Tullow Oil Annual Report 2023

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FY2023 Annual Report · Tullow Oil

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Strategic report

Tullow Oil plc
Annual Report and Accounts 2023

Building a
better future

through responsible
oil and gas development

2023 results

Group working interest production

Capital investment1

62,700 boepd
2022: 61,100 boepd

Operating cash flow1

$813m
2022: $972m

Adjusted EBITDAX1

$1.2bn
2022: $1.5bn

(Loss)/Profit after tax

$(110)m

2022: $49m

$380m
2022: $354m

Free cash flow1

$170m
2022: $267m

Net debt1

$1.6bn
2022: $1.9bn

Gearing1

1.4 times

2022: 1.3 times

Category

Description

Acute

• Physical risks include heat

waves, drought, flash
flooding, coastal flooding
and increased storm
frequency.1

Timeframe* &
Likelihood**

Timeframe:
Short–Long
Likelihood:
Likely

Chronic

• Rising sea levels, warming
ocean temperatures and
increased ground surface
temperatures.

Timeframe:
Long
Likelihood:
Likely

Potential impact

Mitigations

• Rising temperatures and
frequent heatwaves have
the potential to increase
costs and impact worker
health and safety.

• Threat to infrastructure

from more extreme weather
events and flooding lead to
increased insurance costs.
• Conflict in water-stressed or
climate-impacted regions
impacts operations, social
licence to operate, political
stability, and potential. loss
of production.

•

• Business continuity risk due
to increased storms at ports
making access to offshore
vessels more challenging.
Inability to access
onshore equipment and
consumables that support
our offshore operations
impacting production
and resulting in increased
underwriting costs.

•

Increased sea temperatures
impact water use in
operations and sustained
heat impacts may impact
worker health and safety.
• Conflict in water-stressed or
climate-impacted regions
impacts operations, social
licence to operate, political
stability, and potential loss
of production.

• Proven, tested and effective

business continuity and crisis
management plans and
preparedness.
• Insure core assets.
• Review and update

vulnerability of core operated
and non-operated production
assets to acute and chronic
physical risk.

• Identify and assess impact

of physical risks on finances,
operations risk and wider
business.

• Review and update

vulnerability of core operated
and non-operated production
assets to acute and chronic
physical risk.

• Identify and assess impact

of physical risks on finances,
operations and wider
business.

1. Based on research we commissioned Verisk Maplecroft to undertake on the following production assets: Ghana (offshore production, onshore
logistics and office sites), Guyana (offshore licence area, onshore office site), and Kenya (onshore field development area and office site, Lamu
Port). As part of the research, considered future climate scenarios to 2050 based on the Representative Concentration Pathways developed by the
Intergovernmental Panel on Climate Change (IPCC).

Impact of climate-related risks on our business, strategy and financial planning
We assess the impact of climate-related risks and opportunities on our business by analysing a range of metrics including
the impact on profitability, access to new markets, and cost and access to capital.

We also analyse the impact of oil prices as oil price fluctuation has the most impact on our business. This approach aligns
with the metrics we use to measure our performance and the information we provide to our investors.

Using the International Energy Agency (IEA) energy scenarios below, we assess the impact on operational cash flow
(OCF) generated from our existing production portfolio over 1, 5, and 10 years, which is consistent with our viability
assessment (see below).

Tullow Oil plc Annual Report and Accounts 2023 – 43

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Corporate governance

Financial statements

Supplementary information

Task Force on Climate-related Financial Disclosures (TCFD) continued

Strategy continued
Impact of climate-related risks on our business, strategy and financial planning continued

IEA scenarios used to test impact on OCF

Scenario

Key assumptions

Net zero by 2050 (NZE)

• Oil and gas demand 50% of 2020 level.
• No new oil and gas fields approved for development, with producers focusing on output from

existing assets.

Announced pledges
(APS)

Stated policies
(STEPS)

• Countries’ net zero commitments lead to peak oil demand in 2024.
• New oil and gas projects needed with shorter lead times and payback periods.

• Global oil demand peaks in 2035.
• New oil and gas projects needed with shorter lead times and payback periods.

The impact to OCF per annum is calculated as a percentage for each period and reported against three broad bands of
income (see below). We do not consider future developments or exploration opportunities as it is difficult to be specific
about the impact of the scenarios due to the high degree of uncertainty associated with future growth.

OCF Impact

Stated policies

Announced pledges

NZE

Positive

Loss of up to 10%

Loss over 10%

1 year

5 years

10 years

-8%

-19%

-37%

-11%

-32%

15%

-11%

-37%

The oil price planning assumptions we apply, as part of our annual business planning process, are generally higher
than the IEA scenarios, with the exception of the STEPS scenario from 2024 onward. Our assumptions are informed
by a range of external forecasts and our in-house expertise, which we use to determine an appropriate planning
assumption. Given the STEPS scenario is a conservative benchmark for future oil prices, reflecting global policies and
implementing measures adopted as of the end September 2022, we consider our current planning assumptions to
be a fair consideration of oil market conditions over the medium term. Based on the oil price trajectories in the APS
and NZE scenarios, the IEA predicts a more challenging oil price environment should the assumptions within these
scenarios happen.

To complement our assessment of oil price impacts on OCF, we incorporate the IEA NZE emerging markets shadow
carbon price scenarios into decisions about new investments and our annual business planning cycle.

As calls for compliance-based carbon pricing mechanisms increase we continue to monitor carbon pricing mechanisms,
including emissions trading schemes, carbon taxes and carbon border adjusted mechanisms to understand the potential
impact on Tullow.

For the first time this year we have also considered the impacts of an increased cost of capital on our business, by
running scenarios on the weighted average cost of capital. This reflects our ongoing assessment of how we can access
diversified forms of capital, that might be more expensive, to support delivery of our strategy.

In the coming year we will undertake further assessments to understand the amount and extent of our assets that are
vulnerable to climate-related physical risks. We expect this work to be completed by the end of the calendar year 2024.

The climate-related risks and opportunities that could have a potential impact on our business are detailed in the tables
on pages 41 to 43. The potential financial impacts are set out on the next page. Further information is included in note 25
to the financial statements.

44 – Tullow Oil plc Annual Report and Accounts 2023

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Financial statements

Supplementary information

Risk

Timeframe Financial Impact

Methodology

Substantive
transition risks

Market – the NZE
Scenario would trigger
reductions in cash
flows resulting in a
write-off to net book
value of intangible
exploration and
evaluation assets.

Market – the NZE
Scenario would trigger
reductions in cash
flows resulting in an
additional impairment
to property, plant and
equipment.

Market – the NZE
Scenario could
expedite the energy
transition resulting
in decommissioning
taking place earlier
than anticipated.

Long
(10 years+)

Substantive
physical risk

Acute
climate-
related
physical risks

Onshore facilities
which support Ghana
production operations
may be impacted by
acute physical risks
including an increased
risk of flooding or fire
associated with more
intense weather events.

Medium
(5 years+)

$229 million

Write-offs under the NZE Scenario are determined
by an assessment of the impact on net book value
due to the difference between Tullow’s internal and
IEA’s projected oil price.

Medium
(5 years+)

$174 million

Impairment of physical assets under the NZE
Scenario is determined by calculating the impact
of reduced oil price on revenues generated by
operated production assets in Ghana.

Cessation of production
assumptions would
accelerate Ghana by
0–1 years; Gabon 0–9
years; Espoir 4 years.
The risk on the timing of
decommissioning activities
is limited, supported by
production plans to fully
produce fields in the
foreseeable future.

In a worst case flood/
fire event the business
could experience an
increase in premium or lost
production primarily arising
from supply chain risks
(increased length of time
to fabricate spares/critical
equipment).

Insurable loss of $223
million: items are
split between circa 11
onshore warehouse or
storage facilities, so the
accumulation per site is
much smaller (largest site
circa $60 million).

Decommissioning timelines could be brought
forward under the NZE Scenario as a result of
decreased cash flows from reduced oil price.

Quantification of this impact is via an assessment
of the economic cut-off point for each asset when
using the lower NZE scenario projected oil prices.

The value of consumables in our onshore Ghana
Supply Hubs which may be affected by an
increasing frequency of flood events or other
natural catastrophes, e.g. fire.

Storage locations and values are regularly checked
to ensure appropriate insurance cover is in place.

The impact to our business would be realised via
an increase in premium and/or lost production
with a corresponding impact to OCF, primarily as
a result of length of time to source and replace
critical spares and equipment. While these risks
are considered to be unlikely, an inventory of
critical spares and equipment required to maintain
production is under way for 2023 to further mitigate
this risk.

Resilience of our strategy, taking into consideration different climate-related scenarios,
including a 2°C or lower scenario
Based on our assessment of the likely impact of climate-related risks and opportunities on our business, together with the
actions we are taking to mitigate risk, our strategy is resilient and positions us well to fulfil our purpose.

As highlighted in the tables on pages 41 to 43, our climate change risks are likely to materialise over the medium to
long term. Based on our analysis, transition risks from oil demand and price decline, carbon price exposure and access
to and cost of capital are likely to be the most material. Our strategy takes these factors into account and focuses on
infrastructure-led opportunities with short payback periods that align with host government policies.

Furthermore, to ensure our business remains resilient in a low oil price environment and generates the expected OCF,
we focus on operational excellence and run our business within a strict cost framework, allocating capital in a disciplined
way. Whilst we recognise that the IEA NZE and Announced Pledges scenarios oil price assumptions would have a
negative impact on our OCF, the medium- to long-term assumptions for the STEPS scenario would have a positive impact
on our OCF.

The Glencore facility agreement, that we secured in November 2023, demonstrates our ability to access long-term
capital from a variety of sources and is a strong endorsement of our strategy and business plan.

Tullow Oil plc Annual Report and Accounts 2023 – 45

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Corporate governance

Financial statements

Supplementary information

Task Force on Climate-related Financial Disclosures (TCFD) continued

Describe the processes for managing
climate-related risks

Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into overall risk
management
‘Climate change’ is one of our principal risks (see page 54)
the management of which forms part of our overall risk
management process which is described on pages 48 to
51. This principal risk covers some aspects of the climate-
related risks described on pages 41 to 43 above including:

• Net Zero by 2030.

• Eliminating routine flaring by 2025.

Other climate-related risks, including regulatory, legal
and physical are managed by functional teams including
legal, treasury and sustainability and included within risk
registers. In relation to our investment decision process,
we do take account of GHG emissions and shadow carbon
pricing, and we are beginning to embed the assessment of
carbon intensity across our portfolio.

As we continue to evolve our risk management processes
through 2024, we will look to embed the identification,
assessment, and management of the above climate-
related risks in our risk management framework.

Risk management

Describe the processes for identifying and
assessing climate-related risks
The climate-related risks that could impact our business
were initially identified during a workshop that was held
in 2021. Participants in the workshop, which was led
by the sustainability team, included members from oil
marketing, production, risk, legal and exploration teams.
Our insurance team, part of Group Risk, also assess the
climate impacts to inventory held in onshore warehouses
(see more detail on page 45) and our corporate finance
team assess the climate change associated risks of access
to and cost of capital when seeking new forms of capital
(see page 41).

This year, through engagement with key internal and
external stakeholders, we commenced a double materiality
assessment to ensure that our sustainability strategy
continues to address stakeholder issues and changes in
our business and its operating environment (see page 27).
As part of this process, our transition and physical climate-
related risks, and their financial impact, were assessed
and the risks detailed on pages 41 to 43 above were
reconfirmed. These risks were subsequently considered by
the SLT and the Board as part of the annual strategy review
process. Further information about the double materiality
process can be found in our Sustainability Report which is
available at www.tullowoil.com/sustainability.

Our process for identifying and assessing climate-related
risks considers information provided by industry bodies
including the IEA and International Petroleum Industry
Environmental Conservation Association, the World Bank
and other industry and professional bodies. We also attend
workshops provided by external advisers and during the
year our legal function participated in two workshops
on climate-related legal risks, led by Freshfields. We also
consider the ongoing work of the Financial Stability
Board, Network for Greening the Financial System and
key stakeholders of our host countries to inform our
assessment and understanding of risk in core regions of
operation and for various aspects of our business.

46 – Tullow Oil plc Annual Report and Accounts 2023

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Financial statements

Supplementary information

Scope 1, Scope 2, and, if appropriate, Scope
3 greenhouse gas (GHG) emissions, and
related risks
We currently disclose our operated and net equity Scope 1
and 2 emissions and eight of the fifteen Scope 3 emissions
categories set out in the Greenhouse Gas Protocol
Corporate Standard (see page 34).

Targets used to manage climate-related
risks and opportunities and performance
against targets
We are committed to achieving Net Zero by 2030 on
our Scope 1 and 2 net equity emissions, with an interim
target to reduce emissions by 40% by 2025, as part of
our commitment to eliminate routine flaring by this date
(see page 33).

Metrics and targets

Metrics used to assess climate-related risks
and opportunities in line with strategy
and risk management process
The metrics we used to assess and monitor our climate-
related risks and opportunities are outlined below.

Transition
risks

Emissions
• Operated Scope 1 and 2 emissions

• Net equity Scope 1 and 2 emissions

• Scope 3 emissions

• Net equity carbon intensity of production

Decarbonisation spend
• Capex on decarbonisation projects

• Carbon offset spend

Carbon pricing
• Proportion of GHG emissions subject to

carbon pricing mechanisms

• Internal carbon price used for new

investments/acquisitions

• Production assets in areas of water stress

• Maximum anticipated single site

insurable loss to onshore facilities due
to physical risk (flood, fire)

Physical
risks

Metrics to track the delivery of elimination of routine flaring
and the Ghana carbon offset project are determined by
the Board annually and are embedded in the sustainability
metric within our corporate scorecard (see pages 20 and
21). In 2023, the sustainability metric contributed 5% of the
total scorecard. Performance against all scorecard metrics
is tracked throughout the year, and the Board receives
regular progress updates.

Tullow Oil plc Annual Report and Accounts 2023 – 47

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Supplementary information

Risk management and principal risks

Effectively managing our risks and opportunities is critical in ensuring we
achieve our strategic objectives and protect shareholder value.

Risk oversight and governance
A risk-focused culture and consistent risk management framework is embedded across Tullow at all levels and is driven
by the Board. The Board is responsible for ensuring we maintain an effective risk management and internal control
system and it works closely with the SLT to ensure this is in place. The Board also oversees the processes we operate to
identify, assess and mitigate the risks that could affect our business, including those risks that could threaten our strategy,
operating model, performance, solvency and liquidity.

The Audit Committee is responsible for overseeing the process to identify principal and emerging risks and ensuring that
they are managed effectively. The Audit Committee is also responsible for overseeing our internal audit programme and,
with the support of the SLT, undertakes an annual review of the effectiveness of the internal controls we implement. The
latest review was undertaken in February 2024 and reported to the Audit Committee and the Board on 28 and 29 February,
respectively (see pages 85 and 86).

The SLT is collectively responsible and accountable for the risk management processes that operate across Tullow, with
individual members taking ownership for risks that fall in their business area.

Risk management framework
Our risk management framework takes a ‘top-down, bottom-up’ approach and is embedded throughout Tullow.
This structure ensures ownership and responsibility for identification, assessment and management of key risks and
opportunities at all levels of the Company. Our risk governance framework is set out below.

Risk management framework

Board

• Sets risk appetite.
• Oversees identification, assessment of and response to principal risks.
• Monitors effectiveness of risk management process.

Audit Committee

• Oversight of risk management and internal control processes.
• Oversees independent, objective and competent internal audit function.
• Oversight of compliance with legal, ethical and regulatory expectations.

Senior Leadership Team

• Sets tone for an effective risk management culture.
• Identifies and assesses principal risks.
• Determines principal risk mitigation actions and monitors their effectiveness.
• Oversees and supports business leadership’s risk identification processes and challenges their risk assessments.

Business management

Business leadership

Internal audit

• Identifies risks.
• Implements controls to

manage and mitigate risks.

• Sets framework and embeds
effective risk management
practices.

• Challenges business

management on risks identified
and their management.
• Monitors compliance with
fundamental standards.
• Undertakes regular reviews.

• Undertakes risk-based internal
audit reviews of governance,
and internal controls across all
levels of the Group.
Identifies areas for improvement
and monitors implementation of
actions to address.

•

First line of defence
(ownership and management)

Second line of defence
(risk management oversight)

Third line of defence
(independent assurance)

48 – Tullow Oil plc Annual Report and Accounts 2023

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Risk appetite
The Board sets Tullow’s risk appetite. In doing so it recognises that risk cannot be fully eliminated and that certain risks
must be accepted if we are to deliver our strategy. On an annual basis the Board reviews our risk appetite to ensure that it
reflects the current external and market conditions. The last review was undertaken in February 2024.

The level of risk we are prepared to tolerate in relation to each of our risk categories and principal risks is detailed in the
table below.

Risk category and strategy

Risk appetite

Strategy

To deliver our strategy and value to stakeholders we endeavour to be nimble,
opportunistic and adaptable to changing market conditions.

Principal risks

1 Business plan not delivered

3 Value not unlocked

Financial

We adopt a prudent approach to financial planning including diversifying our
funding sources and their maturities, applying disciplined capital allocation,
hedging our oil revenues and maintaining debt levels at a manageable level.

Principal risks

4 Geopolitical risk

7 Insufficient liquidity and funding capacity to sustain the business

Organisation

To ensure optimal business performance we promote a flexible,
performance-driven and risk-conscious culture aimed at delivering our
business objectives. We also maintain a sustainable and diverse workforce
with strong leadership and robust succession planning.

Principal risks

8 Capability cannot be attracted, developed or retained

Health and safety and security

ACCEPT investing in developing economies without established oil
and gas industry; but do NOT ACCEPT investing in No-go areas as
determined by the Board.

ACCEPT current asset concentration and balance between short
and long-term investments; but REFRAIN FROM excessive further
concentration in significant E&A or development assets.

ACCEPT temporary erosion of financial strength due to adverse
market conditions provided a recovery plan in place.

PREVENT significant impact of oil price volatility on revenue.

PREVENT significant unexpected costs, write-offs or loss of
significant revenue sources.

PREVENT misalignment of strategy with culture and leadership.

At all times we must operate in a manner to reduce risk to as low a level as is
reasonably practicable.

PREVENT major environmental, health and safety issues and
security incidents.

Principal risks

2 Asset integrity breach

6 Major accident event

Stakeholders

We must nurture relationships with host governments and all stakeholders
based on integrity, mutual trust, and transparency, and conduct our business
dealings with a goal of Shared Prosperity.

Principal risks

4 Geopolitical risk

5 Climate change

Cyber

ACCEPT degree of investor volatility but PREVENT deterioration in
relationships as a result of miscommunication, error or abuse.

PREVENT escalation of stakeholder disputes, but ACCEPT the
need to protect the Company’s rights and interests in relation to
fundamental issues e.g. sanctity of contracts, stabilisation clauses,
and issues jeopardising commerciality of assets.

We plan, design, and operate information security systems to eliminate risk
where practical and otherwise to as low a level as reasonably possible.

PREVENT serious impacts from probable cyber attacks.

Principal risk

10 Major cyber-disruption

Conduct

We promote an ethical culture. It is the right thing to do and is essential if we
are to maintain our reputation as a trusted partner.

PREVENT serious breaches of code of conduct, major laws
or regulations.

Principal risk

9 Compliance or regulatory breach

Tullow Oil plc Annual Report and Accounts 2023 – 49

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Risk management continued

Risk identification and assessment
Management within each business unit are responsible for identifying the key risks in their area and for establishing
appropriate and effective management processes to control and mitigate the impact of such risks. All identified business
unit key risks are consolidated into the business unit risk registers, which business unit management review and assess on
at least a quarterly basis taking into account likelihood of occurrence and potential impact in relation to the Company’s
risk categories (see above).

The leaders of each business unit review and re-assess the business unit risk registers covering their functional areas to
evaluate the strength of existing controls and determine whether mitigation actions need to be revised to ensure that risk
levels continue to align with the Company’s risk appetite as set by the Board.

Using the business unit risk registers, the SLT identify the principal risks which can be either a single risk or a set of
aggregated risks which, taken together, could have a significant impact on our strategy, performance or solvency.
Members of the SLT are assigned ownership of and are accountable for stewardship of each of the principal risks. The
SLT reviews and discusses the principal risks bi-annually to determine whether mitigations are being effectively executed
within the agreed timeframe and whether changes should be made to the principal risks, including whether any risks
should be elevated into the principal risk category.

The principal risks, together with the controls and actions to mitigate their impact, are discussed by the Board bi-annually
to provide ‘top-down’ challenge and support. The result of this review is communicated back to the SLT and the business
unit leaders to facilitate risk awareness and effective decision making throughout the organisation.

Our principal risks
Our current principal risks are set out on pages 52 to 56.

During the year, the Company’s risk profile has been closely monitored. The external economic and political landscape
including the war in Ukraine, inflationary pressures and oil price volatility have not resulted in any new risks or material
changes to existing risks.

Our assessment of the likelihood of our principal risks occurring and the potential impact after taking into account the
risk management processes and mitigation actions we implement is summarised below.

Principal risks

Principal risks
1. Business plan not delivered
2. Asset integrity breach
3. Value not unlocked
4. Geopolitical risk
5. Climate change
6. Major accident event
7.

Insufficient liquidity and funding capacity to
sustain business

8. Capability cannot be attracted, developed or retained
9. Compliance or regulatory breach
10. Major cyber-disruption

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Low

Impact

Catastrophe

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Emerging risks
Emerging risks are discussed by the Board and the SLT periodically throughout the year and formally considered every six
months as an integral component of the principal risk update.

Evolution of risk management processes during the year
Development of our risk management framework is an ongoing process and during the year we have continued to
strengthen our processes and controls.

Building a more
integrated risk
management
system

During 2023 we have been working to
develop and implement a new enterprise risk
management system to replace our spreadsheet-
based methodology. The new system will
embed integrated and consistent business
risk management across all our operations.
In particular, it will allow us to match strategic
and corporate objectives to risks, effectively
manage risk across different business functions
by applying consistent controls to similar risks
and enhance internal reporting.

Tullow Oil plc Annual Report and Accounts 2023 – 51

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Supplementary information

Our principal risks

Strategy key

Operational excellence

Capital efficiency

Business growth

Residual risk profile change

No change

Increasing risk

Decreasing risk

Residual risk
profile change
during the year Mitigation

• Cross-discipline integrated performance

management and planning including clear
KPIs and forums.

• Maintenance and integrity management
plans covering all equipment classes,
Management and oversight of JV Partners to
ensure plans are implemented effectively.

• Jubilee Expansion project, Jubilee North

East (TEN Enhancement Projects delayed
or on hold).

• Continue to invest in non-operated portfolio

and M&A to add production assets.

• TRACS annual reserves audit.

• Management of operations & maintenance

and control of contractors.

• Asset and well integrity maintenance

programmes are in place.

• Oversee contractor activities.

• Undertake root cause failure analysis

for every incident and capture near miss
lessons learned.

• Well-developed emergency response plan
and incident management framework and
associated training programmes operated.

• Audit non-operated joint venture

partner operators.

• Seek expert external advice when
appropriate (e.g. leaking wells).

Risk, category, link to strategy and owner

1 Business plan not delivered

Causes and threats:

• A decline, or problems with the performance, of wells or facilities could

result in not meeting planned production levels.

• A failure to grow the business via targeted investment in existing fields

and/or investment in new fields.

•

Inability to get partner approval for Tullow activity proposals
(operated portfolio).

• Production equipment failure.

• Unsuccessful appraisal and exploration activity.

•

Inability to influence operator schedule (non-operated portfolio).

Consequences:

• Reduction in production, revenue and cash flow.

• Longer-term production targets not met.

•

Impairment of asset values.

• Damage to stakeholder reputation.

Category: Strategy

Owner:

Wissam Al-Monthiry, Ghana Managing Director
Jean-Medard Madama, Director of Non-Operated and Exploration

2 Asset integrity breach

Causes and threats:

• Aged infrastructure and under investment in upkeep may result in

equipment failure.

• Failure to adhere to procedural requirements resulting in equipment

operation outside safety limits.

• Leakage from wells planned to be decommissioned (non-operated portfolio).

• Lack of critical equipment or spares.

• Lack of operator integrity in non-operated portfolio.

• Project-based execution or delivery failure.

Consequences:

• Reduction in production, revenue and cash flow.

• Extensive damage to facilities.

• Damaged relations with JV partners and host governments.

• Damaged reputation as a credible asset operator.

Category: Health & safety and security

Owner:

Wissam Al-Monthiry, Ghana Managing Director
Jean-Medard Madama, Director of Non-Operated and Exploration

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Residual risk
profile change
during the year Mitigation

• Review and approval of final Gas Sale

Agreement by SLT and Board.

• Capital allocation process (following
agreement of commercial terms).

• Critical actions defined in scorecard.

• Ongoing review and approval of Kenya
project and structure by SLT and Board.

• Ramp-up of business development
activities and pursuit of multiple
simultaneous target acquisitions.

• MPR, review and assurance processes

(following agreement of commercial terms).

• Joint working teams set up in support of

Non-Operated and Exploration to optimise
production opportunities and address
capex exposure.

• Extensive relationship management plan
in place to manage relationships with
governments, including Ghana Advisory Board.

• Our business plans are aligned with

national priorities.

• Communication of the positive impact of our
activities on host nations and communities.

• Robust stabilisation clauses are included in
our Petroleum Agreements and Production
Sharing Contracts to protect against
unreasonable demands.

• Closely monitor political and economic

developments in Ghana.

Risk, category, link to strategy and owner

3 Value not unlocked

Causes and threats:

• Non-delivery of Ghana gas price and payment guarantees.

• Not progressing Kenya project.

•

Inability to deliver acquisitions.

• Unable to mitigate Espoir cash flow profile via sale of asset.

• Failure to deliver exploration farm-downs to reduce capex exposure.

Consequences:

• Loss of gas revenue precipitates early COP and decommissioning costs.

• Loss of value upside from Kenya of c.$300 million.

• Failure to mitigate Ghana concentration risk and resulting share

price impact.

• Cash flow impact of c.$150 million, from not selling Espoir asset.

• Exposure to exploration costs in Côte d’Ivoire, Argentina and Guyana of

$50–$100 million.

Category: Strategy

Owner:

Stuart Cooper, Director of Strategy, Commercial and
Business Development

4 Geopolitical risk

Causes and threats:

• Political changes in the West Africa region, elections and outcomes.

• Natural resources targeted for unreasonable and changing fiscal or

regulatory demands by host governments.

• Failure to manage relationships with key host government stakeholders

or regulators.

• Economic unrest, especially in Africa.

• Supply chain disruption.

• Ownership of adjacent licence blocks.

Consequences:

• Delayed decision making by host governments and local partners and

security arrangements adversely affected.

• Efficient operations obstructed.

• Delayed implementation of growth plans.

•

Increased costs and financial loss, demand for unitisation payments
from adjacent block owners.

• Ghana Revenue Authority tax demands.

Category: Stakeholder and Financial

Owner:

Jean Medard Madama, Director of Non-Operated and Exploration

Tullow Oil plc Annual Report and Accounts 2023 – 53

Strategic report

Corporate governance

Financial statements

Supplementary information

Our principal risks continued

Residual risk
profile change
during the year Mitigation

• Stress test our portfolio to ensure core assets
are resilient in different oil and carbon price
environments.

•

Implement our plan to achieve Net Zero by
2030 (Scope 1 and 2 net equity) (see page
33).

• Climate Policy agreed by the Board annually.

• Continue to engage with host countries to
understand and align with their long-term
energy transition strategies, including Paris
Nationally Determined Contributions.

• Climate considerations embedded in

decision making.

• Extensive stakeholder engagement to

manage impacts.

• Asset and well integrity and maintenance

programmes are in place, including regular
self-verification and external certification,
audit and assurance of integrity plans.

• Undertake root cause failure analysis for every
production loss and EHS incident and capture
lessons learned to prevent recurrence.

• Well developed emergency response plan
and incident management framework and
supporting training is in place.

