Presentational Currency

RNS Number : 8597O

Tullow Oil PLC

06 July 2010

 



Change in presentational currency

6 July 2010 - Tullow Oil plc ("the Company", together with its subsidiaries, "the Group") will present its results in US Dollars with effect from 1 January 2010. The Group has decided it is appropriate to change the presentational currency from Sterling as the majority of the Group's activities are in Africa where oil revenues and costs are Dollar denominated.

In the appendix to this announcement the Company has presented an abbreviated Group income statement and an abbreviated Group cash flow statement for the years ended 31 December 2009, 31 December 2008 and the six month period ended 30 June 2009 and abbreviated Group balance sheets as at 31 December 2009, 30 June 2009 and 31 December 2008.  This financial information will form the basis of the comparative financial information to be included in the half yearly results for the six months ended 30 June 2010 and the first complete set of financial statements of the Group presented in US Dollars for the year ended 31 December 2010.  Tullow is expected to announce its half-yearly results on 25 August 2010.

This financial information is available to download in excel format from the Media and Investor Relations sections of the corporate website at www.tullowoil.com

The financial information as reported in the Group's Annual Report and Accounts and interim results for the years ended 31 December 2009 and 31 December 2008 and the six months ended 30 June 2009 has been restated from Pounds Sterling into US Dollars using the procedures as outlined below, in accordance with requirements set out in IAS 21: "The Effects of Changes in Foreign Exchange Rates" with respect to translation of results to the presentational currency:

·      assets and liabilities denominated in non-US Dollar currencies were translated into US Dollars at the closing rate prevailing at the balance sheet dates;

·      non-US Dollar income and expenses were translated into US Dollars at an exchange rate that approximates the exchange rate ruling at the date of the transactions; and

·      all resulting exchange differences have been recognised in other comprehensive income, within the foreign currency translation reserve.

The financial information set out in the appendix does not constitute the Company's statutory accounts but is derived from those accounts. Statutory accounts for 2009 and 2008 have been delivered to the Registrar of Companies. The auditors have reported on those accounts; their reports were unqualified, did not draw attention any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) OR (3) Companies Act 2006.

For further information please contact:

Tullow Oil plc

Julian Tedder

[phone]

Appendix

Special Purpose Auditors' Report to the Directors of Tullow Oil plc ('the Company') on the change in presentational currency applied to the Company's transition to reporting in US Dollars; financial information in respect of full year results 2008 and 2009

We have audited the accompanying abbreviated Group balance sheets of the Company as at 31 December 2008 and 2009, the related abbreviated Group income statements and abbreviated Group cash flow statements for the years then ended presented in US Dollars (the 'US Dollar financial information').  Financial information for the years ended 31 December 2008 and 2009 has been restated from Pounds Sterling into US Dollars, as described in the Change in presentational currency section. For each of the aforementioned periods, the Company has presented an abbreviated Group balance sheet, abbreviated Group income statement and abbreviated Group cash flow statement. This information will form the basis of the comparative financial information expected to be included in the first complete set of financial statements and accompanying information of the Company presented in US Dollars for the year ended 31 December 2010.

This report is made solely to the company's directors in accordance with our engagement letter dated 5 July 2010 and solely for the purpose of assisting the directors in reporting the impact of the change in presentational currency. Our audit work has been undertaken so that we might state to the company's directors those matters we are required to state to them in an independent auditors' report and for no other purpose. To the fullest extent permitted by law, we will not accept or assume responsibility to anyone other than that company, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and Auditors

The Directors of the Company are responsible for the preparation of the US Dollar financial information which has been prepared as part of the Company's transition to US Dollar presentational currency.

Our responsibility is to audit the US Dollar financial information in accordance with the terms of our engagement and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Under the terms of our engagement, we are required to report to you our opinion as to whether the US Dollar financial information has been properly prepared, in all material respects, in accordance with the basis of preparation set out in the Change in presentational currency section.

Scope of the audit of the prior periods' financial information

This audit involves obtaining evidence about the amounts and disclosures set out in the Change in presentational currency section sufficient to give reasonable assurance that the US Dollar financial information is free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the basis of preparation is appropriate to the Company's circumstances and has been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the US Dollar financial information.

Opinion

In our opinion the US Dollar financial information for the years ended 31 December 2008 and 2009 has been properly prepared, in all material respects, in accordance with the basis of preparation set out in the Change in presentational currency section.

Deloitte LLP

Chartered Accountants and Statutory Auditors

London

5 July 2010

Special Purpose Review Report to the Directors of Tullow Oil plc ('the Company') on the change in presentational currency applied to the Company's transition to reporting in US Dollars; financial information in respect of half-yearly results 30 June 2009

We have reviewed the accompanying abbreviated Group balance sheet of the Company as at 30 June 2009, the related abbreviated Group income statement and abbreviated Group cash flow statement for the period then ended presented in US Dollars (the 'interim US Dollar financial information').  Financial information for the period ended 30 June 2009 has been restated from Pounds Sterling into US Dollars, as described in the Change in presentational currency section. For the period ended 30 June 2009, the Company has presented an abbreviated Group balance sheet, abbreviated Group income statement and abbreviated Group cash flow statement. This information will form the basis of the comparative financial information expected to be included in the half-yearly results for the six month period ended 30 June 2010.

