Annual Financial Report

RNS Number : 1042K

Tullow Oil PLC

13 April 2010

 

13 April 2010

Tullow Oil plc ("Tullow" or the "Company")

Annual Report and Accounts and Notice of Annual General Meeting

Following the release on 10 March 2010 of the Company's preliminary full year results announcement for the year ended 31 December 2009 (the "Preliminary Announcement"), the Company announces it has published its Annual Report and Accounts for 2009 (the "Annual Report and Accounts").

The Company's 2010 AGM will be held at Haberdashers' Hall, 18 West Smithfield, London EC1A 9HQ on Wednesday 12 May 2010 at 12 noon.

Copies of the Annual Report and Accounts and the Notice of the Annual General Meeting 2010 are available to view on the Company's website:www.tullowoil.com.

In accordance with Disclosure and Transparency Rule 6.3.5(2)(b) additional information is set out in the appendices to this announcement.

The Preliminary Announcement included a set of condensed financial statements and a fair review of the development and performance of the business and the position of the Company and the group.

Pursuant to Listing Rule 9.6.1, two copies of each of the Annual Report and Accounts, the Notice of the Annual General Meeting 2010 and the form of proxy in relation to the Annual General Meeting 2010 are being submitted to the UK Listing Authority. These documents are also being submitted to the Irish Stock Exchange.  These documents will shortly be available for inspection at the Document Viewing Facilities of the UK Listing Authority which is situated at:

Financial Services Authority

25 The North Colonnade
Canary Wharf
London E14 5HS

and of the Irish Stock Exchange which is situated at:

Irish Stock Exchange
28 Anglesea Street
Dublin 2
Ireland

In addition, two copies of the "Year in Review" for the year ended 31 December 2009 have been submitted to the UK Listing Authority and the Irish Stock Exchange. The "Year in Review" has been sent to those shareholders who no longer receive a hard copy of the Annual Report and Accounts.

The Notice of Annual General Meeting 2010 includes a resolution to adopt new Articles of Association. A copy of the proposed new Articles of Association has also been forwarded to the UK Listing Authority and the Irish Stock Exchange in accordance with Disclosure and Transparency Rule 6.1.2. The proposed material changes which are to be made to the current Articles of Association are explained in the Notice of Annual General Meeting 2010.

Appendices

Appendix A: Directors' responsibility statement

The following directors' responsibility statement is extracted from the Annual Report and Accounts (page 106).

Directors' responsibility statement required by DTR4.1.12R

We confirm that to the best of our knowledge:

·      The financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

·      The management report, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the Board

Aidan Heavey                                        Ian Springett

Chief Executive Officer                            Chief Financial Officer

9 March 2010                                        9 March 2010

Appendix B: A description of the principal risks and uncertainties that the Company faces

The following description of the principal risks and uncertainties that the Company faces is extracted from the Annual Report and Accounts (pages 62 to 65).

Tullow groups risk into strategic, financial, operational and external risks. A risk analysis outlining key risks facing Tullow together with their potential impact and the mitigation strategies developed is contained below:

Strategic Risk

Impact: Ineffective or poorly executed strategy fails to create shareholder value or fails to meet shareholder expectations.

Risk	Mitigation
Strategy fails to meet shareholder expectations	Strategy focused on delivering Ghana and Uganda developments and a selective high-impact exploration programme. Effective communication with all stakeholders based on uniform, open and transparent dialogue.
Loss of key staff and succession planning	An open, engaging and empowering culture, career potential, and remuneration policies to attract and retain staff. Succession planning, specific development and training policies and the continuing success of the Group.

Financial risk

Impact: Asset performance and excessive leverage results in the Group being unable to meet its financial obligations.

Risk	Mitigation
Insufficient liquidity, inappropriate financing strategy	Prudent approach to debt and equity with a balance maintained through refinancing and equity placing. Regular Board review and approval for financing options. Short- and long-term cash forecasts reported to senior management and Board monthly. Maintenance of strong banking and equity relationships.
Cost and capital discipline	Comprehensive annual budgeting process covering all expenditure approved by the Board. Executive management approval required for major categories of expenditure effectively managing capital allocation. Monthly reporting versus budget with variance analysis.

Operational risk

Impact: Operational event impacting staff, contractors, communities or the environment leading to loss of reputation and/or revenue.

Risk	Mitigation
EHS failures and security incident	EHS performance standards set and monitored regularly across the Group through performance reporting. EHS management system implemented. Clear policies and procedures supported by strong leadership accountability and commitment throughout the organisation.
Key development failure	Technical, financial and Board approval for all projects and dedicated project teams established. Risk evaluation and progress reporting initiated for all projects. Project milestone KPI's established for Ghana and Uganda.
Sustained exploration failure	Board approval of E&A programme. Finding cost per barrel and high-grading of the Group's portfolio measuring success of exploration spend, reported monthly to Board. Use of appropriate technologies and technical excellence in exploration methodologies.

External risk

Impact: The overall external political, industry or market environment may negatively impact on the Group's ability to independently grow and manage its business.

Risk	Mitigation
Corporate responsibility*	Consistent ethical standards established and applied through code of business conduct and contract and procurement procedures. Developing and maintaining successful relationships with governments and communities. Regular review of compliance requirements with periodic Board reporting.
Oil gas price volatility	Hedging strategy agreed by Board, monthly reporting of hedging activity.
Hostile acquisition	Robust defence strategies against hostile acquisitions. Effective investor engagement and ongoing open honest and transparent communications programmes.

* Includes corruption or reputation risk, political risk and fiscal change and corporate governance failings.

Appendix C: Related party transactions

The following related party transactions are extracted from the Annual Report and Accounts (page 142).

The Directors of Tullow Oil plc are considered to be the only key management personnel as defined by IAS 24 - Related party disclosures.

	2009 £m	2008 £m
Short-term employee benefits	4.4	4.6
Post employment benefits	0.3	0.3
Amounts awarded under long-term incentive schemes	1.2	1.0
Share-based payments	2.8	2.3
	8.7	8.2

Short-term employee benefits

These amounts comprise fees paid to the Directors in respect of salary and benefits earned during the relevant financial year, plus bonuses awarded for the year.

Post employment benefits

These amounts comprise amounts paid into the pension schemes of the Directors.

Amounts awarded under long-term incentive schemes

These amounts relate to the shares granted under the annual bonus scheme that is deferred for three years under the Deferred Share Bonus Plan (DSBP).

Share-based payments

This is the cost to the Group of Directors' participation in share-based payment plans, as measured by the fair value of options and shares granted, accounted for in accordance with IFRS 2 'Share-based Payments'.

There are no other related party transactions. Further details regarding transactions with the Directors of Tullow Oil plc are disclosed in the Remuneration Report on pages 91 to 100.

END

 

END

 

 

MSCKMGMDGFZGGZM