• Robust EHS reviews are completed at all
stages of contract management process
including from specification/pre-qualification
through to contract closure.

• Active contractor engagement on safety

throughout life of contract including active
EHS forums to enable direct participation.

Risk, category, link to strategy and owner

5 Climate change

Causes and threats:

• Regulatory constraints, carbon pricing mechanisms, low oil price or

conditional access to capital impacting operations or operating cash flow.

• Failure to align with broader energy transition goals that challenge

business strategy.

•

Inability to eliminate routine flaring by 2025.

Inability to deliver nature-based carbon offsets.

• Oil price changes.

Consequences:

•

Impacts our ability to implement our strategy, our licence to operate and
our reputation.

• Reduces access to capital including shareholders becoming reluctant

to invest.

• Assets become stranded or uneconomic.

• Lack of perceived commitment to sustainability impedes our ability to

attract and retain talent.

• Operations are impacted by lack of available equipment or supplies due

to physical risks i.e. flooding.

Category: Stakeholder

Owner:

Julia Ross, Director of People and Sustainability

6 Major accident event

Causes and threats:

• Asset integrity failures and/or extensive damage to facilities.

• Our, or our contractors’, failure to meet safety standards or adhere

to procedural requirements.

• Operation of equipment outside safe operating limits leading

to a major incident.

• Ageing infrastructure leading to equipment or piping failure.

Consequences:

• Loss of life, environmental damage and potential loss of production.

• Loss of revenue and increased costs.

• Reputational damage.

• Loss of licence to operate.

Category: EHS

Owner:

Wissam Al-Monthiry, Ghana Managing Director

54 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Risk, category, link to strategy and owner

7 Insufficient liquidity and funding

capacity to sustain business

Causes and threats:

• Oil price volatility.

• Failure to deliver targeted farm-downs of exploration assets and Kenya.

• Failure to deliver our business plan and inappropriate capital allocation.

• Global cost inflation.

• Unexpected operational incidents.

• Unable to refinance our debt.

Consequences:

• Erosion of balance sheet and revenues.

• Material negative impact on cash flow.

• Restricts our ability to reduce debt and strengthen the balance sheet.

•

Inability to meet our financial obligations when they fall due.

Category: Financial

Owner:

Richard Miller, CFO

8 Capability cannot be attracted,

developed or retained

Causes and threats:

• Critical staff leave the organisation.

• Our lean and agile structure is dependent on a small number of key and

critical roles.

• Unable to adapt quickly to the changing oil and gas skills and
capabilities requirements and to identify sources of talent.

•

Inadequate workforce planning.

• Employee value proposition does not meet employee demands.

Consequences:

• Difficulty in delivering our business plan.

• Loss of staff would increase pressure on remaining colleagues.

• Deterioration in the wellbeing of our colleagues, a poor working

environment and further attrition.

Category: Organisation

Owner:

Julia Ross, Director of People and Sustainability

Residual risk
profile change
during the year Mitigation

• Developed strategy and business plan to

deliver strong cash flow and deleveraging.

• Capital structure provides liquidity headroom
through to December 2024 even in a low oil
price environment.

• A disciplined approach to capital allocation
that focuses on cost control and prioritises
high-return and short payback investments
is adopted.

• A material commodity hedging programme

that protects against the impact of a sustained
low oil price environment is in place.

• Developed an enhanced employee

value proposition.

• We actively engage with employees through

a variety of channels (see page 23).

• Regularly review the capabilities across the
extended leadership team, to ensure the
right skill set is in place to deliver our strategy
and to identify development opportunities.

• Offer competitive market-aligned

compensation and benefits.

• Agile organisation model able to adapt to

changing business needs.

• Talent management and strategic

workforce planning.

• Succession planning.

Tullow Oil plc Annual Report and Accounts 2023 – 55

Strategic report

Corporate governance

Financial statements

Supplementary information

Our principal risks continued

Residual risk
profile change
during the year Mitigation

• Strong anti-bribery and corruption

governance processes are in place as a
core element of the Ethics & Compliance
programme.

• Operate PermIntel compliance tracker

to monitor all regulatory and contractual
obligations.

• Regularly undertake third-party due diligence

procedures and assurance processes.

•

Investigation procedures and an associated
Misconduct and Loss Reporting Standard are
in place.

• Regularly undertake anti-tax evasion risk
assessments and targeted employee
training.

• Established financial controls and delegation

of authorities.

• Embedded a Security Incident Event
Management system across the
organisation.

• Established an Advanced Security Operations
Centre that provides 24/7 network and device
monitoring, alerts and responses.

• Run a security awareness programme

including regular staff susceptibility phishing
training and testing.

• Provide annual mandatory security

awareness training for all staff.

• Operate an independent technical assurance

programme.

•

Installed technical network protection
access controls and network architecture
protocols.

Risk, category, link to strategy and owner

9 Compliance or regulatory breach

Causes and threats:

• Non-compliance with bribery and corruption legislation or contractual
obligations along with other applicable business conduct requirements.

• Regulatory action, an unsettled litigation/dispute or additional

future litigation.

•

Increased Ghana government interest in contracting activity, pressure
on Tullow to not adhere to our standards.

• Third-party due diligence not completed adequately.

• Breach of sanctions.

• Failure to keep pace with regulatory change.

Consequences:

• Unplanned cash outflow due to payment of penalties and/or fines.

• Reputational damage and a loss of stakeholder confidence.

• Personal and corporate fines or prison sentences.

• SFO monitorship for up to three years.

• Loss of licence to operate.

• Adverse impact on share price.

Category: Conduct

Owner:

Mike Walsh, General Counsel

10 Major cyber-disruption

Causes and threats:

• Major cyber-attack, internal or external.

• User actions, intentional or naïve, that compromise cyber security.

• Outsourced provider resources not able to deliver agreed service levels.

• Major ransomware outbreak within the Tullow network.

• Third-party information security breach.

Consequences:

• Limitations on our ability to operate.

• Financial loss, loss of stakeholder confidence, loss of production.

• High ransomware demands.

• Additional cost by way of fines or resolution of service.

• Trigger a major incident.

Category: Cyber

Owner:

Mike Walsh, General Counsel

56 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Viability statement

Assessment period
In accordance with the provisions of the UK Corporate Governance Code, the Board has assessed the prospects and
the viability of the Group over a longer period than the 12 months required by the ‘Going Concern’ provision. The Board
assesses the business over a number of time horizons for different reasons, including the following: Annual Corporate
Budget (i.e. 2024), Corporate Business Plan (5 years i.e. 2024–2028), long-term Business Plan (10 years). The Board’s
period of assessment for the purpose of the viability statement is five years.

Assessment of the Group’s principal risks
In order to make an assessment of the Group’s viability, the Directors have made a detailed assessment of the Group’s
principal risks (see pages 48 to 56), and the potential implications these risks could have on the Group’s business delivery
and liquidity over the assessment period. This assessment included, where appropriate, detailed cash flow analysis, and
the Directors also considered a number of reasonably plausible downside scenarios, and combinations thereof, together
with associated supporting analysis provided by the Group’s Finance team. A summary of the key assumptions aligned
to the Group’s principal risks and reasonably plausible downside scenarios can be found below. It should be noted that
some assumptions encompass multiple risks but have not been repeated to avoid unnecessary duplication.

Principal risks

Base case assumption

Downside scenario

Business plan
not delivered

Production is assumed to be in line with the
Corporate Business Plan.

Geopolitical risks

The Group has assumed certain cash outflows
associated with tax exposures and provisions.

Climate change

Base case includes expenditure required to meet
2030 Net Zero commitment (a) decarbonisation
project cost to eliminate routine flaring by 2025,
(b) nature-based solutions project cost to offset
hard to abate emissions.

5% reduction in production in each year.

The Group has included an additional
$28 million in 2024 in relation to potential
outflows. The Group has not included any
outflows associated with a negative result
from the ongoing GRA arbitrations due to its
view on the merits of these cases.

The Group has considered an oil price
sensitivity in line with the IEA ‘Net Zero by
2050 Scenario’; see below.

Insufficient liquidity
and funding
capacity to sustain
the business

Oil price assumptions are based on the forward
curve at 31 December 2023 for two years,
followed by the Group’s Corporate Business Plan
assumption from 2026 onwards:

The Group has analysed two downside
oil price scenarios; the first is based on
the Directors’ assessment of a reasonably
plausible downside scenario:

2024: $78/bbl 2025: $75/bbl 2026: $70/bbl
2027: $70/bbl 2028:$70/bbl

2024: $70/bbl 2025: $70/bbl 2026: $65/bbl
2027: $65/bbl 2028: $65/bbl

Operating costs and capital investment are
assumed to be in line with the Corporate
Business Plan.

The second is in line with the IEA ‘Net Zero
by 2050 Scenario’:

2024: $58/bbl 2025: $54/bbl 2026: $50/bbl
2027: $46/bbl 2028: $43/bbl

Operating costs are assumed to be 5%
higher than those included in the Corporate
Business Plan.

For detailed information on risk mitigation, assurance and progress in 2023 refer to the detailed discussion of risks on
pages 52 to 56.

For ‘ Asset integrity breach’, ‘Value not unlocked’, ‘Major accident event’, ‘Compliance or regulatory breach’, ‘Capability cannot
be attracted, developed or retained’, and ‘Major cyber-disruption’, the Group has assessed that there is no reasonably plausible
scenario that can be modelled in isolation or in combination with other risks from a cash flow perspective.

Tullow Oil plc Annual Report and Accounts 2023 – 57

Strategic report

Corporate governance

Financial statements

Supplementary information

Viability statement continued

Conclusion
The Group has $2.1 billion debt outstanding, maturing in 2025, 2026 and 2028. The Corporate Business Plan does not
project sufficient free cash flow generation to allow the Group to fully repay these debts when they fall due, and therefore
it will need to access debt markets within the viability assessment period.

In the base case, net debt and gearing are forecast to reduce sufficiently such that the Directors are confident that the
Group will be able to secure the funding required to maintain adequate liquidity headroom throughout the viability
assessment period.

There is sufficient liquidity for the next four years under the downside case, on the basis of securing the same amount of
funding as assumed in the base case. Management is focused on mitigating the risks around production, operating cost
increases and potential outflows associated with disputes in order to reduce the likelihood of these risks materialising,
or their impact in the event these risks materialise. Furthermore, the Directors have considered additional mitigating
actions that may be available to the Group, such as incremental commodity hedging executed in periods of higher oil
prices, alternative funding options, further rationalisation of the Group’s cost base including cuts to discretionary capital
expenditure, M&A, portfolio management and careful management of stakeholder relationships.

The IEA Net Zero case assumes a further reduction in short term oil price which if arose would result in a shortfall in
liquidity. In this scenario, management will adapt the business plan to maximise cash generation in the short to medium
term by deferring capital projects which will support the continuity of business. Based on expert forecasts for the short
term, management considers this scenario is unlikely to occur.

Based on the results of the analysis and the ability to mitigate some of the risks associated with the downside scenarios,
the Board of Directors has a reasonable expectation that the Group will be able to continue in operation and meet its
liabilities, including through refinancing activities, as they fall due over the five-year period of their assessment.

58 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Financial review

During the year we have
transformed our balance sheet
and demonstrated our ability to
access capital. Gross debt has
reduced by almost $400 million
and we are well positioned
to put in place a sustainable
capital structure.
Richard Miller
Chief Financial Officer

Income statement
Income statement (key metrics)

Revenue ($m)

Sales volumes (boepd)

Realised oil price ($/bbl)

Total revenue

Operating costs ($m)

2023

2022

55,754

55,170

77.5

1,634

88.0

1,783

Underlying cash operating costs1

(293)

(267)

Depreciation, Depletion and
Amortisation (DDA) of oil and gas
and leased assets

DDA before impairment charges
($/bbl)

(Overlift)/underlift and oil
stock movements

Administrative expenses

Gain on bargain purchase

Exploration costs written off

Impairment of property, plant
and equipment, net

Gain on bond buyback

Net financing costs

Profit from continuing activities
before tax

Income tax expense

(Loss)/Profit for the year from
continuing activities

Adjusted EBITDAX1

Basic (loss)/earnings per share (cents)

(431)

(411)

18.8

18.4

(109)

(56)

–

(27)

(408)

(286)

(206)

(110)

1,151

(7.6)

(51)

197

(105)

(391)

–

(293)

442

(393)

1,469

3.4

1. Alternative performance measures are reconciled on pages 189 to 190.

Revenue
Sales Oil volumes
During the year, there were 55,754 boepd (2022: 55,170
boepd) of liftings. The total number of liftings in Ghana is
comparable to the previous year with 13 in Jubilee (2022:
12) and 4 in TEN (2022: 5).

Realised oil price ($/bbl)
The Group’s realised oil price after hedging for the period
was $77.5/bbl and before hedging $84.3/bbl (2022: $88.0/
bbl and before hedging $104.3/bbl). Lower oil prices
compared to 2022 have resulted in a lower hedge loss
decreasing total revenue by $139 million in 2023 (2022:
decrease of $319 million).

Gas sales
Included in Total Revenue of $1,634 million is gas sales of
$38 million of which $29 million relates to Ghana. During
the year, Ghana exported 35,754 mmscf (gross) of gas at
an average price of $1.54/mmbtu.

Refer to Operational Performance section above for
detailed gas pricing.

Tullow Oil plc Annual Report and Accounts 2023 – 59

Strategic report

Corporate governance

Financial statements

Supplementary information

Financial review continued

Cost of sales
Underlying cash operating costs
Underlying cash operating costs amounted to $293 million;
$12.8/boe (2022: $267 million; $11.9/boe). Routine
operating costs largely remain unchanged from prior year.
The increase in the current year is largely due to non-
recurring expenditure.

Net financing costs
Net financing costs for the period were $286 million
(2022: $293 million). This decrease is mainly due to lower
interest of $13 million due to the bond redemption where
interest was applied on lower outstanding bonds partially
offset by an increase in the unwinding of discount on
decommissioning provision in Ghana of $4 million.

A reconciliation of net financing costs is included
in Note 5.

Taxation
The overall net tax expense of $206 million (2022: $393 million)
primarily relates to tax charges in respect of the Group’s
production activities in West Africa, reduced by deferred
tax credits associated with future UK decommissioning
expenditure, exploration write-offs and impairments.

Based on a profit before tax for the period of $96 million
(2022: $442 million), the effective tax rate is 214.3 per cent
(2022: 88.9 per cent). After adjusting for non-recurring
amounts related to gain on bond buybacks, exploration
write-offs, disposals, impairments, provisions and their
associated deferred tax benefit, the Group’s adjusted tax
rate is 70.2 per cent (2022:70.3 per cent). The effective tax
rate is in line with the prior year with the impact of non-
deductible expenditure in Ghana and Gabon and no UK
tax benefit arising from net interest and hedging expense
of $167m (2022: $570m) being partially offset by deferred
tax credits related to non-operated assets undergoing
decommissioning and prior year adjustments.

The Group’s future statutory effective tax rate is sensitive
to the geographic mix in which pre-tax profits arise.
There is no UK tax benefit from net interest and hedging
expenses, whereas net interest and hedging profits would
be taxable in the UK. Consequently, the Group’s tax charge
will continue to vary according to the jurisdictions in which
pre-tax profits occur.

Analysis of adjusted
effective tax rate ($m)

Adjusted
profit/(loss)
before tax

Tax
(expense)
/credit

Adjusted
effective
tax rate

Ghana

Gabon

Corporate

Other non-operated
& exploration

Total

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

584.4

994.8

216.0

316.1

(379.4)

(584.5)

1.5

15.9

422.5

742.3

(210.1)

(359.7)

(101.2)

(158.9)

9.6

3.5

4.7

(6.9)

(296.9)

(522.1)

35.9%

36.2%

46.8%

50.3%

2.5%

0.6%

-324.2%

43.5%

70.2%

70.3%

Depreciation, depletion and amortisation
DD&A charges before impairment on production and
development assets amounted to $431 million; $18.8/boe
(2022: $411 million: $18.4/boe). This increase in DD&A per
barrel is mainly attributable to downward revision of TEN
and Espoir 2P reserves offset by 2022 impairments.

Overlift and oil stock movements
The overlift expense is caused by a decrease in the
underlift position in Ghana due to timing of liftings as
well as reduced stock positions in Gabon from higher
sales volumes.

Administrative expenses
With the exception of the one-off corporate project
expenditure which was partially offset by lower insurance
premiums in the current year, Tullow has managed to
maintain administrative expenses at prior year levels
despite the inflationary environment.

Exploration costs written off
During 2023, the Group has written off exploration costs
of $27 million (2022: $105 million) predominantly driven
by Kenya where withdrawal of the JV Partners led to a re-
assessment of risks associated to reaching FID resulting in
a $17.9 million impairment and write-offs of $3.3 million in
Cote d’Ivoire, $3.4 million for the Akoum B well in Gabon
and $2.5 million in Guyana.

Impairment of property, plant
and equipment
The Group recognised a net impairment charge on PP&E
of $408 million in respect of 2023 (2022: $391 million)
largely driven by a reduction in TEN reserves partially
offset by oil price and updated cost assumptions. This
was primarily due to delays in gaining approval for the
amended TEN PoD which has led to the deferral of
investment and continued field decline. There was also
an impairment charge in Espoir due to an increase in cost
assumptions. Refer to page 191 for the full year end 2023
audited reserve and resource position. There were also
changes to estimates on the cost of decommissioning for
certain UK and Mauritania assets.

Gain on bond buyback
Refer to Borrowings section below.

60 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Adjusted EBITDAX
Adjusted EBITDAX for the year was $1,151 million (2022:
$1,469 million). The decrease from 2022 was predominantly
due to lower revenues associated with reduced oil prices.

(Loss)/profit for the year from continuing
activities and (loss)/earnings per share
The loss for the year from continuing activities amounted
to $110 million (2022: $49 million profit). Loss after
tax was driven mainly by impairments and write-offs
totalling $435 million. Basic loss per share was 7.6 cents
(2022: 3.4 cents earnings per share).

Balance sheet and liquidity management
Balance sheet and liquidity
management (key metrics)

2023

2022

Capital investment ($m)1

Derivative financial instruments ($m)

Borrowings ($m)

Underlying operating cash flow ($m)1

Free cash flow ($m)1

Net debt ($m)1

Gearing (times)1

380

(35)

354

(244)

(2,085)

(2,473)

813

170

1,608

1.4

972

267

1,864

1.3

1. Alternative performance measures are reconciled on pages 189 to 190.

Capital investment
Capital expenditure amounted to $380 million (2022:
$354 million) with $356 million invested in production and
development activities of which $288 million was invested
in Jubilee mainly comprising of $173 million spend on
drilling costs and $75 million on Jubilee South East (JSE)
and $24 million invested in exploration and appraisal
activities.

The Group’s 2024 capital expenditure is expected to
be c.$250 million and is expected to comprise Ghana
of c.$160 million, West African Non-Operated of c.$60
million, Kenya of c.$10 million and exploration spend of
c.$20 million.

Decommissioning
Decommissioning expenditure was $67 million in 2023
(2022: $72 million). The Group’s decommissioning
budget in 2024 is c.$70 million of which c.$20 million is
provisioning for future decommissioning in Ghana and
Gabon. Subject to programme scheduling, at the end of
2024 it is expected that c.$40 million of decommissioning
liabilities in the UK and Mauritania will remain.

Derivative financial instruments
Tullow has a material hedge portfolio in place to protect
against commodity price volatility and to ensure the
availability of cash flow for re-investment in capital
programmes that are driving business delivery.

At 31 December 2023, Tullow’s hedge portfolio provides
downside protection for c.60% of forecast production
entitlements in the first half of 2024 with c.$57/bbl
weighted average floors; for the same period, c.40% of
forecast production entitlements is capped at weighted
average sold calls of c.$77/bbl. In the second half of 2024,
Tullow’s hedge portfolio provides downside protection
for c.45% of forecast production entitlements with c.$60/
bbl weighted average floors; for the same period, c.20%
of forecast production entitlements is capped at weighted
average sold calls of c.$113/bbl.

For the period from June to December 2024, Tullow’s
hedge portfolio also includes three-way collars (with call
spreads) with weighted average sold calls of c.$85/bbl and
weighted average bought calls of c.$94/bbl, providing full
access to oil price upside beyond the bought call price on
c.10% of forecast production entitlements in this period.

All financial instruments that are initially recognised and
subsequently measured at fair value have been classified
in accordance with the hierarchy described in IFRS 13 Fair
Value Measurement. Fair value is the amount for which the
asset or liability could be exchanged in an arm’s length
transaction at the relevant date. Where available, fair values
are determined using quoted prices in active markets
(Level 1). To the extent that market prices are not available,
fair values are estimated by reference to market-based
transactions or using standard valuation techniques for
the applicable instruments and commodities involved
(Level 2).

All of the Group’s derivatives are Level 2 (2022: Level 2). There
were no transfers between fair value levels during the year.

At 31 December 2023, the Group’s derivative instruments
had a net negative fair value of $35 million (2022: net
negative $244 million).

Tullow Oil plc Annual Report and Accounts 2023 – 61

Strategic report

Corporate governance

Financial statements

Supplementary information

On 1 December 2023, the Group repurchased $115 million
nominal value of Senior Secured Notes due 2026 for $103
million cash consideration through an Unmodified Dutch
Auction. A gain on early bond redemption of $11 million is
recognised as other income in the income statement.

On 20 December 2023, the Group repurchased $141
million nominal value of Senior Notes due 2025 for $130
million cash consideration through a Modified Dutch
Auction. The cash consideration was funded through an
equivalent drawdown under the Glencore facility. A gain
on early bond redemption of $10 million is recognised as
other income in the Income Statement.

The Group’s total drawn debt reduced to $2.1 billion,
consisting of $493 million nominal value Senior Notes
due in March 2025, $1,485 million nominal value Senior
Secured Notes due in May 2026 and $130 million
outstanding under the Glencore facility.

Management regularly reviews options for optimising
the Group’s capital structure and may seek to retire or
purchase outstanding debt from time to time through cash
purchases or exchanges in the open market or otherwise.
Refer to Note 16 – Borrowings for further detail.

Credit ratings
Tullow maintains credit ratings with Standard & Poor’s
(S&P’s) and Moody’s Investors Service (Moody’s).

On 21 June 2023, following completion of a bond tender
announced on 12 June 2023, S&P’s downgraded Tullow’s
corporate credit rating to CCC+ with stable outlook, from
B- with negative outlook, and the rating of the Senior
Secured Notes due 2026 to CCC+ from B- and the rating
of the Senior Notes due 2025 to CCC from CCC+.

On 21 December 2023, following completion of the
bond tenders announced on 15 November 2023, S&P’s
upgraded Tullow’s corporate credit rating to B- with
negative outlook, and the rating of the Senior Secured
Notes due 2026 to B- and the rating of the Senior Notes
due 2025 to CCC+.

On 22 December 2023, Moody’s affirmed Tullow’s
corporate credit rating at Caa1, with negative outlook, and
the rating of the Senior Secured Notes due 2026 at Caa1
and the rating of the Senior Notes due 2025 at Caa2.

Financial review continued

Derivative financial instruments continued
The following table demonstrates the timing, volumes
and prices of the Group’s commodity hedge portfolio
at year end:

1H24 hedge
portfolio at 31
December 2023

Bought put
(floor)

bopd

Straight puts

11,217

$60.05

Sold
call

–

Collars

24,344

$55.37

$77.47

Bought
call

–

332

$60.00

$105.60

$114.53

35,893

$56.88

$77.85

$114.53

Three-way collars
(call spread)

Total/weighted
average

2H24 hedge
portfolio at 31
December 2023

Bought put
(floor)

bopd

Sold
call

–

Bought
call

–

Straight puts

6,250

$59.96

Collars

12,650

$60.36

$113.45

Three-way collars
(call spread)

Total/weighted
average

6,500

$60.00

$84.61

$93.55

25,400

$60.17 $103.66

$93.55

Since the start of 2024, the Company has added a further
c.4kbopd of c.$60/bbl downside protection for the
second half of 2024 with a combination of straight puts
and three-way collars with weighted average call spreads
of c.$79-$89/bbl.

Borrowings
On 15 May 2023, the Group made a mandatory prepayment
of $100 million of the Senior Secured Notes due 2026.

On 20 June 2023, the Group repurchased $167 million
nominal value of Senior Notes due 2025 for $100 million
cash consideration through an Unmodified Dutch
Auction. A gain on early bond redemption of $65 million is
recognised as other income in the income statement.

On 13 November 2023, Tullow announced that it had
entered into a $400 million five-year notes facility
agreement with Glencore Energy UK limited (Glencore). The
facility is available for 18 months and proceeds are to be
used for liability management of the Senior Notes due 2025.

62 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Underlying operating cash flow and free
cash flow
Underlying operating cash flow amounted to $813 million
(2022: $972 million.). The decrease of $159 million is due
to decrease in net revenue of $201 million driven by lower
oil prices and higher tax payments of $21 million partially
offset by lower Gabon royalty payments of $28 million
and a one-off payment in 2022 of $77 million relating to a
historic dispute that has now been settled.

Free cash flow has decreased to $170 million (2022:
$267 million) primarily due to a decrease in underlying
operating cash flow of $159 million as explained above.
There has been a decrease in net cash used in investing
activities of $59 million mainly due to the one-off Ghana
pre-emption payment and Uganda FID consideration
receipt in 2022 but this has been offset by an increase
in decommissioning spend of $14 million in the
current period.

Net debt and gearing
Reconciliation of net debt

FY 2022 net debt

Sales revenue

Operating costs

Other operating and administrative expenses

Operating cash flow before working
capital movements

Movement in working capital

Tax paid

Purchases of intangible exploration and evaluation
assets and property, plant and equipment

Other investing activities

Other financing activities

Gain on bond buyback

Foreign exchange loss on cash

FY 2023 net debt

1,864

(1,634)

293

279

(1,062)

(89)

275

292

(24)

435

(86)

1,608

Net debt reduced by $256 million during the year to
$1,608 million at 31 December 2023 (2022: $1,864 million),
due to generation of free cash flow of $170 million (as
explained above) as well as the gains on the three bond
buybacks totalling $86 million.

The Gearing ratio has increased to 1.4 times (2022: 1.3 times)
due to a decrease in Adjusted EBITDAX as explained above
primarily due to lower revenues associated with reduced
oil prices. This is in line with our target to reach gearing of
less than 1.5 times by year-end 2023.

Liquidity risk management and
going concern
The Directors consider the going concern assessment
period to be up to 31 March 2025. The Group closely
monitors and manages its liquidity headroom. Cash
forecasts are regularly produced, and sensitivities run for
different scenarios including, but not limited to, changes
in commodity prices, different production rates from the
Group’s producing assets and different outcomes on
ongoing disputes or litigation.

Management has applied the following oil price
assumptions for the going concern assessment:

• Base Case: $78/bbl for 2024, $75/bbl for 2024; and

• Low Case: $70/bbl for 2024, $70/bbl for 2025.

The Low Case includes, amongst other downside
assumptions, a 10% production decrease and 10%
increased operating costs compared to the Base Case.
Management has also considered additional outflows in
respect of all ongoing litigations/arbitrations within the
Low Case, with an additional $48 million outflow being
included for the cases expected to progress in the period
under assessment. The low case does not include the
outflow for the full exposure on Ghana BPRT arbitration of
$320 million (refer to Note 1(af) Ghana tax assessments for
details). The remaining arbitration cases are not expected
to conclude within the going concern period and no
outflows have been included in that respect.

At 31 December 2023, the Group had $1.0 billion liquidity
headroom consisting of c.$0.5 billion free cash and $0.5
billion available under the revolving credit facility.

The Group or its affiliates may, at any time and from time to
time, seek to retire or purchase outstanding debt through
cash purchases and/or exchanges, in open-market
purchases, privately negotiated transactions or otherwise.
Such repurchases or exchanges, if any, will be upon such
terms and at such prices as management may determine,
and will depend on prevailing market conditions, liquidity
requirements, contractual restrictions, and other factors.
The amounts involved may be material. The Group has
repaid $0.3 billion and $0.2 billion of the 2025 and 2026
Notes, respectively, during the year. The repayment of the
2025 Notes was partially funded by a drawdown of $130
million of the Glencore facility.

