revenue. The net cash
outflows of $62.6 million related to the lease agreement since its recognition
as a finance lease have been reported in the repayment of obligations under
finance leases line in the cash flow statements. A right of use property,
plant, and equipment asset of $775.8 million was also recorded at 31 December
2017. Prior to recognition as a finance lease, it was accounted for as an
operating lease, and included as operating lease payments within cost of sales
(note 5). 
 
14.  Provisions 
 
                                          Decommissioning2017$m  Other provisions2017$m  Total2017  Decommissioning2016$m  Other provisions2016$m  Total2016  
                                                                                         $m                                                        $m         
 At 1 January                             1,014.4                144.2                   1,158.6    1,008.8                243.3                   1,252.1    
 New provisions and changes in estimates  (33.6)                 (9.2)                   (42.8)     57.1                   71.4                    128.5      
 Disposals                                (100.7)                -                       (100.7)    -                      -                       -          
 Payments                                 (33.7)                 -                       (33.7)     (23.0)                 (132.0)                 (155.0)    
 Transfer to accruals                     -                      -                       -          -                      (35.0)                  (35.0)     
 Unwinding of discount                    19.7                   -                       19.7       25.1                   -                       25.1       
 Currency translation adjustment          31.3                   -                       31.3       (53.6)                 (3.5)                   (57.1)     
 At 31 December                           897.4                  135.0                   1,032.4    1,014.4                144.2                   1,158.6    
 Current provisions                       103.2                  127.6                   230.8      49.0                   2.9                     51.9       
 Non-current provisions                   794.2                  7.4                     801.6      965.4                  141.3                   1,106.7    
 
 
Included within other provisions is provision for onerous service contracts
and provision for restructuring costs. Due to the historical reduction in
original planned future work programmes the Group identified a number of
onerous service contracts in prior years. The expected unutilised capacity has
been provided for in 2016 and 2017 resulting in an income statement credit of
$1.0 million (2016: charge of $114.9 million). 
 
The decommissioning provision represents the present value of decommissioning
costs relating to the European and African oil and gas interests. 
 
                    Inflation assumption  Discount rate assumption  Cessation of production assumption  2017   2016     
                                                                                                        $m     $m       
 Congo              n/a                   n/a                       n/a                                 -      18.3     
 Côte d'Ivoire      2%                    3%                        2026                                49.7   48.1     
 Equatorial Guinea  2%                    3%                        2028-2029                           133.9  130.0    
 Gabon              2%                    3%                        2021-2034                           55.8   54.2     
 Ghana              2%                    3%                        2034-2036                           278.0  267.6    
 Mauritania         2%                    3%                        2018                                120.7  130.9    
 Netherlands        n/a                   n/a                       n/a                                 -      100.7    
 UK                 2%                    3%                        2018-2020                           259.3  264.6    
                                                                                                        897.4  1,014.4  
 
 
15.  Commercial Reserves and Contingent Resources summary (unaudited) working
interest basis 
 
                                     West Africa  East Africa  New Ventures  TOTAL   
                                     Oilmmbbl     Gasbcf       Oilmmbbl      Gasbcf  Oilmmbbl  Gasbcf  Oilmmbbl  Gasbcf   Petroleummmboe  
 COMMERCIAL RESERVES                                                                                             
 1 January 2017                      272.1        189.7        -             -       -         -       272.1     189.7    303.7           
 Revisions                           3.2          14.3         -             -       -         -       3.2       14.3     5.5             
 Transfer from contingent resources  -            79.0         -             -       -         -       -         79.0     13.2            
 Disposals                           -            -            -             -       -         -       -         -        -               
 Production                          (29.6)       (14.1)       -             -       -         -       (29.6)    (14.1)   (31.9)          
 31 December 2017                    245.7        268.9        -             -       -         -       245.7     268.9    290.5           
 CONTINGENT RESOURCES                                                                                            
 1 January 2017                      128.1        730.5        632.5         42.7    -         4.2     760.6     773.2    890.1           
 Revisions                           (0.2)        (186.4)      -             -       -         -       (0.2)     (186.4)  (31.3)          
 Additions                           1.7          -            5.3           -       -         -       7.0       -        7.0             
 Disposals                           (8.2)        -            -             -       -         -       (8.2)     -        (8.2)           
 Transfers to commercial reserves    -            (79.0)       -             -       -         -       -         (79.0)   (13.2)          
 31 December 2017                    121.4        465.1        637.8         42.7    -         4.2     759.1     507.8    844.4           
 TOTAL                                                                                                                                    
 31 December 2017                    367.1        734.0        637.8         42.7    -         4.2     1,004.8   776.7    1,134.9         
 
 
1.   Proven and Probable Commercial Reserves are as audited and reported 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, with the exception
of minor assets contributing less than 5% of the Group's reserves. 
 
2.   Proven and Probable Contingent Resources are as audited and reported by
an independent engineer. Resources estimates are reviewed by the independent
engineer based on significant new data received following exploration or
appraisal drilling. 
 
3.   The West Africa revisions to reserves (+5 mmboe) relate mainly to audits
of Jubilee, TEN, Okume and Echira. 
 
4.   The Kenya addition to oil contingent resources relates to the booking of
the Erut discovery announced 17 January 2017. The West Africa addition to oil
contingent resources relates to Simba. 
 
5.   The West Africa revision to gas contingent resources relates to a
reduction in the estimate of the size of the Gas cap in Ntomme and reduction
of injected gas blow-down volume for Jubilee. 
 
6.   The West Africa transfer of gas from contingent resources to reserves
relates to Jubilee sales gas. 
 
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 284.1
mmboe at 31 December 2017 (31 December 2016: 283.2 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 future development. 
 
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). The
Group has interests in 90 exploration and production licences across 16
countries which are managed as three business delivery teams: West Africa,
East Africa and New Ventures. 
 
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 
 
To access the call please dial the appropriate number below shortly before the
call and ask for the Tullow Oil plc conference call. The telephone numbers and
access codes are: 
 
 Live event                               
 All participants    +44 (0)330 336 9411    
 UK Freephone        0800 279 7204          
 Access Code         7292383                
 
 
Webcast 
 
To join the live video webcast or play the on-demand version, please use this
link: https://edge.media-server.com/m6/p/xzdogikb.   The replay will be
available from noon on 7 February 2018. 
 
FOR FURTHER INFORMATION, CONTACT: 
 
 Tullow Oil plc (London)+44 20 3249 9000Chris Perry / Nicola Rogers (Investors)George Cazenove / Anna Brog (Media)  Murray Consultants (Dublin) +353 1 498 0300Pat WalshJoe Heron  
 
 
Follow Tullow on: 
 
Twitter: www.twitter.com/TullowOilplc 
 
YouTube: www.youtube.com/TullowOilplc 
 
Facebook: www.facebook.com/TullowOilplc 
 
LinkedIn: www.linkedin.com/company/Tullow-Oil 
 
Website: www.tullowoil.com 
 
This information is provided by RNS
The company news service from the London Stock Exchange