This report is made solely to the company in accordance with our engagement letter dated 5 July 2010 and solely for the purpose of assisting the directors in reporting the impact of the change in presentational currency.  Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The Directors of the Company are responsible for the preparation of the half-yearly US Dollar financial information which has been prepared as part of the Company's transition to US Dollar presentational currency.

Our responsibility

Our responsibility is to express to the Company a conclusion on the half-yearly US Dollar financial information for the period ended 30 June 2009 based on our review.

Scope of Review

We conducted our review in accordance with our engagement letter dated 5 July 2010. A review of financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim US Dollar financial information for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with basis of preparation set out in the Change of presentational currency section.

Deloitte LLP

Chartered Accountants and Statutory Auditors

London

5 July 2010-07-05

Group income statement (abbreviated)	12 months ended December 2009	12 months ended December 2008	(Unaudited) 6 months ended June 2009
	US$m	US$m	US$m
Sales revenue	915.9	1,310.6	438.5
Cost of sales	(625.5)	(687.3)	(300.5)
Gross profit	290.4	623.3	138.0
Administrative expenses	(77.6)	(79.2)	(29.6)
Profit on disposals	20.9	453.4	4.3
Exploration costs written off	(82.7)	(419.0)	(21.0)
Operating profit	151.0	578.5	91.7
(Loss)/gain on hedging instruments	(59.8)	66.6	(14.6)
Net finance costs	(58.7)	(80.2)	(25.6)
Profit from continuing activities before tax	32.5	564.9	51.5
Income tax expense	(1.9)	(135.7)	(20.2)
Profit for the year from continuing activities	30.6	429.2	31.3
Attributable to:
Owners of the parent	25.2	423.5	31.6
Minority interest	5.4	5.7	(0.3)
	30.6	429.2	31.3
Earnings per ordinary share	US$ cents	US$ cents	US$ cents
Basic	3.2	58.5	4.0
Diluted	3.1	57.8	4.0

Group balance sheet (abbreviated)	At 31 December 2009	At 31 December 2008	(Unaudited) At 30 June 2009
	$m	$m	$m
ASSETS
Non-current assets
Intangible exploration and evaluation assets	2,121.6	2,052.8	1,961.9
Property, plant and equipment	2,199.8	1,428.2	1,957.5
Other non current assets	51.4	43.0	14.9
	4,372.8	3,524.0	3,934.3
Current assets
Trade receivables	92.4	100.4	102.2
Other current assets	407.9	170.9	387.5
Cash and cash equivalents	252.2	450.3	229.1
	752.5	721.6	718.8
Total assets	5,125.3	4,245.6	4,653.1
LIABILITIES
Current liabilities
Trade and other payables	(557.1)	(478.1)	(578.1)
Short term loans	0.0	(304.8)	0.0
Other financial liabilities	(73.8)	(154.1)	(42.1)
	(630.9)	(937.0)	(620.2)
Non-current liabilities
Trade and other payables	(51.8)	(8.8)	(6.6)
Long term loans	(1,314.6)	(708.1)	(851.6)
Deferred tax liabilities	(473.5)	(503.8)	(515.5)
Provisions	(223.5)	(194.0)	(215.0)
	(2,063.4)	(1,414.7)	(1,588.7)
Total liabilities	(2,694.3)	(2,351.7)	(2,208.9)
Net assets	2,431.0	1,893.9	2,444.2
EQUITY
Called up share capital	130.1	119.7	129.8
Share premium	242.3	231.1	786.0
Other reserves	614.5	607.8	612.7
Retained earnings	1,402.0	898.6	879.3
Equity attributable to equity holders of the parent	2,388.9	1,857.2	2,407.8
Minority interest	42.1	36.7	36.4
Total equity	2,431.0	1,893.9	2,444.2

Group cash flow (abbreviated)	12 months ended December 2009	12 months ended December 2008	(Unaudited) 6 months ended June 2009
	$m	$m	$m
Cash flows from operating activities
Cash generated from operations	463.6	1,104.6	169.6
Income taxes paid	(187.1)	(142.3)	(159.0)
Net cash from operating activities	276.5	962.3	10.6
Cash flows from investing activities
Disposal of subsidiaries	5.1	385.6	3.9
Disposal of oil and gas assets	12.3	146.3	7.2
Purchase of intangible exploration and evaluation assets	(668.4)	(608.7)	(439.3)
Purchase of property, plant and equipment	(520.9)	(256.8)	(113.8)
Finance revenue	1.2	6.3	1.3
Net cash used in investing activities	(1,170.7)	(327.3)	(540.7)
Cash flows from financing activities
Net proceeds from issue of share capital	570.6	13.5	564.8
Debt arrangement fees	(100.5)	(9.9)	(75.3)
Repayment of bank loans	(376.3)	(691.2)	(313.4)
Drawdown of bank loan	701.9	580.5	191.8
Finance costs	(49.2)	(75.2)	(16.4)
Dividends paid	(75.3)	(80.9)	(47.9)
Purchase of treasury shares	(5.5)	(20.8)	(2.3)
Net cash generated by /(used in) financing activities	665.7	(284.0)	301.3
Net (decrease)/increase in cash and cash equivalents	(228.5)	351.0	(228.8)
Cash and cash equivalents at beginning of year/period	450.3	164.2	450.3
Translation difference	30.4	(64.9)	7.6
Cash and cash equivalents at end of year/period	252.2	450.3	229.1

 

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