Tullow Oil plc Annual Report and Accounts 2023 – 63

Strategic report

Corporate governance

Financial statements

Supplementary information

Financial review continued

Liquidity risk management and going concern continued
The Group’s forecasts show that the Group and Parent Company will be able to operate within its current debt facilities and
have sufficient financial headroom for the going concern assessment period under its Base Case and Low Case at the end of
the going concern period, including a full drawdown of the Glencore debt facility to support the payment of the 2025 Notes.
The Directors have also performed a reverse stress test to establish the average oil price throughout the going concern period
required to reduce headroom to zero, that price was determined to be $45/bbl. Based on the analysis above, the Directors
have a reasonable expectation that the Group and Parent Company has adequate resources to continue in operational
existence for the foreseeable future. Thus, they have adopted the going concern basis of accounting in preparing the Annual
Report and Accounts.

Events since 31 December 2023
Gabon
On 29 February 2024, Tullow completed the Asset Swap agreement (ASA) transaction (discussed in note 14. Assets and
liabilities classified as held for sale) with Perenco Oil and Gas Gabon S.A (Perenco). The transaction is a cashless asset
swap to be achieved through the exchange of participating interests held by both parties in certain licences in Gabon.
Management have determined that the acquisition of the additional interest in the Tchatamba licence is a Business
Combination and the financial impacts cannot be disclosed in the Annual Report and Accounts as the measurement
of the assets acquired is now underway. Accordingly, the relevant disclosure will be made in the 2024 half year results.

Kenya
On 1 March 2024 Tullow received a letter from the Energy and Petroleum Regulatory Authority (EPRA) extending the
review period of the updated Field Development Plan to 30 June 2024.

There have not been any other events since 31 December 2023 that have resulted in a material impact on the year-
end results.

Richard Miller
Chief Financial Officer
5 March 2024

64 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Non-financial and sustainability information statement

We are committed to complying with the non-financial reporting requirements
contained in sections 414CA and 414CB of the Companies Act 2006.
The table below outlines our principal policies, risks and KPIs in relation to key non-financial and sustainable matters.
The location of further relevant information, including policy implementation and outcomes, is provided on the pages
highlighted below and is incorporated in this statement by cross-reference.

Matter and Policy

Principal risks

Non-financial KPIs

Outcomes

Climate change:
page 54.
Major accident event:
page 54.

Sustainability
Safety

Pages 33
and 34.

Environment
Climate Policy: Outlines our climate-change commitments
and the steps we are taking to mitigate the impact of climate
change risks on our business.
Safe and Sustainable Operations Policy: Sets out how
we achieve our goal of creating a working environment
that causes no harm to people, minimises our negative
environmental and social impacts and optimises the shared
benefits with our stakeholders.
Code of Ethical Conduct: Sets out the rules we expect
everyone to abide by.
Non-Technical Risk Policy: Sets out the framework to
identify, assess, mitigate and monitor social and environmental
impacts, and stakeholder issues.

Climate-related financial disclosures
Climate policy.
TCFD statement.

Climate change:
page 54.

Sustainability

People
Code of Ethical Conduct.
Safe and Sustainable Operations Policy.
Speak Up Policy: Outlines processes that enable reporting
of any concern; in particular, anything that is unsafe, unethical
or breaches our Code of Ethical Conduct or could harm an
individual or the Group.
Smart Working Policy: Outlines how we seek to promote
flexibility in the workplace with regards to duration, location
and work patterns, creating a more progressive approach to
how employees manage their work life balance.

Safety
Leadership
effectiveness
Sustainability

Capability cannot be
attracted, developed
or retained: page 55.
Major accident event:
page 54.
Compliance or
regulatory breach:
page 56.

Social and community
Code of Ethical Conduct.
Safe and Sustainable Operations Policy.
Non-Technical Risk Policy.

Business plan not
delivered: page 52.
Major accident event:
page 54.
Compliance or
regulatory breach:
page 56.

Business plan
implementation
Unlocking value
Safety
Sustainability

Pages 33
and 34
(Environmental
stewardship)
and 38 to
47 (TCFD
statement).

Pages 35 to 36
(Our people).
Pages 28 and
29 (Health and
safety).

Pages 30 to 32.

Tullow Oil plc Annual Report and Accounts 2023 – 65

Strategic report

Corporate governance

Financial statements

Supplementary information

Non-financial and sustainability information statement continued

Matter and Policy

Principal risks

Non-financial KPIs

Outcomes

Respect for human rights
Code of Ethical Conduct.
Speak Up Policy.
Human Rights Policy: Sets out our commitment to
respecting internationally recognised human rights and seeks
to implement the United Nations guiding principles on
business and human rights and the voluntary principles on
security and human rights.
Modern Slavery Act Transparency Statement: Outlines the
steps we take to address modern slavery risks.

Compliance or
regulatory breach:
page 56.

Sustainability

Page 37.

Anti-corruption and anti-bribery
Code of Ethical Conduct.
Speak Up Policy.

Compliance or
regulatory breach:
page 56.

Sustainability

Pages 35
and 36.

Our business model is set out on pages 14 and 15. The non-financial KPIs highlighted above, that are used to monitor our
progress, are detailed on pages 20 and 21.

Further information, including our key policies and documents, are available on our website at www.tullowoil.com/sustainability.

This Strategic Report and the information referred to herein have been approved by the Board and signed on its behalf on
5 March 2024 by:

Phuthuma Nhleko
Chair
5 March 2024

Adam Holland
Company Secretary
5 March 2024

66 – Tullow Oil plc Annual Report and Accounts 2023

Corporate governance

Corporate
governance

114

118

Chair’s letter

Board of Directors

Board leadership and company purpose

Division of responsibilities

Composition, succession and evaluation

Nominations Committee report

Audit Committee report

Safety and Sustainability Committee report

Remuneration report

Directors’ report

Statement of Directors’ responsibilities

Tullow Oil plc Annual Report and Accounts 2023 – 67

Financial statementsSupplementary informationStrategic reportStrategic report

Corporate governance

Financial statements

Supplementary information

Chair’s letter

During the year we have further
strengthened and refreshed the
Board’s composition.
Phuthuma Nhleko
Independent Non-Executive Chair

Board’s time1 %

Principal risks and governance

Culture and people

Safety and sustainability
(including stakeholder
engagement)

Capital structure and
capital allocation

Strategy and growth

Business operations and
portfolio management

20%

15%

10%

15%

30%

Percentages are approximate.

68 – Tullow Oil plc Annual Report and Accounts 2023

Dear Shareholder,
On behalf of the Board, I am pleased to present the Corporate
Governance report for the year ended 31 December 2023. We
recognise that high standards of governance and effective
Board oversight are critical to Tullow’s success. In this report,
we outline how the Board and its Committees have monitored
the execution of the Company’s strategy and its performance
and ensured that appropriate resources, leadership and
controls are in place to help support the creation of long-term
sustainable value for our shareholders and wider stakeholders.

Board changes
During the year, we further strengthened and refreshed
the composition of our Board to ensure that we have the
appropriate balance of skills and experience, and diversity
of thought, to support Tullow’s long-term success.

Following confirmation of his appointment as Chief
Financial Officer, Richard Miller joined the Board as an
Executive Director in January 2023.

Having served nine years, Mike Daly, independent Non-
Executive Director, retired from the Board at the Annual
General Meeting (AGM) held in May 2023. Once again,
I would like to take the opportunity to thank Mike for
his service and invaluable contribution to Board and
Committee discussions.

During the year, we appointed two new independent Non-
Executive Directors. Roald Goethe joined the Board with
effect from 24 February 2023 and Rebecca Wiles joined
the Board with effect from 28 June 2023. Roald is a highly
experienced oil and gas executive with a strong track record
of buying, selling, financing and building businesses in
West Africa. Rebecca brings deep technical subsurface
and geoscience expertise with significant emerging market
experience and extensive commercial and operational
experience gained during her 33-year career at BP plc.
Their biographical details are included on page 71.

Culture
If we are to fulfil our purpose we must build trust and the way
we do business is critically important. During the year we
redefined our culture and relaunched our values, to ensure
our culture continues to align with our purpose and strategy.
We are committed to fostering an inclusive, collaborative and
performance-driven culture which is underpinned by our
values: ‘Aim High’, ‘Own it’, and ‘Be True’ (see page 35). Our ‘Be
true’ value drives ethical behaviour to ensure that at all times
we do what is right. Our ‘Aim high’ and ‘Own it’ values promote
a culture of openness, empowerment, performance and
continuous improvement. In 2024, we will continue to further
embed these values throughout the organisation.

Diversity
The Board is comprised of a diverse mix of gender, social
and ethnic backgrounds, knowledge, personal attributes,
skills and experience. This diversity is reflective of the areas
in which we do business and provides a mix of perspectives,
which contributes to effective Board dynamics.

Strategic report

Corporate governance

Financial statements

Supplementary information

The Board is committed to increasing diversity across the
Group and supports the recommendations of the FTSE
Women Leaders Review on gender diversity and the Parker
review on ethnicity diversity. Further information about the
diversity profile of the Board and the senior management
is included on pages 81.

Code compliance
The Board is committed to the highest standards
of corporate governance as set out in the 2018 UK
Corporate Governance Code2 (the Code). As part of its
annual governance review cycle, the Board reviewed the
Company’s compliance with the Code, and I am pleased
to confirm that, for the financial year ended 31 December
2023, the Company has applied the Code Principles and
complied with all relevant Provisions of the Code.

The Board is cognisant of the changes to the Code, which
were published in January 2024 and remains committed to
full compliance, as far as practicable.

In this Corporate Governance Report we explain how we
have applied the principles of the Code and the table
below highlights where relevant information can be found.

Conclusion
As highlighted in my statement on pages 4 and 5, we
have made good progress in delivering our strategy
and Tullow’s evolution is gaining momentum. Effective
corporate governance practices are fundamental to that
delivery and the Board will continue to ensure that our
governance framework further strengthens and develops
to support our evolving business.

Phuthuma Nhleko
Independent Non-Executive Chair
5 March 2024

Code application

Principle

Board leadership and company purpose

Further information

An effective and entrepreneurial Board that promotes long-term
sustainable success that generates value for shareholders and
contributes to society.

2023 Board activity highlights. See page 74.

Board consideration of stakeholder issues in its decision making and
Section 172 statement. See pages 24 and 25 and page 75.

Establishment of purpose, values and strategy and promotion of
desired culture.

Purpose, values , culture and strategy. See page 73.

Ensuring resources are in place to meet objectives, measuring
performance and establishing controls which assess and manage risk.

Audit Committee report. See pages 82 to 86.

Effective stakeholder engagement and participation.

Engaging with our stakeholders. See pages 23 and 75.

Board consideration of stakeholder issues in its decision making and
Section 172 statement. See pages 24 and 25 and page 75.

Ensuring workforce policies and practices are consistent with
the company’s values and support long-term success, and that
mechanisms are in place to allow the workforce to raise concerns.

Engagement with workforce. See pages 23 and 75.

Independent whistleblowing procedures. See page 86.

Division of responsibilities

Chair’s role.

Clear division of responsibilities and appropriate combination of
executive and non-executive roles.

Division of responsibilities. See page 76.

Governance framework. See page 72.

Division of responsibilities. See page 76.

Time commitment, constructive challenge and strategic guidance.

Time commitment and external appointments. See page 73.

Effective and efficient board.

Composition, succession and evaluation. See pages 77 and 78.

Composition, succession and evaluation

Board appointments and succession.

Nominations Committee report. See pages 79 to 81.

Combination of skills, experience and knowledge

Board of Directors. See pages 70 and 71.

Annual evaluation

Composition, succession and evaluation. See pages 77 and 78.

Audit, risk and internal control

Independent and effective internal and external audit functions.

Audit Committee report. See pages 82 to 86.

Fair, balanced and understandable assessment.

Effectiveness of audit, risk and internal control. See pages 85 and 86.

Risk management and internal control systems.

Audit Committee report. See pages 85 and 86.

Remuneration

Remuneration policy and practices.

Remuneration policy. See pages 104 to 113.

Development of remuneration policy and packages.

Directors’ Remuneration Policy report. See pages 104 to 113.

Independent judgement and discretion.

Remuneration Committee report. See pages 89 to 91.

A copy of the Code is available at www.frc.org.uk.

Tullow Oil plc Annual Report and Accounts 2023 – 69

Strategic report

Corporate governance

Financial statements

Supplementary information

Board of Directors

1 – Phuthuma Nhleko
Independent Non-Executive Chair
Appointed: October 2021
Key strengths: Executive leadership, public company
governance and leadership, emerging markets, engineering,
investor relations, corporate finance, business development, risk
management, technology and innovation.
Experience: Extensive emerging markets experience
having worked successfully across Africa over the past three
decades including MTN Group (MTN), the leading pan-African
telecommunications company, where he served as the
company’s Chief Executive from 2002 to 2011. He returned to
MTN in 2013 and until August 2021 held various roles including
Non-Executive Director, Executive Chairman and a member of
the company’s international advisory board. He has previously
served as a Non-Executive Director of BP plc, Anglo-American
plc, Nedbank and Old Mutual.
Current external appointments: Chairman of Phembani Group,
an investment group which he founded in 1994, Chairman of the
Johannesburg Stock Exchange Ltd, Non-Executive Director of
South African downstream energy company, Engen Petroleum
and Non-Executive Director of IHS Towers, the NYSE-listed
Emerging Markets Telecom Infrastructure Provider.

2 – Rahul Dhir
Chief Executive Officer
Appointed: July 2020
Key strengths: Upstream business, exploration, development
and operations, executive leadership, capital markets, M&A,
environment, health, safety and sustainability.
Experience: Substantial leadership experience in the oil and gas
industry, having founded Delonex Energy, an Africa-focused oil and
gas company in 2013. Prior to establishing Delonex, Rahul spent
six years at Cairn India as Chief Executive Officer and Managing
Director. He started his career as a Petroleum Engineer, before
moving into investment banking where he led teams at Morgan
Stanley and Merrill Lynch, advising major oil and gas companies
on merger and acquisition and capital market-related issues.
Current external appointments: Member of the International
Board of Advisors at the University of Texas at Austin.

3 – Richard Miller
Chief Financial Officer
Appointed: January 2023
Key strengths: Upstream oil and gas, capital markets, M&A,
financial management, audit and assurance.
Experience: Extensive oil and gas and financial experience
having joined Tullow in 2011 and has led the Tullow Finance
team, supported a number of acquisitions, disposals and capital
markets transactions. Richard is a chartered accountant and he
joined Tullow from Ernst and Young LLP where he worked in the
audit and assurance practice.
Current external appointments: None.

Committee membership key

Committee Chair

A Audit Committee

N Nominations Committee

R Remuneration Committee

S Safety and Sustainability Committee

70 – Tullow Oil plc Annual Report and Accounts 2023

4 – Martin Greenslade
Senior Independent Director
Appointment: November 2019
Key strengths: Corporate finance, accounting and audit, risk
management and executive and public company leadership.
Experience: Extensive corporate financial experience from a
35-year career in the property, engineering and financial sectors in
the UK and across Africa, Scandinavia and Europe. From 2005 to
2021 Martin was Chief Financial Officer at Land Securities Group
plc, a listed UK real estate company. Previously, he spent five years
as group Finance Director of Alvis plc, an international defence and
engineering company. Martin is a chartered accountant.
Current external appointments: Group Chief Financial Officer
at Red Sea Global, Saudi Arabia and a board trustee of the UK arm
of International Justice Mission, a human rights charity focused
on protecting the poor from violence and ending human slavery.

5 – Sheila Khama
Independent Non-Executive Director
Appointment: April 2019
Key strengths: Extractives project and policy reform, executive
leadership, corporate governance, business development,
public–private partnership and sustainability.
Experience: Significant executive experience in the banking
and natural resources sectors across Africa having served as
the Chief Executive Officer of De Beers Botswana from 2005 to
2010 and then director of the extractives advisory programme at
the African Centre for Economic Transformation. In 2013, Sheila
became a director of the Natural Resources Centre at the African
Development Bank, Abidjan, Côte d’Ivoire and subsequently in
2016 a policy adviser at the World Bank in Washington. In both
roles she advised host governments on sustainable development
policies for natural resources. She also represented the African
Development Bank as an observer on the international board of
directors of the Extractive Industries Transparency Initiative.
Current external appointments: Member of the Advisory
Board of the Centre for Sustainable Development Investment,
Columbia University, and at Mining Indaba, a member of the
audit committee of the United Nations Office of Operations, a
Non-Executive Director of the Development Partner Institute, a
Non-Executive Director of Base Resources Limited and a Non-
Executive Director of The Metals Company, which is listed on the
NASDAQ Stock Exchange in New York.

6 – Genevieve Sangudi
Independent Non-Executive Director
Appointment: April 2019
Key strengths: Corporate finance, accounting and audit,
business development, risk management, executive leadership
and investor relations.
Experience: Considerable marketing, investment and fund
management experience gained during a 22-year career in the
financial sector in the US and across Africa. Genevieve began
her career in business development as a marketing executive
at Procter & Gamble, Boston, before joining Emerging Capital
Partners, a pan-African private equity firm, as a partner and
managing director. At Emerging Capital Partners Genevieve
served on the boards of portfolio companies working closely
with the executive teams and set up the company’s operations
in Nigeria.
Current external appointments: Managing Director,
Sub-Saharan Africa, for the American private equity company
Carlyle Group.

Strategic report

Corporate governance

Financial statements

Supplementary information

7 – Mitchell Ingram
Independent Non-Executive Director
Appointment: September 2020
Key strengths: Upstream business, corporate finance,
accounting and audit, business development, risk management,
executive leadership, investor and government relations.
Experience: Over 28 years of experience in the oil and natural
gas industry. Mitchell joined Anadarko in 2015 and became
Executive Vice-President of International, Deep Water, and
Exploration in 2018. Prior to this, he served as Development
Director and then Asset General Manager for the Karachaganack
field in Kazakhstan at BG Group, following his time as Managing
Director of QGC Australia. Mitchell began his career at Occidental
and spent 22 years in a number of technical and operational roles
in the UK North Sea, Qatar and Libya.
Current external appointments: None.

8 – Roald Goethe
Independent Non-Executive Director
Appointment: February 2023
Key strengths: Upstream business, finance, development,
executive leadership, capital markets, M&A.
Experience: Experienced oil and gas executive with extensive
commercial knowledge of the energy industry in Africa. In
2006 Roald founded Delaney Petroleum Ltd, trading crude oil
and petroleum products predominantly in West Africa and the
Middle East. Prior to establishing Delaney, Roald spent 11 years at
Trafigura Group, where he had an integral role in the development
of the group’s oil trading activities, primarily in West Africa.
Current external appointments: Director of ROFGO
Racing Limited.

9 – Rebecca Wiles
Independent Non-Executive Director
Appointment: June 2023
Key strengths: Subsurface, geoscience, technology, emerging
markets, commercial, government relations, safety and risk
management and executive leadership.
Experience: Significant technical subsurface and geoscience
expertise gained during 33-year career at BP plc (BP). She also
has extensive emerging markets, commercial and operational
experience having served as Vice President of Exploration
and Appraisal at BP Angola and as Managing Director of BP’s
Norway business.
Current external appointments: Non-Executive Director of
SES Water.

Tenure

0–2 years

3–5 years

Nationality
British

Motswana

South African

Tanzanian

German

Gender
Male

Female

Independence
Independent

Non-independent

Tullow Oil plc Annual Report and Accounts 2023 – 71

Strategic report

Corporate governance

Financial statements

Supplementary information

Governance framework

The Board
• Led by Chair and collectively responsible for setting the Company’s strategy to deliver long-term value to

shareholders and wider stakeholders.

• Ensures that the appropriate resources, leadership and effective controls are in place to deliver the strategy.

• Sets the Company’s culture and values.

• Monitors the business’s performance, oversees risk management and determines the Company’s risk appetite.

• Accountable for the stewardship of the Company’s business to the shareholders and wider stakeholders.

Committees

Nominations
Committee
• Responsible for

reviewing the balance
of skills, knowledge,
experience and diversity
of the Board and its
Committees.

• Oversees the recruitment

and appointment of
Directors.

• Ensures plans are

in place for orderly
succession for the Board
and senior management
and oversees the
development of a diverse
pipeline for succession.

• Monitors the

development and
implementation of the
inclusion and diversity
strategy at Board level
and throughout the
Company.

Audit
Committee
• Responsible for the
integrity of financial
reporting and disclosures
and reviews the controls
in place.

• Oversees the relationship
with the external auditor,
including monitoring
independence.
• Reviews significant

financial reporting and
accounting policy issues.

• Oversees the Group’s

internal audit programme
and the process of
identifying principal
and emerging risks and
ensuring that they are
managed effectively.

Safety and
Sustainability
Committee
• Responsible for and

monitors occupational
and process safety,
people and asset
security, health
and environmental
stewardship, including
protection of the
environment, climate and
biodiversity.

• Oversees the Company’s
sustainability-related
governance matters
including protection of
human rights, socio-
political issues and
sustainability-related
disclosures.

• Oversees

implementation of the
Company’s strategic
sustainability priorities.

Remuneration
Committee
• Responsible for

the remuneration
arrangements for
the Chair, Executive
Directors, and senior
management, in line with
the Remuneration Policy.

• Ensures rewards and

incentives closely align
with the successful
delivery of the
Company’s long-term
purpose and strategy
as well as those of the
shareholders and wider
stakeholders, including
the workforce.

• Reviews the

remuneration
arrangements for the
wider workforce.

See pages 79 to 81.

See pages 82 to 86.

See pages 87 and 88.

See pages 89 to 113.

Senior Leadership Team

Chief Executive Officer, Chief Financial Officer and five senior managers
• Led by the Chief Executive Officer and responsible for the delivery and execution of the Board’s strategy

and day-to-day management of the Company’s business including operational performance.

Jean-Medard
Madama
Director of Non-
Operated and
Exploration

Julia Ross
Director of People and
Sustainability

Wissam Al-
Monthiry
Ghana
Managing Director

Mike Walsh
General Counsel

Stuart Cooper
Director of Strategy,
Commercial and
Business Development

72 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Board leadership and company purpose

Purpose, culture, values and strategy
The Board is accountable to the Company’s shareholders
and wider stakeholders for the creation and delivery
of long-term, sustainable operational and financial
performance for the enhancement of shareholder and
stakeholder value. The Board discharges its responsibilities
in a number of ways including ensuring that the Group’s
purpose, values and strategy align and that the necessary
resources are available to achieve the agreed strategic priorities.

The Board sets the Group’s core values and behaviours
which shape our culture and ensures that it takes decisions
that are aligned to our values. The Board regularly reviews
the policies implemented, including our Code of Ethical
Conduct, to ensure we continue to have the right framework
and working practices in place, ensuring that at all times
we do what is right and promote a culture of openness,
empowerment, performance and continuous improvement.

During the year we reviewed our culture and refreshed
our values. Further information about our values and this
process, is set out on page 35.

The Board utilises a number of methods to understand,
monitor and assess the Company’s culture including:

• Employee engagement: Through its quarterly meeting
with the TAP, our employee advisory panel, the Board
has direct access to the workforce and is able to build a
better understanding of their experiences and concerns,
including the working practices that operate across
the Group. This engagement also enables the Board to
ensure alignment of our culture, purpose and strategic
priorities.

• Safety: The Board, supported by its Committees, reviews
safety incident reports and ensures that management
deploy appropriate mitigating actions and provide
regular progress updates.

• Site visits: As far as practicable, the Board as a collective
and/or individual Board members, undertake site visits.
These visits allow the Board to gain first-hand experience
of our culture in action and gain a deeper understanding
of our business. During the year, the entire Board visited
our Ghana office and met with a number of employees.

• Policies and procedures: The Board ensures that the
right practices and processes are in place to support
our culture. These policies, which cover areas such
as sustainability, ethical conduct, anti-bribery and
whistleblowing, set our expectations of the behaviours
and practices expected, inform behaviour and embed
good decision making in line with our desired culture.
The policies are reviewed regularly and updated as
required to ensure they continue to promote the right
culture and practices that are consistent with our values.

• Whistleblowing: The Board receives reports from the
Group’s whistleblowing facility, and regularly reviews
the effectiveness of the Group’s whistleblowing
arrangements. See page 86. In addition, the Audit
Committee’s supervision of the Group’s internal controls
framework and review of any compliance issues, informs
the Board’s assessment and monitoring of our culture.

Governance framework
The Board operates through a governance framework
(see adjacent page) with clear procedures, lines of
responsibility and delegated authorities to ensure that our
strategy is implemented, and key risks are assessed and
managed effectively.

Board meetings and attendance in 2023
The Board met five times during the year, in person. There
was an additional meeting held in July which was devoted
to an extensive review of the Group’s long-term strategy.
The September Board and Committee meetings were
held in Ghana and provided the Directors with first-hand
insights into the Company’s operations and an opportunity
to engage with stakeholders.

In addition to the five scheduled Board meetings,
additional unscheduled ad hoc Board calls were held
during the year to discuss specific items. In certain
circumstances meetings are called at short notice and,
due to prior business commitments and time differences
Directors may not always be able to attend. If a Director
is unable to attend a meeting because of exceptional
circumstances, they receive the papers in advance of the
meeting and have the opportunity to discuss any matters
they wish to raise with the relevant Chair or the Company
Secretary. Directors are provided with feedback about
decisions made at any meeting they are unable to attend.

Time commitment and external appointments
The expected time commitment of the Chair and Non-
Executive Directors is agreed and set out in writing in
their letter of appointment. The Board has considered
the individual Directors’ attendance, their contribution,
and their external appointments, and is satisfied that
each of the Directors is able to allocate sufficient time
to the Group to discharge his or her responsibilities
effectively. As evidenced by the attendance table below,
the attendance remained high and demonstrates the
Directors’ ability to devote sufficient time to their role. In
line with the Code, Directors are required to seek Board
approval prior to taking on any additional significant
external appointments.

Tullow Oil plc Annual Report and Accounts 2023 – 73

Strategic report

Corporate governance

Financial statements

Supplementary information

Board leadership and Company purpose continued

Time commitment and external appointments continued
The table below shows the number of scheduled Board meetings each Director attended during the year together with
the number of meetings they were entitled to attend.

Director

Phuthuma Nhleko Independent Non-Executive Chair

Rahul Dhir Chief Executive Officer

Richard Miller Chief Financial Officer

Martin Greenslade Senior Independent Director

Mitchell Ingram Independent Non-Executive Director

Sheila Khama Independent Non-Executive Director

Genevieve Sangudi Independent Non-Executive Director

Roald Goethe1 Independent Non-Executive Director

Rebecca Wiles2 Independent Non-Executive Director

Mike Daly3 Independent Non-Executive Director

Total

1. Joined the Board on 24 February 2023.

2. Joined the Board on 28 June 2023.

3. Retired from the Board on 24 May 2023.

Scheduled
meeting
attendance

5/5

3/3

2/2

During the year, there were three unscheduled Board meetings which all Directors attended. In addition to the formal
Board meetings held throughout the year, the Chair regularly met with the Non-Executive Directors without the presence
of the Executive Directors. Also, during the year, the Senior Independent Director held a meeting with the Non-Executive
Directors without the presence of the Chair, to evaluate his performance.

Board activities during the year

Strategy and business plans

Performance and risk management

The Board considered and oversaw the delivery of our strategic
objectives for the benefit of our shareholders and wider
stakeholders including reviewing the following matters:
• Strategy, the Group’s strategic plan and strategic updates.
• Capital structure.
• Capital allocation.
• Growth opportunities.

The Board regularly reviewed financial performance and risks, as
well as risk controls and processes including:
• Business reviews, including operational performance.
• Health and safety performance.
• 2022 preliminary results statements.
• Cyber security risk management.
• Enterprise Risk Management framework including climate-

related risks.

• Annual tax update.
• Going concern and viability statements.
• Audit fees.
• Sustainability – including climate change and energy transition.

Governance, political and regulatory environment

Culture and stakeholders

Recognising the importance of understanding the views and
interests of our people and our wider stakeholders, the Board:
• Reviewed our Employee Value Proposition (EVP).
• Considered feedback from Board participation in the Tullow

Advisory Panel.

• Reviewed our culture and values to ensure alignment with our

purpose and feedback.

• Considered investor feedback.
• Reviewed a number of inclusion and diversity initiatives.

The Board received regular reports from the Company Secretary
on governance and regulatory matters, as well as regular
updates and insights on market trends and developments. Key
governance matters considered and reviewed included:
• 2022 Annual Report and Accounts.
• Annual General Meeting.
• Board effectiveness including evaluation and independence.
• Succession planning and committee composition.
• Reports from Committee Chairs.
• Terms of reference reviews.
• Reports on workforce engagement.
• Proposed changes to the Code.
• Macro and geopolitical developments.
• Modern Slavery Act Transparency Statement.
• TCFD disclosure.

74 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Schedule of matters reserved to the Board
There are certain key responsibilities that the Board does
not delegate, and which are reserved for its consideration.
The Board’s responsibilities include: the development of
strategy; the approval of major capital expenditure; the
Group’s capital structure; the consideration of significant
financing matters; and oversight of policies and procedures.
The full schedule of matters reserved to the Board is
available at www.tullowoil.com/about-us/corporate-
governance. The Board reviews the schedule on an annual
basis and the latest review took place in November 2023.

on a wide range of topics including staff development,
employee workload and diversity and inclusion, and the
Company’s strategic objectives. This forum helps to ensure
that our employees’ perspectives are considered by the Board
and its Committees in their decision-making processes. It also
provides an opportunity for the Non-Executive Directors to
hear about our business from employee’s perspectives and
gain more insight about our culture and operations. Following
their meetings with the TAP, the Non-Executive Directors
formally report to the Board on the key matters arising from
the discussions. During 2023, issues considered by the Board
following meetings of the TAP included:

Conflicts of interest
Directors have a statutory duty to avoid situations in which
they have, or may have, interests that conflict with those of
Tullow, unless that conflict is first authorised by the Board.
The Company has procedures in place for managing
conflicts of interest. The Company’s Articles of Association
also contain provisions to allow the Directors to authorise
potential conflicts of interest so that a Director is not in
breach of his or her duty under company law.

Should a Director become aware that he or she has an
interest, directly or indirectly, in an existing or proposed
transaction with Tullow, they are required to notify the
Board in line with the Company’s Articles of Association.
If a conflict does arise, the Director is excluded from
discussions and all Directors have a continuing duty to
update any changes to their conflicts of interest.

Stakeholder engagement

Engaging with our stakeholders
Strong relationships built on trust remain key to the
delivery of the Group’s strategy and goals. Information
about our stakeholders, including how the Board engages
with them, is set out on page 23.

During 2023 the Chair, Executive Directors and Non-
Executive Directors frequently engaged with many of
our stakeholders and the insights arising from such
engagement was considered and discussed by the Board
as a whole and taken into consideration during Board
decision making. Our Section 172 statement and examples
of how the Board took account of stakeholders in its
decision making is included on pages 24 and 25.

Workforce engagement
Our people have a key role to play in Tullow’s evolution and
the Board recognises the importance of engaging with
them to understand their views and their valuable insights
about our business.

In accordance with Provision 5 of the Code, we operate
a dedicated formal advisory panel, the Tullow Advisory
Panel (TAP), which consists of eight elected colleague
representatives from across our different locations. The TAP
meets quarterly with members of the SLT and on separate
occasions with two independent Non-Executive Directors. The
purpose of these meetings is to discuss colleagues’ feedback

• Internal communication strategy.

• Hybrid and flexible working arrangements.

• Workforce remuneration arrangements.

In September 2023 the Board meeting took place in
Ghana, and all members of the Board met with a number
of our Ghana-based employees during informal receptions
and small group discussions.

AGM voting
At the 2023 AGM we received less than 80% approval for
Resolution 19, which sought authority for the Company
to purchase its own shares. The Board continued its
engagement with our major shareholders who voted
against the resolution to better understand and address
their concerns. After careful consideration, and taking into
consideration the views of our shareholders, the Directors
have decided not to seek permission for the Company to
purchase its own shares at the forthcoming 2024 AGM.

Non-Executive Directors, Rebecca Wiles and Sheila
Khama, together with Julia Ross (Director of People
and Sustainability) meeting the Chief Executive
of Youth Bridge Foundation, Seth Oteng, during
their visit to the foundation in September 2023.
We have partnered with this Ghana-based youth-
focused non-governmental organisation since 2018
to support science, technology, engineering, and
mathematics (STEM) programmes targeted at junior
and senior high school pupils in the areas where
we operate. Initiatives include mobile STEM clinics,
which provide access to science equipment and
enable pupils to undertake laboratory experiments
to aid their understanding of theoretical concepts.

Tullow Oil plc Annual Report and Accounts 2023 – 75

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Corporate governance

Financial statements

Supplementary information

Division of responsibilities

Responsibilities
As at the date of this report, our Board comprised of
the Chair, seven independent Non-Executive Directors
and two Executive Directors. There is a clear division
of responsibilities, which ensures responsibility and
accountability. The roles of the Chair and Chief Executive
are held separately and clearly defined and agreed as set
out in the division of responsibilities approved each year
by the Board. See summary below.

Board independence
The independence of our Non-Executive Directors is
formally reviewed annually by the Nominations Committee.
All of the Non-Executive Directors who served during the
year were considered by the Board to be independent for
the purposes of the Code and the Chair was considered
independent upon his appointment. These considerations
specifically include reference to Provision 10 of the Code
and the Director’s shareholdings in the Company.

The Chair
The Chair of our Board, Phuthuma Nhleko, is responsible
for leading the Board and its overall effectiveness and for
promoting the highest standards of integrity, probity, and
corporate governance. The Chair is also responsible for
effective shareholder engagement and building strong
relationships with our wider stakeholders. The Chair meets
regularly with the other Non-Executive Directors, without
Executive Directors present, to review Board discussions
and engagement as well as the performance of the SLT.

The Chief Executive Officer
Our Chief Executive Officer (CEO), Rahul Dhir, is
responsible for the overall performance and day-to-day
operational management of our business. The CEO
responsibilities include executing the Group’s strategy and
overall commercial objectives, monitoring the progress
against the Company’s strategic objectives and the
performance of the Senior Leadership Team (SLT).

The Senior Independent Director (SID)
Our SID, Martin Greenslade, provides a sounding board for
the Chair. The Board is fully satisfied that he demonstrates
complete independence and robustness of character in
this role. The SID is available to meet shareholders if they
have concerns that cannot be resolved through discussion
with the Chair or for matters where such contact would
be inappropriate.

In addition, during the year the SID meets with the other
Non-Executive Directors, without the Chair present, to
evaluate the Chair’s performance.

Non-Executive Directors (NEDs)
Our independent NEDs assess, challenge and monitor
the Executive Directors’ delivery of strategy within the risk
and governance structure agreed by the Board. As Board
Committee members, they also review the integrity of the
Company’s financial information, consider ESG issues,
recommend appropriate succession plans, and set the
Directors’ remuneration.

In accordance with the Code, all of the Directors will
retire at the 2024 AGM and submit themselves for
appointment or re-appointment by shareholders. Each
of the Non-Executive Directors seeking appointment or
re-appointment are considered to be independent in
character and judgement.

The Non-Executive Directors can obtain independent
professional advice, at the Company’s expense, in the
performance of their duties.

Board Committees
The Board has delegated some of its responsibilities to
four Committees: the Audit Committee, the Nominations
Committee, the Safety and Sustainability Committee and
the Remuneration Committee (see page 72). The Board
is satisfied that the Committees have sufficient time and
resources to carry out their duties effectively. Their terms
of reference are reviewed and approved annually by the
Board and the respective Committee Chairs report on their
activities to the Board. The individual Committee terms of
reference are available at www.tullowoil.com/about-us/
corporate-governance/board-committees.

Company Secretary
The Board is supported and advised by the Company
Secretary who ensures that it has the policies, processes,
information, time and resources it needs for it to function
effectively and efficiently. The Company Secretary is
also responsible for ensuring compliance with all Board
procedures and for providing advice to Directors when
required. The Company Secretary acts as secretary to
the Audit, Nominations, Safety and Sustainability and
Remuneration Committees and has direct access to the
Chairs of these Committees. All Directors have access
to the advice and services of the Company Secretary,
whose appointment and removal is a matter reserved for
the Board.

76 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Composition, succession and evaluation

Composition, skills and experience
To ensure that the Executive Directors and senior
management possess the necessary skills and experience
required for the strategy of the business, the Board has
established a Nominations Committee (see pages 79 to 81)
to oversee the process of appointments and succession
planning for Directors and other Senior Managers. The
role of the Nominations Committee is critical in ensuring
that the Group’s Board and Committee composition and
balance support both the Group’s business ambitions and
best practice in the area of corporate governance.

The Board comprises seven independent Non-Executive
Directors and two Executive Directors. Their respective
relevant skills and experience are detailed on pages 70
and 71 and below.

Induction, training and development
Upon joining the Board, Directors receive induction
programmes which are specifically designed to
complement their background, experience and knowledge
with a more detailed understanding of the upstream
industry and other matters regularly discussed by the
Board. The programmes include one-to-one meetings with
members of the SLT, functional leaders and, where possible,
visits to the Group’s principal offices and operations. The
Directors also receive an overview of their duties, corporate
governance policies and Board processes. As required,
professional advisers and subject matter experts are invited

to Board and Committee meetings to provide in-depth
updates. The Company Secretary also provides regular
updates to the Board and its Committee on regulatory and
corporate governance matters.

In September 2023, as part of their induction programmes,
Roald Goethe and Rebecca Wiles visited the Kwame
Nkrumah floating production storage and offloading vessel
which operates in the Jubilee oil fields off the coast of
Ghana. During the same visit to Ghana, they received a
technical ‘deep dive’ presentation on the portfolio of oil and
gas assets held by the Group in Ghana, including detail on
seismic data and capital allocation programmes. Later in
the year, they received a technical presentation in London
showcasing the people, workflows and technologies in the
subsurface realm.

Board evaluation
Each year, in line with the Code, we undertake a formal
and rigorous evaluation of the performance of the Board
and its Committees. At least every third year, this process
is facilitated by an external evaluator. Our last externally
facilitated evaluation took place in 2022 and was facilitated
by Heidrick & Struggles (the 2022 evaluation). Heidrick &
Struggles, have previously assisted Tullow with executive
searches but have no other connections with the Company.
Information about the 2022 evaluation process, its findings
and actions taken to address these findings is included in
our 2022 Annual Report and Accounts on pages 69 and 70.

The Company Secretary facilitated the evaluation in respect of the year ended 31 December 2023 (the 2023 evaluation),
through the process detailed below.

Phase 1

Phase 2

Phase 3

• Formulated questionnaires for
the Board and its Committees,
in conjunction with the Chair,
taking into consideration the
Code, other best practice
recommendations and findings
of the 2022 evaluation.

• The questionnaire covered

areas including composition,
effectiveness, information flow,
and Committee strengths and
areas of improvement.

• Circulated questionnaires to

• The Company Secretary

Board members as well as other
regular attendees of the Board
and Committee meetings,
including the SLT.

• Individual responses were
collated by the Company
Secretary who prepared
anonymised summaries, which
were discussed with the Chair.

prepared a summary of the
findings and suggested actions
for the forthcoming year.

• Final report considered by Board
at its meeting in February 2024.

• The Board agreed on actions and
milestones to be implemented
and monitored.

Tullow Oil plc Annual Report and Accounts 2023 – 77

Strategic report

Corporate governance

Financial statements

Supplementary information

Composition, succession and evaluation continued

Board evaluation continued
The conclusions of the 2023 evaluation were positive, confirming that the Board continues to operate effectively
with strong leadership and a continual enhancement of skills and experience. The relationships among the Chair, the
Senior Independent Director, Non-Executive Directors and the Executive Directors remained of a high quality. Previous
evaluation recommendations had been implemented effectively and the Board’s strategic stewardship of key matters
remained strong.

Key findings and the actions agreed to address are detailed below.

Key findings

Recommendations

Ongoing training and development to support the Board.

Succession planning and talent development to support the
Company’s longer-term prospects.

Meeting materials.

Continue to provide tailored ongoing training and awareness
including site visits and technical updates.

Continue to review the optimal composition and skillset of the
Board, whilst increasing focus on SLT succession and talent
development, including reviewing key criteria skillsets required for
senior leadership positions.

Continue to improve the balance between presentation and
discussion and ensure that Board and Committee materials are
succinct and clear.

78 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Nominations Committee report

To fulfil our purpose and deliver
our strategy it is essential that our
leadership team has the right balance
of skills, knowledge and experience.
Phuthuma Nhleko
Chair of the Nominations Committee

Allocation of Nominations
Committee time* (%)

Activity* %

Non-Executive

Director
succession planning

Senior management
succession planning

Leadership

effectiveness

Corporate

governance

19%

17%

61%

* Percentages are approximate.

Committee membership, meetings
and attendance
The table below sets out the number of meetings attended
out of the meetings members were eligible to attend.

Phuthuma Nhleko

Martin Greenslade

Sheila Khama1

Mike Daly2

Scheduled
Meeting
Attendance

Unscheduled
Meeting
Attendance

3/3

2/2

1/1

2/2

1. Joined the Committee on 24 May 2023.

Stepped down from the Board and the Committee on 24 May 2023.

The CEO and Director of People and Sustainability also
attend meetings of the Committee by invitation and
were present at most of, or part of, the meetings in 2023,
as appropriate.

Tullow Oil plc Annual Report and Accounts 2023 – 79

• Oversees the succession planning process for the

Director

Key responsibilities
• Reviews the structure, size and composition of the
Board, including the balance of skills, knowledge,
diversity and experience of the Board and its
Committees and makes recommendations to the
Board regarding any changes.

Board and senior management.

• Reviews the Board’s effectiveness including its

performance evaluation.

2023 key activities
• Oversaw the recruitment process and appointment of
Roald Goethe and Rebecca Wiles as new independent
Non-Executive Directors and increased female
representation on the Board to 33%.

• Refreshed the composition of the Board Committees.

2024 priorities
• Enhance Directors’ induction, training and

development programmes.

• Review the Executive Directors and senior management

succession pipeline and development initiatives.

Strategic report

Corporate governance

Financial statements

Supplementary information

Nominations Committee report continued

Dear shareholder
I am delighted to present the Nominations Committee (the
Committee) report for the year ended 31 December 2023.
The Committee continues to play a vital role in ensuring that
we have the right balance of skills experience, knowledge
and diversity across our leadership team. Ensuring orderly
succession planning and strong and effective leadership,
taking into account our approach to inclusion and diversity,
to support our strategy also continue to be key areas of focus.

Role and responsibilities
The Committee’s key responsibilities are set out on the
previous page and outlined in the Committee’s terms of
reference which are available at www.tullowoilcom/about-
us/corporate-governance/board-committees.

Committee membership, meetings
and attendance
The Committee’s members are listed on the previous page
together with information about the number of scheduled
meetings held during the year and each Director’s
meeting attendance.

In addition to its scheduled meetings the Committee held
two unscheduled meetings to consider specific items
including the appointments of new independent Non-
Executive Directors.

Non-Executive Director succession
During the year, having assessed the skills, diversity,
experience and tenure across the Board the Committee
commissioned a search for two new Non-Executive
Directors with significant knowledge of our sector and
experience of operating in Africa and emerging markets.
This process led to the Committee recommending to the
Board the appointment of Roald Goethe and Rebecca
Wiles, both of whom have extensive relevant experience
and knowledge (see page 71). The Board approved both
appointments and Roald and Rebecca joined the Board on
24 February 2023 and 28 June 2023 respectively.

Committee membership changes
During the year, and following the retirement of Mike Daly
after serving nine years on the Board, the Committee
reviewed the composition of each of the Board’s
Committee and following this review, the Committee
recommended to the Board the following changes:

• Audit Committee: The appointment of Roald Goethe

and Rebecca Wiles as members, with effect from 24 May
2023 and 1 January 2024 respectively.

• Safety and Sustainability: The appointment of Rebecca
Wiles as a member with effect from 1 January 2024.

• Nominations Committee: The appointment of Sheila
Khama as a member with effect from 24 May 2023.

• Remuneration Committee: The appointment of Roald
Goethe as a member with effect from 1 January 2024.

80 – Tullow Oil plc Annual Report and Accounts 2023

Following the changes to the Audit Committee as detailed
above Genevieve Sangudi stepped down as a member of
the Audit Committee, with effect from 1 January 2024.

The Board approved and welcomed these recommendations.

Inclusion and diversity
The Board is committed to ensuring that together
the Directors possess the requisite diversity of skills,
experience, knowledge and perspectives to support the
long-term success of the Company. The Board recognises
the role of diversity in promoting balanced and considered
decision making which aligns with the Group’s purpose,
values and strategy. All Board appointments are made on
an objective and shared understanding of merit, in line
with required competencies relevant to the Company as
identified by the Committee.

During the year, we made great progress on our
gender diversity representation on the Board, with the
appointment of Rebecca Wiles and increasing diversity
remains one of the key focuses of the Committee.

As at the date of this Annual Report, female representation
on the Board was 33% (2022: 22%). The Committee
acknowledges the FCA’s diversity target recommendation
that at least 40% of the Board should be female and one of
the Chair or SID and/or the CEO or CFO should be female.
In line with the Parker Review, we continue to have an
ethnically diverse Board, with 44% of the Board identifying
as being ethnic minority.

We are committed to building a Board and management
team that are diverse in all respects. We are mindful of
the recommendation of the 2023 Parker Review to set a
target for 2027 for ethnic diversity, and will be considering
the appropriate target that reflects the diversity of our
dynamic workforce and the areas we operate in.

The Committee also oversees the development of a
diverse pipeline for future succession to Board and senior
management appointments, including reviewing the
gender balance of senior management and its direct
reports. As at the date of this Annual Report, the SLT has
14% female representation, and among their direct reports,
female representation is 32% (excluding administrative staff).

Whilst the Committee remains committed to increasing
diversity, all appointments will be based on merit with
each candidate assessed against objective criteria, with
the prime objective to maintain and enhance the Board’s
overall effectiveness.

Strategic report

Corporate governance

Financial statements

Supplementary information

Board and leadership team diversity as at 31 December 2023
As required under Listing Rule 9.8.6R, the breakdown of the gender identity and ethnic background of the Board and
executive management2, as at 31 December 2023 is set out in the tables below. This information is based on self-reported
data from the Board and SLT. Between 31 December 2023 and 5 March 2024, being the date at which this report is
approved, there have been no changes in composition of the Board or SLT.

Gender identity

Men

Women

Not specified/prefer not to say

Ethnic background

White British or other white

Mixed/multiple ethnic groups

Asian/Asian British

Black/African/Caribbean/Black British

Other ethnic group, including Arab

Not specified/prefer not to say

Number
of Board
members

Percentage
of the Board

Number
of senior
positions on
the Board 1

Number
in executive
management 2

Percentage
of executive
management

N/A

67.7%

33.3%

N/A

85.7%

14.3%

N/A

Number
of Board
members

Percentage
of the Board

Number
of senior
positions on
the Board 1

Number
in executive
management 2

Percentage
of executive
management

N/A

55.6%

11.1%

33.3%

N/A

57.1%

14.3%

N/A

Includes CEO, CFO, Chair and Senior Independent Director.

Includes the Senior Leadership Team (which includes the CEO and CFO) and aligns with the FCA’s definition of executive management.

Recruitment process
The search processes for the two new Independent
Non-Executive Directors appointed during 2023 were
assisted by the search consultant Heidrick & Struggles
which, in late 2022, also assisted with an externally
facilitated evaluation of the performance of the Board,
its Committees and Directors (the 2022 evaluation). The
results and recommendations of the 2022 evaluation
(which can be found in our 2022 Annual Report and
Accounts on pages 69 and 70), together with other factors
(including stakeholder engagement) purposively informed
the scope of the searches and the skills and experience
that the Committee sought to add to the Board. Our
approach to diversity and inclusion was factored into
the search processes and a long list of candidates
was compiled taking into account the competencies
required as identified by the Committee. This long list
was considered by the Committee and a short list of
candidates were identified who then met with Chair,
CEO and SID. Following these meetings the Committee
recommended to the Board the appointment of Roald
and Rebecca.

External appointments
To ensure that Directors continue to have sufficient time to
commit to discharge their duties, any additional external
appointments undertaken require advance approval by the
Board. The Directors significant external appointments are
disclosed in their biographies on pages 70 and 71.

Review of Committee effectiveness
The Committee undertook a review of its effectiveness
in 2024, in respect of the year ended 31 December 2023,
with the results reported to the Board (see pages 77 and
78). I am pleased to confirm that the Committee was
considered to be operating effectively and in accordance
with the Code and the relevant guidance. The feedback
provided has been used to shape the Committee’s annual
rolling agenda for 2024.

Phuthuma Nhleko
Chair of the Nominations Committee
5 March 2024

Tullow Oil plc Annual Report and Accounts 2023 – 81

Strategic report

Corporate governance

Financial statements

Supplementary information

Audit Committee report

The Committee has continued to
review the effectiveness of the Group’s
control environment and strengthen
its risk management process.
Martin Greenslade
Chair of the Audit Committee

Allocation of Audit Committee time* (%)

10%

Activity* %

Financial reporting

Internal controls and

risk management

Special topics

External audit

Corporate

governance

12%

21%

* Percentages are approximate.

50%

Committee membership, meetings
and attendance
The table below sets out the number of meetings attended
out of the meetings members were eligible to attend.

Scheduled
Meeting
Attendance

4/4

2/2

4/4

2/2

Genevieve Sangudi2

Mike Daly3

1. Joined the Committee on 24 May 2023.

2. Retired from the Committee on 1 January 2024.

3. Retired from the Board and Committee on 24 May 2023.

The Committee meetings are routinely attended by
the CEO, CFO, the Group General Counsel, the Group
Financial Controller, the Head of Internal Audit and Risk
and representatives of the external auditor, and members
of Company Secretariat. The Committee also invites
other senior finance and business heads to attend certain
meetings to gain a deeper level of insight on particular
items. The Committee also met without management
present and met privately with the external audit partner
and the Head of Internal Audit and Risk.

Key responsibilities
• Oversees financial reporting and disclosures including
monitoring the integrity of the financial statements and
reviewing and challenging the appropriateness and
consistency of significant accounting policies.

• Monitors and assesses the adequacy and effectiveness

of risk management systems and internal controls.

• Oversees the relationship with the external auditor and

Director

the effectiveness of the audit process.

Martin Greenslade

• Oversees the work programme of internal audit and the

Roald Goethe1

system of ethics and compliance.

2023 key activities
• Reviewed the significant accounting judgements made

during the year.

• Monitored the developments arising from the internal

audit programme.

2024 priorities
• Monitor developments and review processes and

procedures to prepare for upcoming changes in relation
to Audit and Corporate Governance reforms.

• Enhance and further embed our Enterprise Risk

Management framework.

82 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Dear shareholder

Overview
As the Chair of the Audit Committee, I am pleased to present
the Committee’s report for the year ended 31 December
2023. The purpose of this report is to describe how the
Committee has discharged its responsibilities during the
year. Our core objectives include ensuring the integrity of
the Group’s financial reporting process, the effectiveness
of the external audit and ensuring that the Company has an
effective control environment to manage risks.

Role and responsibilities
The Committee’s key responsibilities are set out on the
previous page and outlined in the Committee’s terms of
reference which are available at www.tullowoil.com/about-
us/corporate-governance/board-committees.

Committee membership, meetings
and attendance
In line with the provisions of the Code, all Committee
members are independent Non-Executive Directors. I have
relevant and recent financial experience as the current
Group Chief Financial Officer at Red Sea Global and having
served as Chief Financial Officer at Land Securities Group
plc, a listed UK real estate company between 2005 and
2021. Previously, I spent five years as Group Finance Director
of Alvis plc, an international defence and engineering
company. I am a Fellow of the Institute of Chartered

Accountants in England and Wales. The Board remains
satisfied that I possess recent and relevance financial
experience appropriate to Chair the Committee.

During the year, the membership of the Committee was
changed, and I am pleased to formally welcome Roald
Goethe (appointed 24 May 2023) and Rebecca Wiles
(appointed 1 January 2024) as members of the Committee.
They are both already making good contributions to the
Committee’s discussions, and I look forward to working
with them in the future. Further biographical information in
relation to Roald and Rebecca is set out on page 71.

Genevieve Sangudi stepped down from the Committee
with effect from 1 January 2024. On behalf of the
Committee, I would like to thank Genevieve for her valuable
input to the Committee over the last few years. In May
2023, Mike Daly also stepped down from the Board and
the Committee and I would also like to thank Mike for his
significant contribution to the Committee during his tenure.

In addition to the Committee’s scheduled meetings
during the year the Committee held conference calls
between meetings to consider specific items. Meetings
are scheduled to allow sufficient time for full discussion of
key topics and to enable early identification and resolution
of risks and issues. Meetings are aligned with the Group’s
financial reporting calendar. The Committee sets an
annual work plan, developed from its Terms of Reference,
with standing items that the Committee considers at each
meeting, in addition to areas of risk identified for detailed
review and any matters that arise during the year.

Significant issues and financial judgements
The significant issues and primary areas of financial judgement considered by the Committee in relation to the 2023
accounts and how these were addressed are detailed below. The related Group accounting policies can be found on
pages 134 to 144.

Significant financial
judgements and areas of
estimation

Carrying value of
intangible exploration
and evaluation assets

How the Committee addressed these judgements and areas of estimation

A detailed accounting paper was received by the Committee from management on
the Group’s exploration and evaluation assets, with a separate paper for Kenya, given
its materiality. The papers documented management’s assessment of indicators for
impairment and, if required, showed calculations for the impairments. The Committee
reviewed these papers and challenged management’s position, with particular focus
on the Kenya development project given key changes to the project in 2023, at the
February 2024 Audit Committee meeting.

The Committee supported management’s assessment that an impairment was
required in respect of Kenya based on the judgemental assessment performed and
ensured there was an appropriate disclosure of this judgement in the Annual Report
and Accounts.

Tullow Oil plc Annual Report and Accounts 2023 – 83

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Corporate governance

Financial statements

Supplementary information

Audit Committee report continued

Significant issues and financial judgements continued

Significant financial
judgements and areas of
estimation

Carrying value of
property, plant and
equipment (PP&E)

Going concern and
viability

Gabon asset swap

TEN FPSO Lease
accounting

Uncertain tax and
regulatory treatments

How the Committee addressed these judgements and areas of estimation

The Committee received and reviewed the papers prepared by management on the
Group’s oil price and discount rate assumptions, which are used in the assessment
of the carrying value of PP&E. At the September, November and February Audit
Committee meetings these assumptions were challenged by the Committee
compared to independent oil price forecasts. The Committee also challenged the
Company’s calculation of discount rates, with particular focus on the asset and
exploration risk adjustments made by management to a peer group weighted average
cost of capital.

At the September and February Audit Committee meetings the Audit Committee
reviewed and challenged detailed papers on management’s assessment of impairment
triggers and resulting impairment tests for PP&E. The Committee gave particular
focus to TEN, given the materiality of historical impairments made to that asset. The
Committee also discussed the Group’s reserves and resources with the Group’s
principal external reserves auditor, TRACS, at the February Committee meeting to
gain comfort over management’s view of the carrying value of PP&E. The Committee
concurred with the impairments proposed by management and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.

A detailed accounting paper and cash flow analysis was prepared by management
and provided to the Committee, which then reviewed and challenged the assumptions
and judgements in the underlying going concern and viability statement forecast
cash flows. The Committee discussed with management the risks, sensitivities and
mitigations identified by management to ensure the Company can continue as a
going concern. The Committee also discussed the five-year time horizon used by
management for the viability statement, which aligns with the revised debt maturities
following the refinancing in 2023.

The Committee concurred with management’s assessment and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.

A detailed accounting paper was prepared by management and reviewed by the
Committee documenting the background and accounting treatment of the Gabon
asset swap agreement and its impact on Group results. The disposal group met the
criteria for classification as held for sale under IFRS 5 and the carrying amounts have
been presented as such on the balance sheet. On completion, any positive difference
between the fair value of the acquired assets and the carrying value of the disposal
group will be recognised as a gain in the income statement.

A detailed accounting paper was prepared by management documenting the
accounting treatment of the lease extension on the TEN FPSO following a decision
to not exercise the purchase option. The extended term has been treated as a lease
remeasurement in line with the requirements of IFRS 16, and the discount rate and
lease term have been updated to reflect the new expected end date. The adjustments
were made to the right-of-use asset and liability on the balance sheet.

The Committee concurred with management’s assessment and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.

Detailed accounting papers on all tax and regulatory exposures were prepared
by management for the Committee’s review. Where relevant, the papers included
summaries of external legal or tax advice on particular tax claims and assessments
received. The Committee also met with the Head of Tax in the February meeting to
discuss and challenge the key judgements and estimates made including the likelihood
of success and the quantum of the total exposure for which provision had been made.
The Committee concurred with management’s assessment and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.

84 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

External auditor
The Committee has primary responsibility for managing the
relationship with the external auditor, including assessing
its performance, effectiveness and independence,
recommending to the Board its re-appointment or removal,
and agreeing terms of engagement.

Based on the competitive tender process conducted
in 2018, the Committee recommended to the Board
the appointment of Ernst & Young LLP (EY) as Tullow’s
statutory auditor for the 2020 financial year, which was
approved by shareholders at the 2021 AGM. Under current
regulations, the Group will be required to retender the
audit by no later than the 2029 financial year.

The external auditor is required to rotate the audit partner
responsible for the Group audit every five years. Mr Paul
Wallek is EY’s lead audit partner with effect from 2020.
During the year the Committee held private meetings with
the external auditor, and I also maintained regular contact
with the audit partner throughout the year. These meetings
provide an opportunity for open dialogue with the external
auditor without management being present, and help
ensure that the external auditor is able to operate effectively
and challenge management sufficiently when required.

Effectiveness of external audit process
The Audit Committee is responsible for assessing the
qualifications, expertise and resources, and independence
of EY, as well as the effectiveness of the audit process. The
Committee’s assessment of the 2023 audit process covered
all aspects of the audit service provided by EY, including:

• Obtaining a report on the auditor’s own internal quality
control procedures and consideration of the auditor’s
annual transparency reports in line with the Code.

• Approving the auditor’s terms of engagement

and remuneration.

• Reviewing and approving the audit plan prepared by
the auditor at the start of the audit cycle. This plan
identifies key audit risks which included oil and gas
reserve estimations; recoverability of Kenya exploration
and evaluation assets; recoverability of property plant
and equipment; going concern; revenue recognition;
uncertain tax treatments and accounting for the Gabon
asset swap.

• Discussing and challenging a number of matters
including the auditor’s assessment of the Group’s
significant financial risks and the performance of
management in addressing these risks, the auditor’s
opinion of management’s role in fulfilling obligations
for the maintenance of internal controls and the
transparency and responsiveness of interactions
with management.

• Confirming the independence of the audit including
how the auditor has exercised professional challenge.

• Assessing the effectiveness and performance of the
external auditor and the audit process based on the
Committee’s interactions with the external auditor and
management’s survey.

As a result of the Committee’s assessment, the Committee
concluded that the external audit process had operated
effectively. EY and management have agreed on step
plans to ensure the quality of audit, team continuity and
focus on continuous improvement is maintained.

Non-audit services and independence
The Committee closely monitors the level of audit and
non-audit services provided by the auditor to the Group.
Non-audit services are normally limited to assignments
that are closely related to the annual audit or where the
work is of such a nature that a detailed understanding
of the Group is necessary. An internal Tullow standard
for the engagement of the auditor to supply non-audit
services is in place to formalise these arrangements.
It was revised in January 2022 and is reviewed regularly.
It requires Committee approval for all non-trivial categories
of non-audit work. In 2023 total fees for audit-related work
amounted to $2.5 million and total fees for non-audit-
related work amounted to $0.5 million. See note 4 to the
financial statements for further information.

In addition to processes put in place to ensure segregation
of audit and non-audit roles, EY is required, as part of the
assurance process in relation to the audit, to confirm to the
Committee that it has both the appropriate independence
and the objectivity to allow it to continue to serve the
Company’s shareholders. This confirmation is received
every six months, and no matters of concern were
identified by the Committee.

Internal controls and risk management
The Board has overall responsibility for risk management
and internal control systems, and for reviewing their
effectiveness. This process is overseen by the Committee
on the Board’s behalf.

In 2023, the Committee reviewed, discussed and briefed
the Board on risks, controls and assurance, including the
annual assessment of the system of risk management
and internal control, to monitor the effectiveness of the
procedures for internal control over financial reporting,
compliance and operational matters.

The Directors obtained comfort over the effectiveness of
the Group’s risk management and internal control systems
through various assurance activities that included:

• Audits undertaken by the Internal Audit team.

• Enterprise risk management and assurance processes.

• The external auditor’s observations on internal financial

controls identified as part of its audit.

• Regular performance, risk and assurance reporting by
the Business Unit and Corporate teams to the Board.

Tullow Oil plc Annual Report and Accounts 2023 – 85

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Corporate governance

Financial statements

Supplementary information

Audit Committee report continued

Internal controls and risk management
continued
During the year, in conjunction with the Board, the
Committee completed two robust assessments of the
significant risks facing the Company, including those that
would threaten its business model, future performance,
solvency or liquidity. This assessment included the
identification and discussion of principal and emerging
risks. The assessment process included engagements with
the SLT helping to support understanding, ownership and
accountability of enterprise-wide risks across all layers of
the Company. For each of the principal risk categories, the
Board reviewed the risk strategies to ensure they were still
valid, and their associated risk appetites.

Internal Audit periodically presented its findings to the
Committee over delivery of the assurance plan, progress
of issues raised and their timely resolution. On occasions,
senior management representatives from the business
were also invited to attend the Committee to provide
updates on key matters such as the annual tax strategy
review and TCFD reporting.

In addition, during the year, the Committee received reports
from the principal independent reserves auditor TRACS and
reviewed the arrangements in place for managing cyber risk
relating to the Group’s critical information systems.

All identified findings were assessed, with no indications of
fraud noted.

Based on the results of the annual effectiveness review
of risk management and internal control systems, the
Directors concluded that the system of internal controls
operated effectively throughout the financial year and
up to the date on which the financial statements were
signed. There were areas identified for improvement and
the Directors are confident that they are in the process of
being addressed.

Internal audit requirements
The Committee’s role is to consider how the Group’s
internal audit requirements are satisfied and make relevant
recommendations to the Board. Throughout 2023
the Committee requested and received reports from
management on its resource and budget planning for the
Internal Audit function in order to assess the effectiveness
of internal audit and satisfy itself that the quality, experience
and expertise of the function is appropriate for the business.
The level of internal resource available to the function was
in line with target from throughout the year. In addition, the
internal audit function uses external expertise for specialist
reviews and so the Committee challenged management to
ensure sufficient budget was made available for additional
external resource where required.

During the year:

• The Committee reviewed and challenged the 2023

programme of internal audit work developed to address
both financial and overall risk management objectives
identified within the Group during the planning phase. The
plan was subsequently adopted with progress reported
at the Committee’s meetings and feedback provided. A

86 – Tullow Oil plc Annual Report and Accounts 2023

total of 19 internal audits were planned for 2023 of which
15 were completed with two in progress at the year end,
one review was postponed into 2024 and two reviews
were consolidated into one. The primary changes in the
plan were due to re-assessments of the Group’s priorities
and the results of completed audits. Based on the nature
of the audits completed, the assurance performed by
management, the Committee’s subsequent assessment
and the scale of the business, the Committee believes an
appropriate level of assurance has been performed over
the Group’s internal control environment.

• Internal Audit also ran a systematic programme of audits
of suppliers’ compliance with contractual terms, with a
focus on significant and high-risk contracts.

• Detailed results from the internal audits were reported to
management and in summary to the Committee during
the year. Where required, the Committee receives full
reports and details on any key findings and receives
regular reports on the status of the implementation of
Internal Audit recommendations.

• The Committee assessed the effectiveness of Internal
Audit through meeting with the Head of Internal Audit,
its review and assessment of the Internal Audit Plan and
the results of audits reported.

Whistleblowing procedure
In line with best practice and to ensure we operate
to the highest ethical standards, an independent
whistleblowing procedure was established in 2011 and
operated throughout 2023. The procedure allows staff to
confidentially raise any concerns about business practices
and complements our internal reporting processes. The
Committee considers the whistleblowing procedures to be
appropriate for the size and scale of the Group.

The whistleblowing policy is included in the Code of
Ethical Conduct which is available to all staff in printed
form and on our intranet. Each member of staff is annually
required to complete an online awareness course to refresh
their knowledge of key provisions of the Code of Ethical
Conduct, which was included as a Group-wide KPI.

The Committee receives from the Group Ethics and
Compliance Manager summaries of investigations of
significant known or suspected misconduct by third
parties and employees including ongoing monitoring
and following up of internal investigations.

Review of Committee effectiveness
The Committee undertook a review of its effectiveness in
2024, in respect of the year ended 31 December 2023, with
the results reported to the Board (see pages 77 and 78). I am
pleased to confirm that the Committee was considered to be
operating effectively and in accordance with the Code and
the relevant guidance. The feedback provided has been used
to shape the Committee’s annual rolling agenda for 2024.

Martin Greenslade
Chair of the Audit Committee
5 March 2024

Corporate governance

Strategic report

Corporate governance

Financial statements

Supplementary information

Safety and Sustainability Committee report

The Committee continued to monitor
the Group’s safety and environmental
performance and its progress in
embedding sustainability across
the business.
Mitchell Ingram
Chair of the Safety and Sustainability Committee

Key responsibilities
• Oversees implementation of the Company’s strategic

sustainability priorities.

• Monitors the implementation of the Company’s

environmental, health, security and asset protection,
and safety policies and reviews key learnings from
safety incidents.

• Reviews the Company’s approach to delivering Shared

Prosperity, including local content, social investment and
social performance.

• Reviews the pathways to decarbonise the Company’s

operations, and the associated costs and risks, and approves
the timeframe in which Tullow intends to achieve Net Zero.

Allocation of Safety and Sustainability
Committee time* (%)

10%

Activity* %

Safety performance, safety

risk management and
incident reviews

Sustainability performance

and KPI reviews

Shared Prosperity

programmes including
local content

Climate change

mitigation and Net Zero
progress and plans

10%

15%

Asset health and integrity

Other topics including human

resources, human rights

15%

* Percentages are approximate.

25%

20%

Committee membership, meetings
and attendance
The table below sets out the number of scheduled
meetings attended out of the meetings members were
eligible to attend.

2023 key activities
• Monitored progress in relation to Net Zero Scope 1 and 2

emissions by 2030 commitment.

• Reviewed human rights salient issues, roadmap and

action plans.

Director

Mitchell Ingram

Genevieve Sangudi

Sheila Khama

Mike Daly1

Attendance

4/4

2/2

• Reviewed performance against sustainability KPIs and

1. Stepped down from the Board and the Committee on 24 May 2023.

provided feedback.

• Promoted occupational health and safety, process safety

and asset integrity across Ghana operations.

2024 priorities
• Continue to improve safety, operational and

environmental performance.

• Ensure sustainability strategy delivers sustainable

value creation.

• Continue to monitor the Net Zero delivery plan and the
progress of the nature-based offset solution in Ghana.

The Director of People and Sustainability and the Managing
Director, Ghana, who report to the Committee, are invited
to attend each meeting of the Committee and participated
in all of the meetings during 2023. The Climate Change
Manager, Group Shared Prosperity Manager, Group
Sustainability Manager and the Group EHS Manager also
attend meetings of the Committee by invitation and were
present at most of the meetings during the year. The
Committee is supported by the Company Secretary.

Tullow Oil plc Annual Report and Accounts 2023 – 87

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Corporate governance

Financial statements

Supplementary information

Safety and Sustainability Committee report continued

Dear shareholder

Overview
The Safety and Sustainability Committee oversees
our sustainability strategy and performance in relation
to its four pillars: Safe Operations, Shared Prosperity,
Environmental Stewardship and Equality and Transparency.
2023 was another active year for the Committee during
which several strategic programmes were advanced
across all four sustainability pillars.

Role and responsibilities
The Committee’s key responsibilities are set out on the
previous page and outlined in the Committee’s terms of
reference which are available at www.tullowoil.com/aboutus/
corporate-governance/board-committees.

Committee membership, meetings
and attendance
The Committee’s members are listed on the previous
page together with information about the number of
scheduled meetings held during the year and each
Director’s meeting attendance.

Committee activities
To ensure that sustainability is embedded across all
business activities and decision making, at each meeting the
Committee reviews the sustainability KPI which forms part of
the Group’s scorecard (see pages 20 and 21). As needed, the
Committee also conducts in-depth reviews of strategically
important areas of concern for the Group.

In 2023, the Committee engaged across several topics
which are core to our sustainability performance and
progress. Personal and process safety continued to be an
important discussion at every meeting and the Committee
reviewed all notable safety events including significant
safety events and high-potential near misses. This included
a lost-time injury on the Jubilee FPSO in which an offshore
worker required offsite medical treatment. The Committee
reviewed the thorough investigation of the incident
which took place and corrective actions to prevent similar
incidents. Similarly, the Committee reviewed ongoing
investment in life cycle integrity and maintenance of
operated assets and new safety campaigns such as
‘Learning from Normal Work’ and enhanced safety
hazard risk management practices. The Committee also
examined safety risk mitigation at non-operated assets.

Advancing plans to deliver our Net Zero Scope 1 and 2
emissions by 2030 commitment, and the interim goal
of eliminating routine flaring by 2025, were a regular
feature of the Committee’s agenda in 2023, and included
updates on the implementation of modifications at Jubilee
and TEN fields to enable elimination of routine flaring.
Additionally, the Committee played an instrumental role in
considerations leading to the agreement to partner with
the Ghana Forestry Commission in a project which will
offset more than 600,000 tonnes of carbon emissions per
year, representing 100% of Tullow’s residual hard to abate
emissions. The Committee is supportive of the agreed
hands-on approach, which involves upfront investment,
aligning on carbon standards, engagement with
communities in the project regions in Ghana to improve
livelihoods and deliver environmental benefits.

During the year, in relation to our human rights policy, the
Committee considered the salient issues most relevant
to our business activities. Following this review the
Committee oversaw the development of a new human
rights roadmap and the development of plans to further
strengthen the protection of human rights across the
Group (see page 37).

The Committee continued to monitor delivery of our
Shared Prosperity strategy including ongoing educational
initiatives in host countries, accelerated through
partnerships with experienced local organisations.
The outcomes of these activities in terms of improved
enrolment in education, higher school grades and
stronger interest in STEM higher education represent an
important contribution to delivering Shared Prosperity
in the communities where we operate. Similarly, the
Committee reviewed local content performance, including
the positive development of collaboration with the Ghana
Petroleum Commission to broaden and deepen the nature
of knowledge and the extensive engagement and support
provided to local suppliers and entrepreneurs.

The Committee evaluated and agreed the Group’s
sustainability disclosures including the annual
Sustainability Report and its TCFD statement (see pages
38 to 47).

Mitchell Ingram
Chair of the Safety and Sustainability Committee
5 March 2024

88 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Remuneration report

The Remuneration Committee seeks
to align reward with the Company’s
strategy, culture and delivery of long-
term shareholder value.
Genevieve Sangudi
Chair of the Remuneration Committee

Allocation of Remuneration
Committee time* (%)

Activity* %

Executive and

senior management
remuneration

Wider workforce pay

and conditions

28%

Remuneration policy

Remuneration
reporting and
corporate
governance

Scorecard

performance review

* Percentages are approximate.

11%

23%

17%

20%

Committee membership, meetings
and attendance
The table below sets out the number of meetings attended
out of the meetings members were eligible to attend.

Director

Genevieve Sangudi

Mitchell Ingram1

Martin Greenslade

Scheduled
Meeting
Attendance

5/5

4/5

5/5

1. Mitchell Ingram was unable to attend the meeting due to

personal reasons.

The CEO and other members of the SLT may be invited
to attend Committee meetings to provide business
context and performance updates. However, no member
of the SLT is present when their own remuneration is
determined. The Company Secretary acts as Secretary to
the Committee.

Tullow Oil plc Annual Report and Accounts 2023 – 89

Key responsibilities
• Ensures Executive Directors and the SLT are rewarded

for promoting the long-term sustainable success of the
Company and delivering on its strategy.

• Reviews the remuneration arrangements for the

wider workforce.

2023 key activities
• Setting an appropriately stretching set of key
performance metrics for the 2023 and 2024
KPI scorecards.

• Monitoring progress against the 2023 KPI scorecard.

• Undertaking a review of the Directors’ Remuneration

Policy (the Policy), including consideration of alternative
incentive structures, performance measures, and other
Policy elements.

• Reviewing the remuneration arrangements, including

benchmarking of Total Remuneration for the SLT
and reviewing the implementation of the revised pay
philosophy and principles for the wider workforce.

2024 priorities
• Monitor progress against the 2024 KPI scorecard.

• Cascade principles of 2023 Directors’ Remuneration

Policy below Board/SLT level.

• Review alignment of remuneration arrangements across

the workforce to ensure fair and consistent reward
based on performance.

Strategic report

Corporate governance

Financial statements

Supplementary information

Remuneration report continued

Annual statement on remuneration

We are pleased with the operational and financial progress
made during the year to position Tullow for growth.

Dear shareholder
On behalf of the Board, I am presenting the Remuneration
Committee’s report for 2023 on Directors’ remuneration.
The report is divided into three main sections:

• This Annual Statement, which contains a summary of

performance and pay for 2023, the Committee’s activities
during the year, and the proposed implementation of the
Directors’ Remuneration Policy for 2024.

• The 2023 Annual Report on Remuneration, which

provides details of the remuneration earned by Directors
in the year ended 31 December 2023 and how the Policy
will be operated in 2024.

• The Directors’ Remuneration Policy Report, which was

formally approved by the shareholders at the 2023 AGM
and sets out the forward-looking three-year Directors’
Remuneration Policy for the Company.

New Directors’ Remuneration Policy
approved at the 2023 AGM
As disclosed last year the Committee undertook a
comprehensive review of the Directors’ Remuneration Policy
in 2022 and early 2023, which included consultation with
many of our major shareholders. Following this process it was
pleasing to see the strong support for the Policy at our 2023
AGM, with the Policy report receiving a 98.6% vote in favour.

The feedback received from shareholders during this
consultation helped inform the Committee’s decisions
on the final terms of the Policy, and has continued to
form part of the Committee’s discussions during the
year. I would like to thank those who took part in the
consultation exercise for their time and input.

2023 performance context
During the year, we made material financial and operational
progress. A key event in the year was the start-up of the
Jubilee South East (JSE) project which delivered material
production growth from the field and in turn, marked a step-
change in our cash flow generation. We also refined our non-
operated portfolio through a swap agreement and licence
extensions in Gabon. $170 million of free cash flow was
generated during the year, which was ahead of expectations,
and we secured a $400 million debt facility agreement with
Glencore, which demonstrates our ability to access long-
term capital. We further strengthened our balance sheet
though continued deleveraging and proactive buy-backs of
our bonds. We remain on track to deliver our target of c.$800
million free cash flow over the 2023 to 2025 period and
create an optimal capital structure.

2023 full-year production was 62.7 kboepd, marginally
below expectations due to water injection challenges and
a short-term delay to the start up of the JSE project. This
production generated revenue of $1,634 million (2022:
$1,783 million); gross profit of $765 million ($1,086 million)
and a loss after tax of $110 million (2022: profit after tax
of $49 million). This loss was driven by impairments and
write-offs totalling $435 million.

90 – Tullow Oil plc Annual Report and Accounts 2023

Summary of Executive Director
remuneration for 2023
As set out in the Policy, 2023 was a transitionary year as
we move from the Tullow Incentive Plan (TIP) to separate
annual bonus and LTIP awards. Rahul Dhir’s 2023 variable
pay was therefore earned under the TIP, whereas Richard
Miller, due to his appointment as CFO in January 2023, was
eligible for an annual bonus.

Following the end of the year the Committee reviewed
the performance achieved against the KPI scorecard used
for annual bonus awards. For TIP awards the scorecard
also included a 50% element based on relative TSR. The
details of the scorecard and the performance achieved
can be found on pages 93 to 96. It was noted that there
had been resilient performance across a number of our
KPIs including safety, financials, production, business plan
implementation, sustainability, unlocking value, leadership
effectiveness and capital structure.

Based on this assessment the Committee awarded
Rahul Dhir a TIP award of 106% of salary (i.e. 26.5% of the
maximum 400% of salary potential), which takes into
account the progress against annual KPIs and the three-
year TSR measurement period, which commenced 1 January
2021 and ended 31 December 2023. In line with the Policy,
50% of the TIP award is paid in cash, with the remaining 50%
deferred into shares which vest after five years.

Based on performance against the annual KPIs, the
Committee felt it appropriate to award an annual bonus to
Richard Miller of 79.5% of salary (i.e. 53% of the maximum
150% of salary opportunity). In line with the Policy, one- third
of the bonus earned will be deferred into shares for a
period of three years.

The Committee considers these outcomes to be appropriate
in the context of the performance achieved over the relevant
period and has not applied discretion to the outcome.

As disclosed last year, in June 2023 we granted the first LTIP
awards under the Policy to Rahul Dhir and Richard Miller, which
are subject to performance over the three years from 1 January
2023. To determine the number of underlying shares for each
LTIP award, the Committee decided to apply the same share
price as used to determine the March 2023 TIP share awards in
relation to the 2022 performance year, which was 17% higher
than the share price on the day the LTIP awards were made.
Details of these awards can be found on page 100.

Summary of Executive Director
remuneration for 2024
In early 2024 the Committee reviewed the salary levels for
the Executive Directors, taking into account the average
pay increase awarded to UK-based employees of 3.5%.
The base salary for Rahul Dhir, our CEO, will be increased
by 2.8%, below the typical increase awarded to UK based
employees for 2024. Richard Miller, our CFO, was appointed
on 1 January 2023 and his salary on appointment was set
at a level that considered that this was his first FTSE CFO
role. During 2023 his performance has been strong, he

Strategic report

Corporate governance

Financial statements

Supplementary information

has gained significant experience and he has continued to
develop in the role. Therefore, the Committee determined
that it was fair and appropriate to increase his base salary
by 9.3%. Following this increase the CFO’s base salary will
remain below that of his predecessor. Base salary increases
will apply with effect from 1 April 2024.

As set out in the approved Policy, 2024 will be the final
transition year for Rahul Dhir, with performance for the 2022
to 2024 period continuing to be rewarded through the TIP.
This will be based 50% on relative TSR over three years, and
50% on the annual KPI scorecard performance in 2024.

We have finalised our annual KPI scorecard for 2024 with a
focus on safety, financial performance, production, business
plan implementation, embedding sustainability, unlocking
value and leadership effectiveness. We believe all targets to
be suitably challenging.

LTIP awards will be made to Rahul Dhir and Richard Miller in
2024, and will continue to be based on 50% of relative TSR and
50% of absolute TSR performance assessed over the three
years from 1 January 2024. Details can be found on pages 101
and 102.

Remuneration arrangements for the
wider workforce
During 2023 the Committee continued to consider the
alignment of remuneration arrangements through the
workforce, ensuring all employees are rewarded fairly
and consistently for their contribution to the overall
Company performance. In doing so, the Committee took
into account the presentations made to the Board on the
Company’s initiatives regarding culture and the Employee
Value Proposition.

Executive remuneration at a glance
Assessment of TIP Awards

Employee engagement
During the year, members of the Committee met with the
workforce Tullow Advisory Panel (TAP), a staff panel, which
collectively represents Tullow’s global workforce. These
meetings provided an opportunity to gather feedback
from employees to help shape decisions with regards to
the ongoing development of Tullow’s Employee Value
Proposition. On behalf of the Committee I would like to
thank TAP members and other employees for their input to
the Board’s discussions.

Review of Committee effectiveness
The Committee undertook a review of its effectiveness in
2024, in respect of the year ended 31 December 2023, with
the results reported to the Board (see pages 77 and 78). I am
pleased to confirm that the Committee was considered to be
operating effectively and in accordance with the Code and
relevant guidance. The feedback provided has been used to
shape the Committee’s annual rolling agenda for 2024.

Looking ahead
On behalf of the Committee, I would like to again thank
shareholders for their vote approving the Directors’
Remuneration Policy and the Directors’ Remuneration
report at the last AGM and look forward to your continued
support over the coming year. If you have any comments
or questions on any element of the report, please contact
me via our Company Secretary, Adam Holland, at
companysecretary@tullowoil.com.

Genevieve Sangudi
Chair of the Remuneration Committee
5 March 2024

Target
%

7.5%

10%

7.5%

10%

50%

Achieved
%

2.2%

2.7%

3.8%

4.9%

4.2%

3.8%

0.0%

Target
100%

Achieved
26.5%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Assessment of Annual Bonus Awards

Target
%

Achieved
%

15%

10%

20%

15%

10%

20%

10%

7.5%

10%

4.4%

9.9%

8.4%

5.3%

7.5%

Target
100%

Achieved
53%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Safety

Financial Performance

Production

Business Plan Implementation

Sustainability

Unlocking Value

Leadership Effectiveness

Total Shareholder Return

Tullow Oil plc Annual Report and Accounts 2023 – 91

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Financial statements

Supplementary information

Remuneration report continued

Annual Report on Remuneration

Directors’ remuneration (audited)
The remuneration of the Directors for the year ended 31 December 2023 payable by Group companies in respect of
qualifying services and comparative figures for 2022 and 2023 are shown in the table below:

Fixed pay

Tullow Incentive Plan Annual Bonus Plan

Salary
fees 1
£

Pensions 2
£

Taxable
benefits 3
£

TIP cash
£

Deferred
TIP shares 4
£

Cash
Bonus
£

Deferred
shares 4
£

Total
£

Total
fixed
pay
£

Total
variable
pay
£

Executive Directors

Rahul Dhir

2023 613,150

91,972

28,284 327,752

327,752

2022 593,050

88,958

20,513

358,440

–

– 1,388,910

733,406 655,504

– 1,419,400

702,520 716,880

Richard Miller 2023 366,000 36,600

11,002

2022

–

– 193,980 96,990 704,572

413,602 290,970

–

2023 979,150 128,572

39,286 327,752

327,752 193,980 96,990 2,093,482 1,147,008 946,474

Subtotal
2023

Subtotal 2022
(includes
former
Executive
Directors)

Non-Executive
Directors

Mike Daly5

2023

27,083

Genevieve
Sangudi6

2022

65,000

2023 80,000

2022

73,981

Sheila Khama 2023 65,000

Martin
Greenslade

2022

65,000

2023 100,000

2022

87,962

Roald Goethe7 2023

54,667

2022

–

2023

33,750

2022

–

2023 80,000

2022

80,000

Rebecca
Wiles8

Mitchell
Ingram

Phuthuma
Nhleko

Subtotal
2023

Subtotal 2022
(includes
former
Directors)

Total

Total
(includes
former
Directors)

2022

708,430

117,801

52,642

496,889

358,440

–

3,706

256

7,417

10,242

8,414

9,311

3,190

279

3,358

–

3,267

–

2,902

4,210

–

1,734,195

878,867 855,329

–

30,789

65,256

30,789

65,256

87,417

84,223

73,414

74,311

87,417

84,223

73,414

74,311

103,190

88,241

58,025

–

37,017

–

82,902

84,210

– 345,260

345,260

–

331,064

818,014

n/a

–

805,023

n/a

–

2023 300,000

– 45,260

2022 300,000

2023 740,500

–

31,064

77,514

2022

749,661

–

55,362

2023 1,719,650 128,572 116,800 327,752

327,752 193,980 96,990 2,911,496 1,965,022 946,474

2022 1,458,090

117,801

108,004

496,889

358,440

–

– 2,539,218

1,683,889 885,329

1. Base salaries of the Executive Directors have been rounded up to the nearest £10 for payment purposes, in line with established policy.

2. None of the Executive Directors have a prospective entitlement to a defined benefit pension by reference to qualifying services. Pension benefits

for Executive Directors are workforce aligned. Rahul Dhir receives cash in lieu of pension contribution. Richard Miller receives a partial employee
contribution towards the regular company pension plan with the balance paid as cash in lieu.

92 – Tullow Oil plc Annual Report and Accounts 2023

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Financial statements

Supplementary information

3. Taxable benefits comprise private medical insurance for all Executive Directors and any other taxable expenses. Travel and subsistence benefits provided
to Executive Directors and Non-Executive Directors have also been included on a grossed-up basis as Tullow meets the UK tax liability on their behalf.

4. These figures represent that part of the TIP and Annual Bonus Awards required to be deferred into shares.

5. Mike Daly retired from the Board on 24 May 2023.

6. Genevieve Sangudi was appointed Chair of the Remuneration Committee following the AGM on 25 May 2022.

7. Roald Goethe was appointed Non-Executive Director effective 24 February 2023.

8. Rebecca Wiles was appointed Non-Executive Director effective 28 June 2023.

Material contracts
There have been no contracts or arrangements during the financial year in which a Director of the Company was
materially interested and/or which were significant in relation to the Group’s business.

Payments to past Directors
No payments were made to past Directors in 2023.

Payments for loss of office
No payments for loss of office were made to past Directors in 2023.

Determination of 2024 TIP and Annual Bonus Awards based on performance to 31 December 2023 (audited)
We measure performance using a corporate scorecard that includes a number of financial and non-financial key
performance indicators (KPIs). The corporate scorecard is central to Tullow’s approach to performance management and
the 2023 metrics were agreed with the Board and focus on targets that were deemed important for the year. Each KPI
measured has a percentage weighting and financial indicators have trigger, base, and stretch performance targets.

For the Executive Directors participating in TIP, an additional TSR metric was included, which represents a weighting of
50% of the total corporate scorecard.

Progress against the corporate scorecard is tracked during the year to assess performance against strategy. Following
the end of the 2023 financial year, the corporate scorecard performance was assessed as 53% of the maximum for
Annual Bonus Award and the workforce and 26.5% for the Executive Directors participating in TIP taking into account
the additional TSR metric. The Committee is satisfied with the outcome based on the broader view of performance and
stakeholder experience.

Tullow Oil plc Annual Report and Accounts 2023 – 93

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Corporate governance

Financial statements

Supplementary information

Remuneration report continued

Annual Report on Remuneration continued

Details of variable pay earned in the year
Details of the performance targets and performance against those targets are as follows:

Performance
metric

Safety
Measure of Total
Recordable
Incident Rate
(TRIR) and
Loss of Primary
Containment
(LOPC) Tier 1 & 2
as per IOGP

Performance

% of TIP
award
(% of salary
maximum)

Actual
TIP award
Rahul Dhir

% of
annual
bonus
award
(% of
salary
maximum)

Health and safety of our staff and everyone who is associated with
our operations.

7.5%
(30%)

3.75%
(15%)

15%
(22.5%)

Actual
annual
bonus
award
Richard
Miller

7.5%
(11.25%)

Trigger

Base

Stretch

TRIR as per IOGP

0.77

0.60

0.48

Payout

50%

100%

Trigger

Base

Stretch

Number of LOPC
Tier 1 & 2 as per
IOGP

Tier 1: 0
Tier 2: 2

Tier 1: 0
Tier 2: 1

Tier 1: 0
Tier 2: 0

Payout

20%

50%

100%

2023
Performance

0.20

100%

2023
Performance

Tier 1: 0
Tier 2: 3

In 2023 there was one recordable injury (versus none in 2022) and no
process safety events related to Loss of Primary Containment (LOPC)
at Tier 1. There were three Tier 2 LOPCs recorded in 2023.

Financial
performance

Key value driver for our business and the delivery of this KPI is driven
by how effectively we are deploying out strict cost framework and our
progress in achieving capital efficiency.

5%
(20%)

10%
(15%)

Production
Targets related
to oil production
and vessel
efficiency

Trigger

Base

Stretch

2023
Performance

Operating Cash
Flow (OCF) ($mm)

Payout

726

807

50%

888

100%

902

100%

Normalised operating cash flow of $902 million (from our absolute
OCF of $813 million) is above our stretch target. This has been achieved
despite inflationary cost pressure during the year.

Trigger

Base

Stretch

2023
Performance

10%
(40%)

2.2%
(8.8%)

20%
(30%)

4.4%
(6.6%)

Group production
(kbopd)

Payout

Jubilee production
efficiency
(% of uptime)

Payout

TEN production
efficiency
(% of uptime)

Payout

25%

88%

100%

Trigger

Base

Stretch

2023
Performance

94%

25%

97%

60%

98%

100%

96%

54%

Trigger

Base

Stretch

2023
Performance

95%

25%

98%

60%

99%

100%

95%

27%

The percentage of the award which is payable for the Base level of
performance differs for each measure to reflect the relative challenge
associated with each performance target.
Production of 56.3 kbopd for 2023 was below the Trigger target
primarily due to Jubilee South East schedule delays and reduced water
injection which has now been resolved.

94 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Performance
metric

Business plan
implementation

Performance

Budget Adherence¹

% of TIP
award
(% of salary
maximum)

Actual
TIP award
Rahul Dhir

% of annual
bonus
award
(% of salary
maximum)

Actual
annual
bonus
award
Richard
Miller

7.5%
(30%)

4.95%
(19.8%)

15%
(22.5%)

9.9%
(14.85%)

Trigger

Base

Stretch

2023
Performance

Budget
Adherence

1.1 x Mid

$423m 2 0.9 x Mid

$443m

Payout

50%

100%

32%

Work Programme achieved considering Capex & Performance

Trigger

Base

Stretch

2023
Performance

Adherence to
work programme

Payout

90%

95%

50%

100%

In 2023 we delivered 100% of the planned activity for the year.
Deferral of activity in our Gabon non-operated business and
suspension of the Mauritania decommissioning operations was
replaced by accelerated Jubilee drilling.
The capex programme was delivered in line with Budget, however the
suspension of decommissioning operations in Mauritania and restart
in 2024 will result in a cost increase and this is reflected in the 33%
Payout.

In 2023, we progressed our Net Zero plan including ongoing
implementation of our decarbonisation initiatives on Jubilee and TEN
and together with the Ghana Forestry Commission, engaging with
various stakeholders and conducting field mapping work on a nature-
based project which is progressing to final investment decisions.
During the year, we completed a macro socio-economic impact
assessment of our activities in Ghana to calculate the extent of our
contribution to advancing the Ghanaian economy and improving
life for the people in Ghana; this is core to our purpose of building a
better future through responsible oil and gas development. We also
continued our focus on enhancing employability through supporting
education and enterprise. Working with our partners in Ghana, Kenya,
Guyana and Suriname we enabled more than 10,000 students to
access education and supported more than 150 teachers in training.
During the year, we made progress in all aspects of optimising local
content, including increasing spend with indigenous suppliers;
enhancing supplier education; developing supplier capacity and
monitoring supplier social and economic impact. We also refreshed
our brand and our values, with the aim of creating an inclusive,
transparent, performance-driven organisation where our people are
empowered and energised to bring their best selves to work. The
above performance delivered overall in accordance with the base
target set and provides a solid foundation to build on in the future.
Therefore, a score of 4.2% out of a possible 5% was deemed as
reasonable.

Sustainability
Embed
Sustainability
across the
organisation

5%
(20%)

4.2%
(16.8%)

10%
(15%)

8.4%
(12.6%)

1. This is defined as percentage of work programme delivered, assessing Capex efficiency and performance against pre-set objectives and milestones.

2. Normalised to a budget-comparable value. $423 million times percentage adherence to work programme.

Tullow Oil plc Annual Report and Accounts 2023 – 95

Strategic report

Corporate governance

Financial statements

Supplementary information

Remuneration report continued

Annual Report on Remuneration continued

Details of variable pay earned in the year continued

Performance

% of TIP
award
(% of salary
maximum)

Actual
TIP award
Rahul Dhir

% of annual
bonus
award
(% of salary
maximum)

10%
(40%)

2.65%
(10.6%)

20%
(30%)

Actual
annual
bonus
award
Richard
Miller

5.3%
(7.95%)

Performance
metric

Unlocking
value

Leadership
effectiveness

Progress in 2023 against the six critical actions:
1. Deliver Kenya farm-down and FDP approval: Engagements to

secure a strategic partner for the development project in Kenya
are ongoing.

2. Manage GRA exposure to agreed ways forward: Tullow continues

to engage with the Government of Ghana, including the GRA, with
the aim of resolving these disputes on a mutually acceptable basis.
3. Sign Ghana GSA and Operationalise: Ghana gas commercialisation

via interim gas sales agreement.

4. Deliver enhancement in TEN value: Progressing amended TEN PoD

collaboratively with Government of Ghana.

5. Deleveraging and positioning for future refinancing: Successful

delivery in 2023 of refinancing initiatives to address near-term debt
maturities including debt facility agreed with Glencore.
6. Optimise non-operated and exploration portfolio: Targeted

resource addition achieved through securing new licences in
Gabon and Côte d’Ivoire and portfolio prospect maturation.

The Board made a judgement on the performance of the SLT over
the year. They considered several factors, including the strength and
cohesiveness of the leadership team, a clear strategy being set and
understood across the organisation, a fully engaged workforce, and
the business being positioned for sustainable success. During 2023
the leadership team has strengthened and, supported by the hard
work and dedication of the entire Tullow team, has worked together
cohesively to ensure continued operational delivery through an
unrelenting focus on business performance. The leadership team
also progressed activities to position the organisation for future
sustainable success by unlocking value in the identified critical areas.
This resulted in a score of 3.75%.

5%
(20%)

3.75%
(15%)

10%
(15%)

7.5%
(11.25%)

Relative Total
Shareholder
Return (TSR)³

Performance against a bespoke group of listed exploration and
production companies measured from 1 January 2021 to 31
December 2023. 25% is payable at median, increasing to 100%
payable at upper quartile. Tullow placed below median.

50%
(200%)

0%
(0%)

N/A

Total

100%
(400%)

26.5%
(106%)

100%
(150%)

53%
(79.5%)

3. The TSR comparator group for the 2023 TIP Award was as follows: Africa Oil, BW Energy, Capricorn Energy, Diversified Energy Co., Energean, EnQuest,

Harbour Energy, Kosmos Energy, Maurel and Prom, Pharos Energy and Seplat Energy (NSA).

In line with the Policy, the TIP outcomes are divided evenly between cash and deferred shares up to the first 200% of
base salary. Any amount above 200% of base salary is awarded entirely in deferred shares. Deferred shares are normally
subject to deferral until the fifth anniversary of grant, normally subject to continued service. The table below shows the
values for the Executive Directors participating in TIP.

Director

Rahul Dhir

Cash TIP Deferred TIP

£327,752

In line with the Policy, the Annual Bonus outcomes are divided for two-thirds in cash and one-third in deferred shares.
Deferred shares are normally subject to deferral until the third anniversary of grant, normally subject to continued service.
The table below shows the values for the Executive Directors participating in the Annual Bonus plan.

Director

Richard Miller

Cash Annual
Bonus

Deferred
Annual
Bonus

£193,980

£96,990

96 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

UK SIP shares awarded in 2023 (audited)
The UK SIP is a tax-favoured all-employee plan that enables UK employees to save out of pre-tax salary. Quarterly
contributions are used by the plan trustee to buy Tullow Oil plc shares (partnership shares). The Group funds an award of
an equal number of shares (matching shares). The current maximum contribution is £150 per month. Shares held in the
plan for five years will be free of income tax and national insurance, as well as Capital Gains tax if retained in the plan until
sold. Details of shares purchased and awarded to Executive Directors under the UK SIP are as follows:

Director

Richard Miller

Shares held
01.01.23

17,963

Partnership
shares
acquired
in year

Matching
shares
awarded
in year

Total shares
held 31.12.23
(including
dividend
shares)

Dividend
shares
acquired
in the year 1

SIP shares that
became
unrestricted
in year 1

Total
unrestricted
shares held at
31.12.23

–

17,963

–

1,468

7,342

1. Unrestricted shares (which are included in the total shares held at 31 December 2023) are those which no longer attract a tax liability if they are

withdrawn from the plan.

Executive Director and Non-Executive Director terms of appointment

Director

Rahul Dhir

Richard Miller

Phuthuma Nhleko

Martin Greenslade

Sheila Khama

Mitchell Ingram

Genevieve Sangudi

Rebecca Wiles

Roald Goethe

Number of
complete
years on
the Board

Date of
current
engagement
commenced

Year
appointed

Expiry of
current
term

n/a

24.10.24

31.10.24

01.07.20

01.01.23

25.10.21

01.11.19

26.04.19

26.04.25

09.09.20

09.09.26

26.04.19

25.04.25

28.06.23

27.06.26

24.02.23

23.02.26

2020

2023

2021

2019

2020

2019

2023

In the case of each Non-Executive Director, the appointment is renewable thereafter if agreed by the Director and the
Board. The appointment of any Non-Executive Director may be terminated by either party on three months’ notice.
There are no arrangements under which any Non-Executive Director is entitled to receive compensation upon the early
termination of his or her appointment.

CEO – total pay versus TSR
For 2023 the CEO total pay is based on the summation of the actual base pay, pension, benefits and TIP cash bonus and
share award equivalent value for Rahul Dhir for the financial year ending 31 December 2023.

CEO – Total pay versus RI

Total shareholder return

Return index

120

CEO pay £000

5,000

200

4,000

3,000

2,000

1,000

150

100

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

CEO total pay

Return index

Tullow

FTSE 250

Tullow Oil plc Annual Report and Accounts 2023 – 97

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Financial statements

Supplementary information

Remuneration report continued

Annual Report on Remuneration continued

Comparison of overall performance and pay
The Committee has chosen to compare the TSR of the Company’s ordinary shares against the FTSE 250 index; whilst the
Company was placed outside the index for the majority of 2023, we believe the size and complexity of the organisation
still makes this a comparable index. The values indicated in the graph above show the share price growth plus re-invested
dividends for the period 2014 to 2023 from a £100 hypothetical holding of ordinary shares in Tullow Oil plc and in the index.

The total remuneration figures for the CEO during each of the last 10 financial years are shown in the tables below. The
total remuneration figure includes the annual bonus based on that year’s performance (2014 to 2023), TIP Awards based
on the performance period ending in the relevant year (2014 to 2023). The annual bonus payout and TIP Award, as a
percentage of the maximum opportunity, are also shown for each of these years.

Aidan Heavey1

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Total
remuneration £2,378,316 £2,835,709 £2,893,232 £1,717,276

Annual bonus

TIP

–

23%

–

38%

–

39%

–

40%

–

Year ending in

Paul McDade2

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Year ending in

Total
remuneration

TIP

Dorothy
Thompson3

Total
remuneration

n/a

n/a £1,416,281 £2,759,684 £986,706

n/a

40%

60.3%

–

Year ending in

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

n/a

37,704

418,452

n/a

–

Year ending in

Rahul Dhir4

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Total
remuneration

TIP

n/a

n/a £686,519 £1,860,806 £1,419,400 £1,388,910

n/a

20%

51.2%

30%

26.5%

1 & 2. For 2017, total remuneration figures are shown for Aidan Heavey based on the period he held the office of Chief Executive Officer and for the
transition period up to 31 October 2017, and for Paul McDade from 27 April 2017 when he commenced in his office of Chief Executive.

For 2020, total remuneration is shown for Dorothy Thompson for the period she served as Executive Chair, i.e. 1 January 2020 to 8 September 2020.
For 2019, the amount shown is the Executive Chair fee pro rata for the period 9 December 2019 to 31 December 2019. Dorothy Thompson did not
participate in any incentive plans whilst serving as Executive Chair.
For 2020, total remuneration is shown for Rahul Dhir from the commencement of his appointment as Chief Executive Officer on 1 July 2020.

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Additional statutory information – percentage change in remuneration for Executive and
Non-Executive Directors
The table below shows the percentage change in each of the Directors’ total remuneration (for Executive Directors
excluding the value of any pension benefits receivable in the year) between the financial year ended 31 December 2021,
31 December 2022 and 31 December 2023, compared to that of the average for all employees of the Group.

% change from 2022 to 2023

% change from 2021 to 2022

% change from 2020 to 2021

Salary/fees Benefits

Bonus Salary/fees

Benefits

Bonus Salary/fees

Benefits

Bonus

Phuthuma Nhleko

Rahul Dhir

Richard Miller

Mike Daly3

3.4%

n/a

46% 1

38% 2

n/a

(58% )

1,345%

Martin Greenslade4

14%

1,044%

Mitchell Ingram

Roald Goethe

Rebecca Wiles

Genevieve Sangudi5

Sheila Khama

Average
employees

n/a

(31% )

n/a

(28%)

(10% )

n/a

2,607%

(8.6% )

n/a

14%

n/a

193%

n/a

(40% )

n/a

1,051%

n/a

99%

n/a

(19% )

295%

n/a

379%

n/a

232%

n/a

(100% )

n/a

3.3%

5.6%6

(14.9%)

5.4%

5.7%

(11.7% )

2.8%

7.0%

119.9%

Increase in benefits for Phuthuma Nhleko due to increased travel and subsistence during 2023.

Increase in benefits for Rahul Dhir due to increased travel and subsistence during 2023 and the buy-out of annual leave.

3. The decrease in fees for Mike Daly is due to him stepping down from the Board on 24 May 2023. The increase in benefits reflect increased travel and

subsistence during 2023.

4. The increase in fees for Martin Greenslade reflect his appointment as Senior Independent Director in 2022. Benefits have increased due to increased

travel and subsistence during 2023.

5. The increase in fees for Genevieve Sangudi reflects her appointment as Chair of the Remuneration Committee after the 2022 AGM. Benefits have

increased due to increased travel and subsistence post the COVID-19 pandemic.

Increase in average employee benefits is driven by changes to annual medical insurance premiums.

CEO pay ratio 2023

Year

2023

2022

2021

2020

2019

25th
percentile
pay ratio

Median pay
ratio

75th
percentile
pay ratio

Method

11:1

12:1

16:1

7:1

8:1

10:1

5:1

6:1

8:1

3:1

4:1

We have calculated the CEO pay ratio using the methodology described as ‘Option A’ in the Regulations, as we recognise
that this is the most statistically accurate form of calculation.

For each UK employee¹ the Single Total Figure of Remuneration (STFR) has been calculated as a summation of base pay,
benefits, employer pension contributions receivable during the year ended 31 December 2023 and cash bonus payable
and value of share awards to be granted for the 2023 performance year. The STFR at 25th percentile is £121,044, £178,373
at median and £249,630 at 75th percentile. The wages component at 25th percentile is £87,331, £167,800 at median and
£156,663 at 75th percentile.

1. All STFRs have been based on a full-time equivalent and annualised to provide a dataset for the full year 31 December 2023.

Tullow Oil plc Annual Report and Accounts 2023 – 99

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Remuneration report continued

Annual Report on Remuneration continued

CEO pay ratio 2023 continued
In setting both our CEO remuneration and the remuneration structures for the wider UK workforce, we have adopted a
remuneration structure which includes the same core components for employees at all levels (base pay, benefits, pension,
cash bonus and share awards). Whilst all employees receive a base salary commensurate to the Company’s position in the
market, the differences exist in the quantum of variable pay achievable by our Executive Directors and SLT; at these levels
there is a greater emphasis placed on variable pay given their opportunity to impact directly on Company performance.
Based on this distinction, and taking into account Company performance in a particular financial year and the impact on
variable pay, the Committee believes that the median pay ratio is consistent with and reflective of the wider pay, reward and
progression policies impacting our UK employees. The Committee will continue to monitor longer-term trends.

Relative importance of spend on pay
The following table shows the Group’s actual spend on pay for all employees relative to tax and retained profits.

Staff costs have been compared to tax expense and retained profits in order to provide a measure of their scale
compared to other key elements of the Group’s financial metrics.

Staff costs (£m)

Tax (credit)/expense (£m)1

Retained profits (£m)1

1. Voluntary disclosure.

2023

% change

2022

63.9

318.9

68.3

165.3

(1,818.8)

(1,887.6)

(7%)

48%

(4%)

Details of share awards granted to Executive Directors

Director

Richard Miller1

Award grant
date

Share price
on grant
date

As at
01.01.23

Granted
during the
year

Exercised
during the
year

As at
31.12.23

Earliest date
shares can
be acquired

Latest date
shares can
be acquired

14.02.19

226.30p

13.03.20

15.03.21

14.03.22

30.09.22

08.12.22

13.03.23

28.06.23

10.91p

60.48p

49.14p

42.22p

37.22p

32.00p

27.74p

33,906

152,518

59,117

240,848

71,056

39,979

–

280,576

2,726,460

Dividend equivalents

10.05.19

213.10p

17.10.19

207.20p

594

313

Rahul Dhir2

05.08.20

27.68p 9,000,000

15.03.21

60.48p

319,316

–

14.03.22

13.03.23

28.06.23

49.14p

1,104,269

32.00p

27.74p

–

1,067,930

4,605,929

–

33,906

14.02.22

14.02.29

152,518

13.03.23

13.03.30

59,117

15.03.24

15.03.31

240,848

14.03.25

14.03.32

71,056

30.09.25

30.09.32

39,979

08.12.25

08.12.32

280,576

13.03.26

13.03.33

2,726,460

13.03.28

13.03.33

594

313

14.02.22

14.02.29

14.02.22

14.02.29

– 9,000,000

01.07.25

30.06.30

–

319,316

15.03.26

15.03.31

1,104,269

14.03.27

14.03.32

1,067,930

13.03.28

13.03.33

4,605,929

13.03.28

13.03.33

1. The awards granted in 2019, 2020, 2021, 2022 and in March 2023 are Non-Executive Director ESAP and TIP awards. The award granted in June 2023 is

an Executive Director LTIP grant for the 2023–2025 performance period with performance conditions attached.

2. Share awards granted on 05 August 2020 represent ‘Buy-out Awards’ to replace share arrangements that were forfeited upon leaving his former employer

(full details of which are available in the 2020 Directors’ Remuneration report). The awards granted in 2021, 2022 and in March 2023 are TIP awards. The award
granted in June 2023 is an Executive Director LTIP grant for the 2023–2025 performance period with performance conditions attached.

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Share price range
During 2023, the highest mid-market price of the Company’s shares was 39.04p and the lowest was 22.60p. The year-
end price was 38.92p.

Details of Directors’ interests
The interests of the Directors (all of which were beneficial), who held office during FY 2023, are set out in the table below:

Ordinary shares held

01.01.23

31.12.23

Executive Directors

% of salary
under 2023
Remuneration
Policy
shareholding
guidelines 1

TIP
Awards

LTIP
Awards

Buyout Awards

SIP

SIP total

Unvested Vested

Unvested Unvested Vested Restricted Unrestricted 31.12.23

Rahul Dhir2

1,346,000

1,706,900

325%

2,491,515

–

4,605,929 9,000,000

–

Richard
Miller

–

35,500

55%

691,576 187,331

2,726,460

Non-Executive Directors

Mike Daly

Genevieve
Sangudi

Roald
Goethe3

Rebecca
Wiles

Sheila
Khama

Martin
Greenslade

Mitchell
Ingram

Phuthuma
Nhleko

4,795

–

100,000

22,000,000 23,700,000

–

7,070

39,970

60,000

50,000

–

142,500

–

10,621

7,342

17,963

–

1. Calculated using share price of 38.92p at year end, excluding awards remaining subject to performance conditions. Under the Company’s

shareholding guidelines, each Executive Director is required to build up their shareholdings in the Company’s shares to at least 400% of their current
salary. Further details of the minimum shareholding requirement are set out in the Remuneration Policy Report.

2. 1,346,000 ordinary shares held by Rahul Dhir are in respect of his buyout-award granted on commencement of employment. The additional ordinary

shares held reflect subsequent open market purchases.

3. Roald Goethe was appointed as a Non-Executive Director on 24 February 2023 and disclosed that he or persons closely associated with him hold

22,000,000 ordinary shares of 10p each in the Company and $2,500,000 Senior Notes due 2025.

There have been no changes in the interests of any Director between 1 January 2024 and the date of this report.

Implementation of Policy for Executive Directors for 2024
The Remuneration Policy will be implemented during 2024 as follows:

• Base salary for Rahul Dhir will be increased by 2.8%, below the typical increase awarded to UK- based

employees for 2024.

• Base salary for Richard Miller will be increased by 9.3% to move towards market norms as his experience and

contribution increased.

• Pension provision will be 15% of salary for Rahul Dhir and 10% of salary for Richard Miller (workforce aligned).

• TIP Award for Rahul Dhir with a maximum opportunity of 400% of salary based on: Safety (7.5%), Financial performance

(5.0%), Production (10.0%), Business plan implementation (7.5%), Sustainability (5.0%), Unlocking value (10.0%),
Leadership effectiveness (5.0%) and Relative TSR (50%) for the 2022-2024 performance period.

• LTIP Award for Rahul Dhir with a maximum opportunity of 250% of salary based 50% on our relative and 50% on our

absolute total shareholder returns during the 2024–2026 performance period.

• LTIP Award for Richard Miller with a maximum opportunity of 250% of salary based 50% on our relative and 50% on our

absolute total shareholder returns during the 2024–2026 performance period.

• The TSR comparator group for both the TIP and 2024–2026 LTIP Awards will be as follows: Africa Oil, BW Energy,
Capricorn Energy, Diversified Energy Co., Energean, EnQuest, Harbour Energy, Kosmos Energy, Maurel and Prom,
Pharos Energy and Seplat Energy (NSA).

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Implementation of Policy for Executive Directors for 2024 continued
• Our absolute total shareholder return target for the 2024–2026 LTIP Award will be on average 20% per annum at

Threshold and on average 30% per annum at Maximum. Our relative total shareholder return target for the 2024–2026
LTIP Award will be comparator group Median at Threshold and comparator group Upper Quartile at Maximum.

• 2024 Annual Bonus opportunity for Richard Miller with a maximum opportunity of 150% of salary based on: Safety
(15%), Financial performance, (10%), Production (20%), Business plan implementation (15%), Sustainability (10%),
Unlocking value (20%) and Leadership effectiveness (10%).

• No changes will be made to the Chair nor the Non-Executive Director fees from 2023 levels.

Governance

Remuneration Committee members
Genevieve Sangudi (Committee Chair), Mitchell Ingram and Martin Greenslade.

Remuneration Committee membership and attendance
All members of the Committee are independent Non-Executive Directors. None of the Committee members has day-to-
day involvement with the business and nor do they have any personal financial interest, except as shareholders, in the
matters to be recommended. The number of scheduled and unscheduled meetings held and the attendance by each
member is shown in the table on page 89.

The Company Secretary is available to assist the members of the Committee as required, ensuring that timely and
accurate information is distributed accordingly.

Advice received during 2023
The Committee received external advice from Deloitte LLP (Deloitte) during 2023. Deloitte are members of the Remuneration
Consultants Group and are a signatory to its Code of Conduct. During the year Deloitte provided no other services to the
Company. Fees (ex VAT) paid to Deloitte for advice provided during 2023 amounted to £48,550. Deloitte has no other
connections to the Company or the Directors that affect their independence. The Committee evaluates the services provided
by external advisers and is satisfied that the advice received from Deloitte was objective and independent.

Activities of the Committee during 2023
A summary of the main Committee activities during 2023 are set out below:

• Setting an appropriately stretching set of key performance metrics for the 2023 KPI scorecard.

• Monitoring progress against the 2023 KPI scorecard.

• Reviewing feedback received from shareholders at the 2023 AGM.

• Undertaking a review of the Directors’ Remuneration Policy, including consideration of alternative incentive structures,

performance measures, and other Policy elements.

• Review of changes in remuneration-related guidance, shareholder policies and governance matters.

• Reviewing the remuneration arrangements, including benchmarking of Total Remuneration for the SLT and reviewing

the implementation of the revised pay philosophy and principles for the wider workforce.

• Review of the Committee’s performance and terms of reference.

• Review of draft KPIs for 2024 to align with strategy and culture of Tullow.

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Principles of Executive Director remuneration
The Committee seeks to ensure that the Directors Remuneration Policy and its practices are consistent with the six
factors set out in Provision 40 of the new UK Corporate Governance Code:

Clarity
Our Policy is well understood by the SLT and has been clearly articulated to our shareholders and representative bodies
(both on an ongoing basis and during the recent consultation exercise).

Simplicity
The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and
deliver unintended outcomes. Therefore, a key objective of the Committee is to ensure that our Executive remuneration
policies and practices are straightforward to communicate and operate.

Risk
Our Policy has been designed to ensure that inappropriate risk taking is discouraged and will not be rewarded via: (i)
the balanced use of both annual and three-year performance periods which employ a blend of financial, non-financial
and shareholder return targets; (ii) the significant role played by deferred equity in our incentive plans (together with in-
employment and post-cessation shareholding guidelines and five-year vesting period); (iii) malus/clawback provisions;
and (iv) the ability to exercise negative discretion to remuneration outcomes.

Predictability
The TIP and Annual Bonus and LTIP are subject to an individual annual cap and market-standard dilution limits.

Proportionality
There is a clear link between individual awards, delivery of strategy and our long-term performance. In addition, the
significant role played by incentive/‘at-risk’ pay, together with the structure of the Executive Directors’ service contracts,
ensures that poor performance is not rewarded.

Alignment to culture
Our Executive pay policies are fully aligned to Tullow’s culture through the use of metrics in the TIP, LTIP and Annual
Bonus Plan that measure how we perform against our financial and non-financial KPIs.

Shareholder voting at the AGM
At last year’s AGM on 24 May 2023 the remuneration-related resolutions received the following votes from shareholders:

For

Against

Total votes cast (for and against)

Votes withheld

For

Against

Total votes cast (for and against)

Votes withheld

2022 Annual Statement and Annual Report on Remuneration

Total number of votes

% of votes cast

900,774,660

2,895,406

Total number of votes

903,670,066

642,220

99.68%

0.32%

% of ISC votes

62.43%

2023 Remuneration Policy

Total number of votes

% of votes cast

890,988,764

12,691,569

Total number of votes

903,680,333

631,953

98.60%

1.40%

% of ISC votes

62.43%

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Remuneration report continued

Directors’ Remuneration Policy Report
This section of the report sets out the Remuneration Policy
(the Policy) for Executive and Non-Executive Directors which
was approved by shareholders at the 2023 AGM on 24 May
2023. The Policy has come into effect from the date of the
AGM and will apply for a period of up to three years.

Policy overview
The principles of the Remuneration Committee are to
ensure that remuneration is linked to Tullow’s strategy
and promote the attraction, motivation and retention of
the highest-quality executives who are key to delivering
sustainable long-term value growth and substantial returns
to shareholders.

Policy review process
The Committee undertook a review of Directors’
Remuneration Policy to ensure that it is appropriate to
support our strategy. The central focus of the Committee
was developing an incentive structure that would reward
growth and value creation and align management
with shareholders.

The Committee was mindful in its deliberations on the
new Remuneration Policy of any potential conflicts of
interest and sought to minimise them through an open
and transparent internal consultation process, by seeking
independent advice from its external advisers and by
undertaking a broad shareholder consultation exercise.

2023 Policy changes
The main change under the Policy is the transition from the
Tullow Incentive Plan to the grant of separate annual bonus
and LTIP awards. This transition is structured to ensure that
there are no overlaps or gaps in performance assessment
for Executive Directors appointed prior to 2023.

For the current CEO the TIP will continue for 2024
(capturing 2022–2024 performance period) in accordance
with the structure approved by shareholders at the 2020
AGM. No TIP awards will be made after 2024. Other
Executive Directors will not participate in the TIP for 2024.

Executive Directors appointed from 2023 onwards,
including the current CFO, are eligible for an annual bonus
award from 2023 onwards. Our current CEO will be eligible
for an annual bonus award from 2025 onwards. The
maximum opportunity will be 150% of salary and one-third
of any bonus earned will normally be deferred into Tullow
shares for three years.

All Executive Directors are eligible for an LTIP award from
2023 onwards. The first grant captured performance over
the 2023–2025 period. The maximum award will be 250%
of salary, and awards will be subject to a two-year holding
period following vesting.

The policy was also updated for developments in corporate
governance and feedback received from our shareholders.

Summary Directors’ Remuneration Policy
Base salary
Purpose and link to strategy

Operation

To provide an appropriate level of
fixed cash income.
To attract and retain individuals
with the personal attributes, skills
and experience required to deliver
our strategy

Generally reviewed annually. Base salaries will be set by
the Committee taking into account:
• The scale, scope and responsibility of the role.
• The skills and experience of the individual.
• The base salary of other employees, including
increases awarded to the wider population.

• The base salary of individuals undertaking similar

roles in companies of comparable size and
complexity. This may include international oil and gas
sector companies or a broader group of FTSE-listed
organisations.

Maximum opportunity

Any increases to current Executive
Director salaries, presented in the
‘Application of Policy in 2024’ column
below this Policy table, will not normally
exceed the average increase awarded to
other UK-based employees.
Increases may be above this level in
certain circumstances, for instance
if there is an increase in the scale,
scope or responsibility of the role
or to allow the base salary of newly
appointed Executives to move towards
market norms as their experience and
contribution increase.

Performance and provisions for the recovery

A broad assessment of individual and business performance is used as part of the salary review.
No recovery provisions apply.

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Pension and benefits
Purpose and link to strategy

Operation

To attract and retain individuals
with the personal attributes, skills
and experience required to deliver
our strategy.

Defined contribution pension scheme or salary supplement
in lieu of pension. The Company does not operate or have
any legacy defined benefit pension schemes.
Medical insurance, income protection and life assurance.
Additional benefits may be provided as appropriate.
Executive Directors may participate in the Tullow UK
Share Incentive Plan (SIP) and the Tullow Sharesave
(SAYE) plan.

Maximum opportunity

Pension: Workforce aligned for Executive
Directors (as a percentage of salary).
Employees currently receive an employer
contribution of 10% of salary, increasing
to 15% of salary for employees over 50.
Benefits: The range of benefits that may
be provided is set by the Committee
after taking into account local market
practice in the country where the
Executive Director is based. No monetary
maximum is given for benefits provided
to the Executive Directors as the cost will
depend on individual circumstances.
Tullow UK SIP and SAYE: Up to HM Revenue
& Customs (HMRC) limits. Maximum
participation levels and matching levels for
all staff, including Executive Directors, are
set by reference to the rules of the plan and
relevant legislation.

Performance and provisions for the recovery

Not applicable.

Legacy Tullow Incentive Plan (TIP) – applicable only for current CEO and for 2023 and 2024 only
Purpose and link to strategy

Maximum opportunity

Operation

400% of salary.
Dividend equivalents will accrue on TIP
deferred shares over the vesting period.

To provide a simple, competitive,
performance-linked incentive
plan that:
• Aligns the interests of

management and shareholders.

• Promotes the long-term
success of the Company.
• Provides a real incentive
to achieve our strategic
objectives and deliver superior
shareholder returns.

• Will attract, retain and motivate
individuals with the required
personal attributes, skills and
experience.

The current CEO is eligible to receive a TIP award,
subject to performance, for 2023 (for the 2021–23
period) and 2024 (for the 2022–24 period). No further
TIP awards will be granted after 2024, and any Executive
Directors appointed from 2023 onwards, including the
current CFO, are not eligible to participate in the plan.
An annual TIP award consisting of up to 400% of base
salary, which is divided evenly between cash and
deferred shares up to the first 200% of base salary.
Any amount above 200% of base salary is awarded
entirely in deferred shares.
Deferred shares are normally subject to deferral until the
fifth anniversary of grant, normally subject to continued
service.
TIP awards are non-pensionable and will be made in line
with the Committee’s assessment of performance targets.
At the discretion of the Committee, any portion of the
cash component of a TIP award can be satisfied by
granting deferred shares with a vesting date set by the
Committee being not earlier than the first anniversary
of grant.

Performance and provisions for the recovery

A balanced scorecard of stretching financial and operational objectives, linked to the achievement of Tullow’s long-term strategy, will
be used to assess TIP outcomes which may include targets relating to: relative or absolute total shareholder return (TSR); earnings per
share (EPS); environmental, health and safety (EHS); financial; production; operations; project; exploration; or specific strategic and
personal objectives.
Performance will typically be measured over one year for all measures apart from TSR and EPS, which, if adopted, will normally be
measured over the three financial years prior to grant.
No more than 25% of the maximum TIP opportunity will be payable for threshold performance.
Recovery provisions apply (see below).

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Maximum opportunity

Up to 150% of salary.

Directors’ Remuneration Policy Report continued

Summary Directors’ Remuneration Policy continued
Annual bonus
Purpose and link to strategy

Operation

The executive bonus scheme
rewards Executive Directors for
achieving financial and strategic
targets in the relevant year by
reference to operational targets
and individual objectives.

The Current CEO will be eligible to participate in the
Annual Bonus plan from 2025 onwards.
The current CFO and any newly appointed Executive
Directors are eligible to participate from 2023 onwards.
Targets are reviewed annually and any pay-out is
determined by the Committee after the year end based
on targets set for the financial period.
The Committee has discretion to amend the pay-out
should any formulaic output not reflect the Committee’s
assessment of overall business performance or if the
Committee considers the formulaic outturn is not
appropriate in the context of other factors considered by
the Committee to be relevant.
One-third of any bonus earned will normally be deferred
into shares for a period of three years. Deferred bonus
awards may take the form of nil-cost options, conditional
awards of shares or such other form as has a similar
economic effect.
Additional shares may be delivered in respect of shares
subject to deferred bonus awards to reflect the value of
dividends paid during the period beginning with the date
of grant and ending with the date of vesting (this payment
may assume that dividends had been reinvested in Tullow
shares on a cumulative basis).

Performance and provisions for the recovery

A balanced scorecard of stretching financial and operational objectives, linked to the achievement of Tullow’s long-term strategy, will
be used to assess Annual Bonus outcomes. Performance will typically be measured over one year.
No more than 25% of the maximum opportunity will be payable for threshold performance.
Recovery provisions apply (see below).

Maximum opportunity

Up to 250% of salary.

Long Term Incentive Plan (LTIP)
Purpose and link to strategy

Operation

The LTIP provides a clear link
between the remuneration of
the Executive Directors and the
creation of value for shareholders
by rewarding the Executive
Directors for the achievement of
longer-term objectives aligned to
shareholders’ interests.

Executive Directors will be eligible to be granted LTIP
award from 2023 onwards.
Awards are normally made on an annual basis and
normally vest three years from grant subject to continued
employment and the satisfaction of challenging three-
year performance targets.
A two-year holding period following LTIP vesting applies
to grants to Executive Directors. In total, this results in a
five-year combined vesting and holding period.
The Committee has discretion to vary the formulaic
vesting outturn if it considers that the outturn does not
reflect the Committee’s assessment of performance or is
not appropriate in the context of other factors considered
by the Committee to be relevant.
Additional shares may be delivered in respect of
shares which vest under the LTIP to reflect the value of
dividends, which would have been paid on those shares
during the period beginning with the date of grant and
ending with the vesting date (this payment may assume
that dividends had been reinvested in Tullow shares on a
cumulative basis).

Performance and provisions for the recovery

Performance is usually measured over a three-year period.
Performance measures for LTIP awards will include financial measures which may include, but are not limited to, total shareholder
return (TSR), and may include strategic measures (which may include ESG measures).
Subject to the Committee’s discretion to override formulaic outturns, awards will normally vest as to 25% for threshold performance,
increasing to 100% for maximum performance.
Recovery provisions apply (see below).

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Shareholding guidelines
Purpose and link to strategy

To align the interests of
management and shareholders
and promote a long-term
approach to performance and
risk management.

Maximum opportunity

400% of salary.

Operation

Executive Directors are required to retain at least 100%
of post-tax share awards until a minimum shareholding
equivalent to 400% of base salary is achieved in
owned shares.
Unvested TIP, LTIP and Deferred Bonus shares net
of applicable taxes count towards the minimum
shareholding requirement.
Shares included in this calculation are those held
beneficially by the Executive Director and his or her
spouse/civil partner.
50% of the shareholding guideline (i.e. 200% of salary) will
need to be retained by Executive Directors for two years
post-cessation.

Performance and provisions for the recovery

Not applicable.

Non-Executive Directors
Purpose and link to strategy

Operation

To provide an appropriate fee level.
To attract individuals with the
necessary experience and ability.
To make a significant contribution
to the Group’s activities while also
reflecting the time commitment
and responsibility of the role.

The Chair is paid an annual fee and the Non-Executive
Directors are paid a base fee and additional responsibility
fees, for example for the role of Senior Independent
Director or for chairing a Board Committee.
Fees are normally reviewed annually.
Each Non-Executive Director is also entitled to a
reimbursement of necessary travel and other expenses
including associated tax costs.
Non-Executive Directors do not participate in any share
scheme or annual bonus scheme and are not eligible to
join the Group’s pension schemes.

Performance and provisions for the recovery

Not applicable.

Maximum opportunity

Non-Executive Director remuneration is
determined within the limits set by the
Articles of Association.
There is no maximum prescribed fee
increase although fee increases for
Non-Executive Directors will not normally
exceed the average increase awarded
to Executive Directors. Increases may be
above this level if there is an increase in the
scale, scope or responsibility of the role.

Operation of share plans
The Committee will operate the TIP, LTIP and Deferred Bonus in accordance with the Plan rules, Listing Rules and HMRC
rules where relevant. The Committee, consistent with market practice, retains discretion over a number of areas relating
to the operation and administration of the plans in relation to the SLT, including Executive Directors. These include (but
are not limited to) the following (albeit with the level of award restricted as set out in the Directors’ Remuneration Policy):

• Who participates.

• The timing of grant of awards and/or payment.

• The size of awards and/or payment.

• Discretion relating to the measurement of performance in the event of a change of control or reconstruction.

• Determination of a good leaver (in addition to any specified categories) for incentive plan purposes and a good

leaver’s treatment.

• Adjustments to awards required in certain circumstances (e.g. rights issues, corporate restructuring and special dividends).

• The ability to adjust existing performance conditions for exceptional events so that they can still fulfil their

original purpose.

The choice of the performance metrics applicable to the TIP and LTIP awards, which are set by the Committee at the start
of the relevant financial year, reflects the Committee’s belief that any incentive compensation should be appropriately
challenging and tied to the delivery of stretching financial, operational and TSR-related objectives, explicitly linked to the
achievement of Tullow’s long-term strategy.

In addition to the TIP, LTIP and Deferred Bonus, Executive Directors are also eligible to participate in the UK SIP or
any other all-employee share plans on the same terms as other employees. All-employee share plans do not operate
performance conditions.

Tullow Oil plc Annual Report and Accounts 2023 – 107

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Financial statements

Supplementary information

Remuneration report continued

Directors’ Remuneration Policy Report continued

Calculation of TIP awards
In addition to base salary and other benefits described in the Remuneration Policy, for 2023 and 2024 Executive Directors
shall be eligible to receive an award issued under the rules of the TIP (a TIP Award). The TIP combines short- and long-
term incentive-based pay and includes a cash bonus component and a deferred share award component.

At the beginning of the 2023 and 2024 financial years, the Committee will determine a multiple of base salary, subject
to the limits established under this Policy, to apply to a TIP Award. At the same time the Committee will also determine
a balanced corporate scorecard of performance metrics applicable to any TIP Award. The choice of the performance
metrics and the weightings given to them, which are set by the Committee at the start of the relevant financial year
normally, reflect the Committee’s belief that any incentive compensation should be appropriately challenging and tied to
the delivery of stretching financial, operational and total shareholder return (TSR) related objectives, explicitly linked to the
achievement of Tullow’s long-term strategy.

Following completion of the financial year, the Committee will review the Company’s performance against the corporate
scorecard resulting in a percentage score. The multiple set by the Committee is then applied to the percentage score to
determine the total TIP Award amount. A TIP Award is divided equally between cash bonus and deferred shares up to the
first 200% of base salary. Any portion of a TIP Award above 200% of base salary shall be satisfied in deferred shares only.
Deferred shares forming part of a TIP Award are normally deferred for five years and are subject to malus and clawback. In
its discretion, the Committee may elect to satisfy any portion of the cash bonus element of a TIP Award in deferred shares
which will be deferred for a period determined by the Committee, being not less than one year from the date of grant.
Deferred shares issued in lieu of any portion of the cash bonus component of a TIP Award shall be subject to malus,
clawback and the minimum shareholding requirements set out on the previous page.

Performance measures for LTIP and annual bonus awards
The choice of the performance metrics and range of targets applicable to the annual bonus plan for Executive Directors
reflect the Committee’s belief that any incentive compensation should be appropriately challenging and tied to both
the delivery of robust performance relating to the Group’s financial key performance indicators and, where appropriate,
specific individual/strategic objectives (including ESG objectives). Performance metrics applicable to the LTIP are
selected to support Company strategy and provide shareholder alignment. Targets applying to the annual bonus and
LTIP are reviewed annually, based on a range of internal and external reference points. Performance targets are set to be
stretching but achievable, with regard to the particular strategic priorities and business environment in a given year.

Legacy remuneration
For the avoidance of doubt, the Committee reserves the right to make any remuneration payments and/or payments for
loss of office (including exercising any discretions available to it in connection with such payments) notwithstanding that
they are not in line with the 2023 Remuneration Policy set out in the document where the terms of the payment were
agreed (i) before the 2023 Remuneration Policy came into effect, provided that the terms of the payment were consistent
with any applicable shareholder-approved Directors’ Remuneration Policy in force at the time they were agreed or were
otherwise approved by shareholders; or (ii) at a time when the relevant individual was not a Director of the Company (or
other persons to whom the Policy set out above applies) and, in the opinion of the Committee, the payment was not in
consideration for the individual becoming a Director of the Company or such other person.

For these purposes ‘payments’ includes the Committee satisfying awards of variable remuneration and, in relation to an
award over shares, the terms of the payment are ‘agreed’ no later than the time the award is granted. This Policy applies
equally to any individual who is required to be treated as a Director under the applicable regulations.

Discretion
The Committee reserves the right to exercise its discretion in the event of exceptional and unforeseen positive or
negative developments during the performance period. In addition, the Committee reserves the right to reduce the
TIP, annual bonus or LTIP payment where the Committee considers that the level of payment is not commensurate with
overall corporate performance and returns delivered to shareholders over the performance period.

108 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Recovery provisions
TIP Awards are subject to malus and clawback. The Committee retains discretion to apply malus and clawback to both
the cash and deferred share elements of the TIP during the five-year vesting period, triggers are outlined in the TIP rules,
including but not limited to a material adverse restatement of the financial accounts or reserves, a catastrophic failure of
operational, EHS and risk management or corporate failure or insolvency.

Annual bonus and LTIP awards are subject to malus and clawback. The Committee retains discretion to apply malus
and clawback to the cash bonus, deferred bonus and LTIP awards up to three years after the payment or vesting of
awards. Malus and clawback triggers are outlined in the plan rules and include but are not limited to a material adverse
restatement of the financial accounts or reserves, a catastrophic failure of operational, EHS and risk management or
corporate failure or insolvency.

Illustration of remuneration scenarios of Executive Directors

2024
The charts below show how the composition of the Executive Directors’ remuneration packages varies at different levels
of performance under the Remuneration Policy, as a percentage of total remuneration opportunity and as a total value for
the current CEO and CFO for 2024.

r
i
h
D

u
h
a
R

r
e

l
l
i

M
d
r
a
h
c
R

Fixed

Target

Maximum

Maximum +50% share price growth

Fixed

Target

Maximum

Maximum +50% share price growth

£0.0m £0.5m £1.0m

£1.5m

£2.0m £2.5m

£3.0m £3.5m

£4.0m £4.5m

Fixed pay

TIP (Cash)

TIP (Deferred shares)

Annual bonus

LTIP

1. Base salary is effective as at 1 April 2024.

2. Fixed pay includes pension in line with wider workforce.

3. For the CEO, the target TIP Award is taken to be 50% of the maximum annual opportunity for 2024 (200% of salary).The maximum value of the TIP is

taken to be 400% of salary (i.e. the maximum annual opportunity) for 2024.

4. For the CFO, the target Annual Bonus and LTIP Award is taken to be 50% of the maximum opportunity for 2024 (Annual Bonus: 75% of salary; LTIP

Award: 125% of salary). The maximum value of the Annual Bonus is taken to be 150% and LTIP Award is taken to be 250% of salary (i.e. the maximum
annual opportunity).

5. No share price appreciation has been assumed for the fixed, target and maximum scenarios.

6. The Committee is aware of the regulations requiring an indication of the impact of 50% share price appreciation on the maximum scenario in the chart
above. For the TIP, given that TSR performance is measured over three years prior to grant of award, share price appreciation over the performance
period would not impact on the value of the maximum award.

Tullow Oil plc Annual Report and Accounts 2023 – 109

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Financial statements

Supplementary information

Remuneration report continued

Directors’ Remuneration Policy Report continued

Illustration of remuneration scenarios of Executive Directors continued

2025 onwards
The charts below show how the composition of the Executive Directors’ remuneration packages varies at different levels
of performance under the Remuneration Policy, as a percentage of total remuneration opportunity and as a total value for
the current CEO and CFO for 2025:

r
i
h
D

u
h
a
R

r
e

l
l
i

M
d
r
a
h
c
R

Fixed

Target

Maximum

Maximum +50% share price growth

Fixed

Target

Maximum

Maximum +50% share price growth

£0.0m £0.5m £1.0m

£1.5m

£2.0m £2.5m

£3.0m £3.5m

£4.0m £4.5m

Fixed pay

Annual bonus

LTIP

1. Base salary is effective as at 1 April 2024.

2. Fixed pay includes pension in line with wider workforce.

3. The target Annual Bonus and LTIP Award is taken to be 50% of the maximum opportunity for 2024 (Annual Bonus: 75% of salary; LTIP Award: 125% of

salary). The maximum value of the Annual Bonus is taken to be 150% and LTIP Award is taken to be 250% of salary (i.e. the maximum annual opportunity).

4. No share price appreciation has been assumed for the fixed, target and maximum scenarios. 50% share price appreciation is applied to the maximum

scenario in the chart above.

Service agreements
Executive Director service agreements set out restrictions on the ability of the Director to participate in businesses
competing with those of the Group or to entice or solicit away from the Group any senior employees in the six months after
ceasing employment. The above reflects the Committee’s policy that service contracts should be structured to reflect the
interests of the Group and the individuals concerned, while also taking due account of market and best practice.

The term of each service contract is not fixed. Each agreement is terminable by the Director on six months’ notice and by
the employing company on 12 months’ notice.

The Executive Directors’ service agreements and the appointment letters of the Non-Executive Directors are available for
inspection by shareholders at the Company’s registered office.

External appointments
The Board operates a formal policy in relation to the external directorships that an Executive Director may hold. Whilst the
policy does not prescribe a maximum number of external appointments, it sets out guidance that an Executive Director
should not hold more than one non-executive director position in a FTSE 350 company.

110 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Policy for new appointments
The remuneration of a new Executive Director will normally include salary, benefits, pension and participation in the
annual bonus and LTIP arrangements in accordance with the policy for Executive Directors’ remuneration. A newly
appointed Executive Director would not participate in the TIP. In addition, the Committee has discretion to include any
other remuneration component or award which it feels is appropriate taking into account the specific circumstances of
the recruitment, subject to the principles and limits set out below. The key terms and rationale for any such component
would be disclosed as appropriate in the Directors’ Remuneration report for the relevant year.

Policy

Salary

Salary will be set taking into account the individual’s experience and skills, prevailing market rates in
companies of comparable size and complexity and internal relativities.

Where appropriate, the Committee may set the initial salary below the market level (e.g. if the
individual has limited PLC board experience or is new to the role), with the intention to make phased
pay increases over a number of years, which may be above those of the wider workforce, to achieve
the desired market positioning. These increases will be subject to continued development in the role.

Buy-out
awards

Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous
employer as a result of appointment, the Committee may offer compensatory payments or awards, in
such form as the Committee considers appropriate, taking into account all relevant factors including
the form of awards, expected value and vesting time frame of forfeited opportunities.

Maximum
level of
variable
remuneration

Other
elements of
remuneration

When determining any such buy-out, the guiding principle would be that awards would generally be
on a like-for-like basis unless this is considered by the Committee not to be practical or appropriate.

Award may be facilitated under the existing incentive plans where possible, but also using Rule 9.4.2.
of the Listing Rules, if necessary.

The Committee will not offer non-performance-related variable remuneration and the maximum level
of variable remuneration which may be granted (excluding buyout awards) is 400% of base salary,
which is in line with the current maximum limit under the annual bonus and LTIP.

Other elements may be included in the following circumstances:

An interim appointment being made to fill an Executive Director role on a short-term basis.

If exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive
function on a short-term basis.

If an Executive Director is recruited at a time in the year when it would be inappropriate to provide an
annual bonus or LTIP award for that year. Subject to the limit on variable remuneration set out above, the
quantum in respect of the period employed during the year may be transferred to the subsequent year.

If the Executive Director is required to relocate, reasonable relocation, travel and subsistence
payments may be provided (either via one-off or ongoing payments or benefits).

For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role may be
allowed to pay out according to its terms, adjusted as relevant to take account of the appointment. In addition, any other
ongoing remuneration obligations existing prior to appointment may continue. For external and internal appointments,
the Committee may agree that the Company will meet certain relocation and/or incidental expenses as appropriate.

Fee levels for Non-Executive Director appointments will take into account the expected time commitment of the role and
the current fee structure in place at that time.

Policy for loss of office
Executive Directors’ service contracts are terminable by the Director on six months’ notice and by the relevant employing
company on 12 months’ notice. There are no specific provisions under which Executive Directors are entitled to receive
compensation upon early termination, other than in accordance with the notice period.

On termination of an Executive Director’s service contract, the Committee will take into account the departing Director’s duty
to mitigate his loss when determining the amount of any compensation. Disbursements such as legal and outplacement costs
and incidental expenses may be payable where appropriate, and payments may be made for accrued holiday.

The Committee reserves the right to make payments by way of settlement of any claim arising in connection with the
cessation of employment.

Tullow Oil plc Annual Report and Accounts 2023 – 111

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Corporate governance

Financial statements

Supplementary information

Remuneration report continued

Directors’ Remuneration Policy Report continued

Policy for loss of office continued
The following payments may also be made to departing Executive Directors:

TIP (cash)

TIP (shares)

Cessation of employment due to death, injury, disability, retirement (for
TIP awards only), redundancy, the participant’s employing company
or business for which they work being sold out of the Company’s Group
or in other circumstances at the discretion of the Committee.

Cessation during a financial year, or after the year but prior
to the normal TIP Award date, may, at the discretion of the
Committee, result in the cash part of the TIP being paid
following the date of cessation (prorated for the proportion
of the year worked).

Cessation during a financial year, or after the year but prior
to the normal TIP Award date, may, at the discretion of the
Committee, result in an award of deferred shares being made
(prorated for the proportion of the year worked). Unvested
TIP shares generally vest at the normal vesting date (except
on death or retirement – see below) unless the Committee
determines they should vest at cessation. On death, TIP shares
generally vest immediately unless the Committee determines
that they should vest at the normal vesting date. On retirement
(as evidenced to the satisfaction of the Committee), TIP shares
will vest at the earlier of the normal vesting date and three years
from retirement unless the Committee determines they should
vest at cessation.

Cessation of employment due to other
reasons (e.g. termination for cause)

No entitlement to the cash part
of the TIP following the date notice
is served.

Unvested TIP shares lapse. No
entitlement to the deferred share
element of the TIP following the
date notice is served.

Annual bonus

The Executive Director will normally be considered for
a bonus payment.

No entitlement to annual bonus
award following date notice is served.

It is the Committee’s policy to ensure that any bonus payment
reflects the departing Executive Director’s performance. Unless
the Committee determines otherwise, any bonus payment
will be paid at the usual time following the determination of
performance measures and be subject to a pro rata reduction
for time served during the performance period.

Deferred
bonus shares

Unvested awards will continue and will vest at the normal
vesting date. In exceptional circumstances, the Committee may
decide that the Executive Director’s deferred share awards will
vest at the date of cessation of employment.

LTIP awards

Unvested awards will continue and will remain capable of
vesting at the normal vesting date. To the extent that the awards
vest, a two-year holding period would then normally apply.

In exceptional circumstances, the Committee may decide that
the Executive Director’s awards will vest and be released early at
the date of cessation of employment or at some other time (e.g.
following the end of the performance period).

In either case, vesting will depend on the extent to which the
performance measures have been satisfied and will be subject
to a pro rata reduction of the awards for time served from the
grant date to the date of cessation of employment (although
the Committee has discretion to disapply time prorating if the
circumstances warrant it).

Unvested awards will normally
lapse on cessation of employment.

If an Executive Director leaves
for any reason after an award has
vested but before it has been
released (i.e. during a holding
period), their award will ordinarily
continue to be released at the
normal release date.

112 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

The terms applying to any buy-out awards on cessation of employment or change of control would be determined when
the award is granted. Such terms would normally be consistent with the principles outlined above.

In the event of a change of control deferred bonus shares will vest in full. LTIP awards will vest early in the event of change
of control. The level of vesting will be determined taking into account the extent to which performance measures are
satisfied at the date of the relevant event and, unless the Committee determines otherwise, awards will be prorated for
time served from the grant date to the date of the relevant event. TIP awards will be treated in line with the plan rules.

Consideration of shareholders’ views
The Committee considers shareholder feedback received at the AGM each year and, more generally, guidance from
shareholder representative bodies. This feedback, plus any additional feedback received during any meetings from time to
time, is considered as part of the Company’s annual review of the continuing appropriateness of the Remuneration Policy.

Prior to the finalisation of this Policy the Committee consulted with all major shareholders on the proposals. This
feedback helped inform the final Policy put forward for shareholder approval. The Committee will seek to engage directly
with major shareholders and their representative bodies should any material changes be proposed to be made to the
Remuneration Policy.

Employment conditions elsewhere in the Group
In setting the Remuneration Policy and remuneration levels for Executive Directors, the Committee is cognisant of the
approach to rewarding employees in the Group and levels of pay increases generally. The Committee does not currently
formally consult directly with employees on the executive pay policy, but it does receive regular updates from the
Company Secretary and the Director of People and Sustainability. During the year this included updates on discussions
with the SLT on the proposed changes to the Directors’ Remuneration Policy and how these changes would apply more
widely to other employees.

Non-Executive Directors’ terms of appointment

Non-Executive Director

Phuthuma Nhleko

Martin Greenslade

Sheila Khama

Rebecca Wiles

Mitchell Ingram

Genevieve Sangudi

Roald Goethe

Number of
complete
years on the
Board

Date of
current
engagement
commenced

Year
appointed

Expiry of
current term

2021

2019

2023

2020

2019

2023

25.10.21

01.11.19

24.10.24

31.10.24

26.04.19

26.04.25

28.06.23

27.06.26

09.09.20

09.09.26

26.04.19

24.02.23

25.04.25

23.02.26

In each case, the appointment is renewable thereafter if agreed by the Director and the Board. The appointment of
any Non-Executive Director may be terminated by either party on three months’ notice. There are no arrangements
under which any Non-Executive Director is entitled to receive compensation upon the early termination of his or
her appointment.

Genevieve Sangudi
Chair of the Remuneration Committee
5 March 2024

Tullow Oil plc Annual Report and Accounts 2023 – 113

Strategic report

Corporate governance

Financial statements

Supplementary information

Directors’ report

The Directors present their Annual Report and audited Financial Statements
for the Group for the year ended 31 December 2023. Certain statutory or regulatory
information required to be included in this section is included elsewhere in the
Annual Report (see table below) and is incorporated by reference. The Corporate
Governance Report on pages 68 to 113 is the corporate governance statement for
the purposes of Disclosure Guidance and Transparency Rule 7.2.1.

Information incorporated by reference
The information in the table below is incorporated in the
Directors’ report by reference and can be found on the
pages of this Annual Report as indicated in the table below.

Information

Principal activities

Likely future developments

Page

14 to 16

Our stakeholders and how we engage with them

22 and 23

ESG

Employee involvement and engagement

Diversity

Greenhouse gases

TCFD

Human rights

Anti-bribery and anti-corruption

Derivative financial instruments

Post balance sheet events

26 to 37

23 and 35

38 to 47

35 and 36

61 and 62

Articles of Association
The Company’s Articles were adopted at the 2021 AGM.
They may only be amended by a special resolution of
the shareholders.

Listing of notes
Tullow’s Senior Secured Notes due 2026 and Senior Notes
due 2025 are listed on the Luxembourg Stock Exchange.

Results and dividends
The loss on ordinary activities after taxation of the Group
for the year ended 31 December 2023 was $110 million
(2022: $49 million profit). In 2023 the Board recommended
that no interim and final dividend would be paid.

Share capital
As at 5 March 2024 (being the latest practicable date
before publication of this Annual Report and financial
statements), the Company’s issued share capital
comprised of 1,454,137,162 ordinary shares each with a
nominal value of £0.10.

Substantial shareholdings
As at 31 December 2023 and 5 March 2024 (being the latest
practicable date before publication of this Annual Report
and financial statements), the Company had been notified
in accordance with the requirements of provision 5.1.2 of
the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules of the following significant holdings in
the Company’s ordinary share capital:

Shareholder

% of issued
capital (as at
date of
notification)

Number of
shares

Samuel Dossou-Aworet

243,635,633

16.80%

Azvalor Asset Management
S.G.I.I.C., S.A.

239,327,757

RWC Asset Management LLP

71,022,015

16.47%

5.09%

Summerhill Trust Company
(Isle of Man) Limited

58,838,104

4.19%

Shareholders’ rights
The rights and obligations of shareholders are set out
in the Company’s Articles of Association (which can be
amended by special resolution). The rights and obligations
attaching to the Company’s shares are as follows:

• Dividend rights – holders of the Company’s shares
may, by ordinary resolution, declare dividends but
may not declare dividends in excess of the amount
recommended by the Directors. The Directors may also
pay interim dividends. No dividend may be paid other
than out of profits available for distribution. Subject
to shareholder approval, payment or satisfaction of a
dividend may be made wholly or partly by distribution of
specific assets.

114 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

• Voting rights – voting at any general meeting may be
conducted by a show of hands unless a poll is duly
demanded. On a show of hands every shareholder who is
present in person at a general meeting (and every proxy or
corporate representative appointed by a shareholder and
present at a general meeting) has one vote regardless of the
number of shares held by the shareholder (or represented
by the proxy or corporate representative). If a proxy has been
appointed by more than one shareholder and has been
instructed by one or more of those shareholders to vote ‘for’
the resolution and by one or more of those shareholders to
vote ‘against’ a particular resolution, the proxy shall have one
vote for and one vote against that resolution. On a poll, every
shareholder who is present in person has one vote for every
share held by that shareholder and a proxy has one vote
for every share in respect of which he has been appointed
as proxy (the deadline for exercising voting rights by proxy
is set out in the form of proxy). On a poll, a corporate
representative may exercise all the powers of the Company
that has authorised him.

• A poll may be demanded by any of the following: (a) the
Chairman of the meeting; (b) at least five shareholders
entitled to vote and present in person or by proxy or
represented by a duly authorised corporate representative
at the meeting; (c) any shareholder or shareholders
present in person or by proxy or represented by a duly
authorised corporate representative and holding shares
or being a representative in respect of a holder of shares
representing in the aggregate not less than one-tenth
of the total voting rights of all shareholders entitled to
attend and vote at the meeting; or (d) any shareholder
or shareholders present in person or by proxy or
represented by a duly authorised corporate representative
and holding shares or being a representative in respect
of a holder of shares conferring a right to attend and vote
at the meeting on which there have been paid up sums in
the aggregate equal to not less than one-tenth of the total
sums paid up on all the shares conferring that right.

• Return of capital – in the event of the liquidation of the

Company, after payment of all liabilities and deductions
taking priority, the balance of assets available for distribution
will be distributed among the holders of ordinary shares
according to the amounts paid up on the shares held
by them. A liquidator may, with the authority of a special
resolution, divide among the shareholders the whole or any
part of the Company’s assets, or vest the Company’s assets
in whole or in part in trustees upon such trusts for the benefit
of shareholders, but no shareholder is compelled to accept
any property in respect of which there is a liability.

• Control rights under employee share schemes – the
Company operates a number of employee share
schemes (see pages 97 and 107). Under some of these
arrangements, shares are held by trustees on behalf of
employees. The employees are not entitled to exercise
directly any voting or other control rights. The trustees
will generally vote in accordance with employees’
instructions and abstain where no instructions are
received. Unallocated shares are generally voted at the
discretion of the trustees.

• Restrictions on holding securities – there are no

restrictions under the Company’s Articles of Association
or under UK law that either restrict the rights of UK
resident shareholders to hold shares or limit the rights of
non-resident or foreign shareholders to hold or vote the
Company’s ordinary shares.

There are no UK foreign exchange control restrictions on
the payment of dividends to US persons on the Company’s
ordinary shares.

Material agreements containing ‘change
of control’ provisions
The following significant agreements will, in the event of a
‘change of control’ of the Company, be affected as follows:

• To the extent that a ‘change of control’ occurs, as a result
of: (i) a disposal of all or substantially all the properties or
assets of the Company and all its restricted subsidiaries
(other than through a merger or consolidation) in one or
a series of related transactions; (ii) a plan being adopted
relating to the liquidation or dissolution of the Company;
or (iii) any person becoming the beneficial owner,
directly or indirectly, of shares of the Company which
grant that person more than 50% of the voting rights of
the Company.

• Under the $600 million senior secured revolving facility

agreement between, among others, the Company
and certain subsidiaries of the Company, ABSA Bank,
Barclays, BNP Paribas, DNB (UK), JP Morgan, ING
Belgium, Nedbank, Standard Chartered Bank, Standard
Bank of South Africa, Glas Trust Corporation and the
lenders specified therein, the Company is obliged to
notify the agent (who notifies the lenders) upon the
occurrence of a change of control. Each lender shall
be entitled to repayment of all outstanding amounts
owed by the Company and certain subsidiaries of
the Company to it under the agreement and any
connected finance document. Each lender shall be
entitled to cancel its commitments immediately under
the agreement. So long as such lender states its
requirement to be repaid within 30 days of being notified
by the agent, the repayment amount will become due
and payable by no later than 30 days after the agent has
notified the Company to request such payments.

• Under an Indenture relating to $1.8 billion of 10.25%
senior secured notes due in 2026 between, among
others, the Company, certain subsidiaries of the
Company and Deutsche Trustee Company Limited
as the Trustee, the Company must make an offer to
noteholders to repurchase all or any part of the notes
at 101% of the aggregate principal amount of the
notes, plus accrued and unpaid interest on the notes
repurchased to the date of purchase in the event
that a change of control of the Company occurs. The
repurchase offer must be made by the Company to
all noteholders within 30 days following the change of
control and the repurchase must take place no earlier
than 10 days and no later than 60 days from the date of
the repurchase offer.

Tullow Oil plc Annual Report and Accounts 2023 – 115

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Financial statements

Supplementary information

Directors’ report continued

Material agreements containing ‘change
of control’ provisions continued
• Relating to $800 million of 7% Senior Notes due in

2025 between, among others, the Company, certain
subsidiaries of the Company and Deutsche Trustee
Company Limited as the Trustee, the Company must
make an offer to noteholders to repurchase all the
notes at 101% of the aggregate principal amount of the
notes, plus accrued and unpaid interest in the event
that a change of control of the Company occurs. The
repurchase offer must be made by the Company to
all noteholders within 30 days following the change of
control and the repurchase must take place no earlier
than 10 days and no later than 60 days from the date the
repurchase offer is made. Each noteholder may take up
the offer in respect of all or part of its notes.

• Under the $400 million note subscription agreement
between, amongst others, the Company, Glencore,
Glas Trust Corporation and Law Debenture, the
Company is obliged to notify the agent (who notifies
the noteholders) upon the occurrence of a change of
control. Each noteholder shall be entitled to repayment
of all outstanding amounts owed by the Company to
it under the agreement and any connected finance
document. Each noteholder shall also be entitled to
cancel any undrawn commitments immediately under
the agreement. In order to give effect to the noteholder’s
request for repayment, they are to notify the Company
within 30 days of being notified by the agent, following
which the repayment amount will become due and
payable no later than 30 days after such notice to
the Company.

Directors
In accordance with the provisions of the Code, all
Directors eligible for re-election should retire at each
AGM and offer themselves for election or re-election (as
appropriate). Accordingly, all Directors will retire and seek
election or re-election at the AGM, anticipated to be held
on 16 May 2024. The Board believes that all Directors
offering themselves for election or re-election continue
to be effective and demonstrate commitment to the
role. The names and biographies of our current Directors
are included on pages 70 and 71 and the names of the
Directors that retired during the year are set out on page 5.

Details of the Directors’ interests in the ordinary shares of
the Company and in the Group’s long-term incentive and
other share option schemes are set out on page 101 in the
Directors’ Remuneration report.

116 – Tullow Oil plc Annual Report and Accounts 2023

Directors’ indemnities and insurance cover
As at the date of this report, indemnities are in force
under which the Company has agreed to indemnify the
Directors, to the extent permitted by the Companies
Act 2006, against claims from third parties in respect
of certain liabilities arising out of, or in connection with,
the execution of their powers, duties and responsibilities
as Directors of the Company or any of its subsidiaries.
The Directors are also indemnified against the cost
of defending a criminal prosecution or a claim by the
Company, its subsidiaries or a regulator provided that
where the defence is unsuccessful the Director must
repay those defence costs. The Company also maintains
directors’ and officers’ liability insurance cover, the level of
which is reviewed annually.

Powers of Directors
The general powers of the Directors are set out in Article 104
of the Articles of Association of the Company. It provides
that the business of the Company shall be managed by the
Board which may exercise all the powers of the Company
whether relating to the management of the business of the
Company or not. This power is subject to any limitations
imposed on the Company by applicable legislation. It is also
limited by the provisions of the Articles of Association of the
Company and any directions given by special resolution of
the shareholders of the Company which are applicable on
the date that any power is exercised.

Please note the following specific provisions relevant to
the exercise of power by the Directors:

• Pre-emptive rights and new issues of shares – the

holders of ordinary shares have no pre-emptive rights
under the Articles of Association of the Company.
However, the ability of the Directors to cause the
Company to issue shares, securities convertible into
shares or rights to shares, otherwise than pursuant to
an employee share scheme, is restricted under the
Companies Act 2006 which provides that the directors
of a company are, with certain exceptions, unable to
allot any equity securities without express authorisation,
which may be contained in a company’s articles of
association or given by its shareholders in general
meeting, but which in either event cannot last for more
than five years. Under the Companies Act 2006, the
Company may also not allot shares for cash (otherwise
than pursuant to an employee share scheme) without
first making an offer on a pre-emptive basis to existing
shareholders, unless this requirement is waived by a
special resolution of the shareholders.

• Borrowing powers – the net external borrowings of

the Group outstanding at any time shall not exceed an
amount equal to four times the aggregate of the Group’s
adjusted capital and reserves calculated in the manner
prescribed in Article 105 of the Company’s Articles of
Association, unless sanctioned by an ordinary resolution
of the Company’s shareholders.

Strategic report

Corporate governance

Financial statements

Supplementary information

Appointment and replacement of Directors
The Company shall appoint (disregarding Alternate
Directors) no fewer than two and no more than 15
Directors. The appointment and replacement of Directors
may be made as follows:

• The shareholders may by ordinary resolution elect any

person who is willing to act to be a Director.

• The Board may elect any person who is willing to act to

be a Director. Any Director so appointed shall hold office
only until the next Annual General Meeting and shall
then be eligible for election.

• Each Director is required in terms of the Articles of
Association to retire from office at the third Annual
General Meeting after the Annual General Meeting at
which he or she was last elected or re-elected, although
he or she may be re-elected by ordinary resolution
if eligible and willing. However, to comply with the
principles of best corporate governance, the Board
intends that each Director will submit him or herself for
re-election on an annual basis.

• The Company may by special resolution remove any
Director before the expiration of his or her period of
office or may, by ordinary resolution, remove a Director
where special notice has been given and the necessary
statutory procedures are complied with.

• There are a number of other grounds on which
a Director’s office may cease, namely voluntary
resignation, where all the other Directors (being at least
three in number) request his or her resignation, where
he or she suffers physical or mental incapacity, where
he or she is absent from meetings of the Board without
permission of the Board for six consecutive months,
becomes bankrupt or compounds with his or her
creditors or where he or she is prohibited by law from
being a Director.

Authority to allot new shares
At the Company’s AGM on 24 May 2023, shareholders
authorised the Directors, by way of ordinary resolution, to
allot new equity securities up to a maximum aggregate
value of £48, 228,412, being approximately one-third of the
issued share capital of the Company as at 17 April 2023.

The authority conferred at the 2023 AGM will expire at
the close of the Company’s AGM in 2024 or the close of
business on 30 June 2024 (whichever is earlier). At the
2024 AGM, shareholders will be requested to renew this
authority. Save for the allotment of shares in respect of the
Group’s employee share schemes, the Directors have no
current intention to exercise this authority.

Purchase of own shares
At the Company’s AGM on 24 May 2023 shareholders
authorised the Company by way of special resolution, to
make market purchases of a maximum of 144,685,380 of
the Company’s ordinary shares (being 10% of the issued
share capital of the Company) as at 17 April 2023 at certain

minimum and maximum prices specified in the resolution.
The authority conferred at the 2023 AGM will expire at
the close of the Company’s AGM in 2024 or the close of
business on 30 June 2024 (whichever is earlier).

After careful consideration, including considering the
views expressed by shareholders, the Directors have
decided not to seek authority to make market purchases
of the Company’s own shares. Although, not anticipated,
should the Company require to make market purchases of
its own shares, a separate general meeting would be called
at which the authority to purchase the Company’s own
share would be sought from shareholders.

Political donations
In line with Group policy, no donations were made for
political purposes.

Auditor and disclosure of relevant
audit information
Having made the requisite enquiries, so far as the Directors
are aware, there is no relevant audit information (as defined
by section 418(3) of the Companies Act 2006) of which the
Company’s auditor is unaware and each Director has taken
all steps that ought to have been taken to make him or herself
aware of any relevant audit information and to establish that
the Company’s auditor is aware of that information.

A resolution to re-appoint EY as the Company’s auditor will
be proposed at the 2024 AGM on 16 May 2024. Further
information can be found in the Audit Committee Report
on pages 85.

Annual General Meeting
It is anticipated that the AGM of Tullow will be held at
9 Chiswick Park 566 Chiswick High Road W4 5XT on
16 May 2024, at 11.00 am.

The Notice convening the AGM and detailing the resolutions
to be put to shareholders at the meeting, will be sent to
shareholders together with this Annual Report and Accounts
and published on our website at www.tullowoil.com.

This Corporate Governance report (which includes the
Directors’ Remuneration report) and the information
referred to herein have been approved by the Board and
signed on its behalf by:

Adam Holland
Company Secretary
5 March 2024

Registered office:
9 Chiswick Park
566 Chiswick High Road
London W4 5XT

Company registered in England and Wales No. 3919249

Tullow Oil plc Annual Report and Accounts 2023 – 117

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Financial statements

Supplementary information

Statement of Directors’ responsibilities

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s and Group’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and the Group and enable them to ensure
that the Company and the Group Financial Statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group
and Parent Company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.

Under applicable law and regulations, the Directors are
also responsible for preparing a strategic report, Directors’
report, Directors’ remuneration report and corporate
governance statement that comply with that law and
those regulations. The Directors are responsible for the
maintenance and integrity of the corporate and financial
information included on the Company’s website.

Directors’ responsibility statement (DTR 4.1
and the Transparency (Directive 2004/109/
EC) Regulations (as amended))
The Directors confirm, to the best of their knowledge:

• that the consolidated Financial Statements, prepared in
accordance with UK-adopted international accounting
standards and IFRSs adopted pursuant to Regulation
(EC) No. 1606/2002 as it applies in the European Union;

• give a true and fair view of the assets, liabilities,

financial position and profit of the Parent Company
and undertakings included in the consolidation taken
as a whole;

• that the Annual Report, including the Strategic

Report, includes a fair review of the development
and performance of the business and the position
of the Company and undertakings included in the
consolidation taken as a whole, together with a
description of the principal risks and uncertainties that
they face; and

• that they consider the Annual Report, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position, performance, business model
and strategy.

Rahul Dhir
Chief Executive Officer
5 March 2024

The Directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable United Kingdom law and regulations.

Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the
Directors have elected to prepare the Group and Parent
Company financial statements in accordance with UK-
adopted international accounting standards (IFRSs), and the
Parent Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable
law), including Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101). Under company law the
Directors must not approve the Financial Statements unless
they are satisfied that they give a true and fair view of the
state of affairs of the Group and the Company and of the
profit or loss of the Group and the Company for that period.

Under the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules and the Transparency
(Directive 2004/109/EC) Regulations 207 (as amended),
Group Financial Statements are required to be prepared
in accordance with UK-adopted international accounting
standards and international Financial Reporting Standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it
applies in the European Union.

In preparing these Financial Statements the Directors are
required to:

• select suitable accounting policies in accordance with
IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors and then apply them consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;

• provide additional disclosures when compliance with the

specific requirements in IFRSs and in respect of the Parent
Company Financial Statements, FRS 101 is insufficient
to enable users to understand the impact of particular
transactions, other events and conditions on the Group
and Company financial position and financial performance;

• in respect of the Group Financial Statements, state

whether UK-adopted international accounting standards
and IFRSs adopted pursuant to Regulation (EC) No.
1606/2002 as it applies in the European Union have
been followed, subject to any material departures
disclosed and explained in the Financial Statements;

• in respect of the Parent Company Financial Statements,
state whether applicable UK Accounting Standards,
including FRS 101, have been followed, subject to any
material departures disclosed and explained in the
Financial Statements; and

• prepare the Financial Statements on the going concern

basis unless it is inappropriate to presume that the
Company and/or the Group will continue in business.

118 – Tullow Oil plc Annual Report and Accounts 2023

Financial statements

Financial
statements

120

Independent auditor’s report to the members of
Tullow Oil plc

130 Group financial statements

179

Company financial statements

Supplementary information

189

191

Alternative performance measures

Commercial reserves and contingent resources
summary (unaudited) working interest basis

192

Shareholder information

Tullow Oil plc Annual Report and Accounts 2023 – 119

Supplementary informationStrategic reportCorporate governanceStrategic report

Corporate governance

Financial statements

Supplementary information

Independent auditor’s report to the members of Tullow Oil plc

Opinion

In our opinion:

• Tullow Oil plc’s group financial statements and parent company financial statements (the “financial statements”) give
a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the
group’s loss for the year then ended;

• the group financial statements have been properly prepared in accordance with UK adopted international accounting
standards and International Financial Reporting Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it
applies in the European Union;

• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally

Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Tullow Oil plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the
year ended 31 December 2023 which comprise:

Group

Parent company

Group balance sheet as at 31 December 2023

Company balance sheet as at 31 December 2023

Group income statement for the year then ended

Company statement of changes in equity for the year
then ended

Group statement of comprehensive income for the
year then ended

Related notes 1 to 7 to the financial statements including
material accounting policy information

Group statement of changes in equity for the year then ended

Group cash flow statement for the year then ended

Related notes 1 to 30 to the financial statements, including
material accounting policy information.

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable
law and UK adopted international accounting standards and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union. The financial reporting framework that
has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice).

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Independence
We are independent of the group and parent in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company
and we remain independent of the group and the parent company in conducting the audit.

120 – Tullow Oil plc Annual Report and Accounts 2023

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Supplementary information

Our key observations
In forming our conclusions, we have considered the
generation of free cash flow and available liquidity that
supports the repayment of 2025 bonds. With maturities of
the 2026 bonds in May 2026 and tax arbitration hearings
scheduled for 2025, we consider the management’s
going concern period of 12 months to be reasonable.
We consider the downside case is sufficiently severe
and appropriately reflects potential outflows in respect
of ongoing arbitrations. Under management’s reverse
stress test, at an oil price of $45/bbl throughout the going
concern period, the liquidity becomes negative. Based on
the current oil price and forward curve we consider the
likelihood of occurrence of this scenario to be remote.

Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group and parent company’s
ability to continue as a going concern for a period up to
March 2025.

In relation to the group and parent company’s reporting
on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention
to in relation to the directors’ statement in the financial
statements about whether the directors considered
it appropriate to adopt the going concern basis of
accounting.

Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report. However, because
not all future events or conditions can be predicted, this
statement is not a guarantee as to the group’s ability to
continue as a going concern.

Conclusions relating to going concern
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate. Our evaluation of the directors’ assessment
of the group and parent company’s ability to continue to
adopt the going concern basis of accounting included:

• evaluating whether management’s going concern
period, of 12 months from signing of the financial
statements, was appropriate;

• assessing the reasonableness of management’s oil price

assumptions by comparing it with forward curves;

• with the assistance of our business modelling

specialists, reviewing the integrity of management’s
going concern model by checking consistency of the
assumptions and formulae;

• comparing the forecasted cash expenditure

incorporated in the model with the board approved
budget to ensure consistency;

• assessing historical forecasting accuracy through

comparing forecast versus actual;

• checking that the cash flows assumptions used in

the going concern model were consistent with those
used for impairment testing purposes, including
decarbonisation costs, and evaluating the differences for
appropriateness;

• ensuring assumptions, such as hedging, provision

utilisation and decommissioning escrow payments, were
consistent with other areas of our audit;

• assessing whether the assumptions in the

management’s downside scenario were plausible and
sufficiently severe;

• verifying managements plan in relation to repayment of
the remaining outstanding 2025 bonds and assessing
whether there is sufficient liquidity at the end of going
concern period, after their repayment;

• obtaining an understanding of ongoing litigations and
identifying cases, in particular those mentioned in
the accounting policies note section (af), where the
outcome is expected within the going concern period.
We then evaluated whether management’s downside
case sufficiently captured potential outflows in relation
to these cases;

• evaluating management’s reverse stress test to

determine the oil price at which liquidity becomes
negative and assessing the likelihood of its occurrence;

• confirming that the forecast decarbonisation costs were

included in the model; and

• reviewing management’s proposed disclosures to
ensure that they were appropriate and met current
accounting requirements.

Tullow Oil plc Annual Report and Accounts 2023 – 121

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Financial statements

Supplementary information

Independent auditor’s report to the members of Tullow Oil plc continued

Overview of our audit approach

Audit scope

• We performed an audit of the complete financial information of 4 components and audit

procedures on specific balances for a further 7 components.

• The components where we performed full or specific audit procedures accounted for

100% of adjusted Earnings before Interest Tax Depreciation Amortisation and Exploration
(‘Adjusted EBITDAX’), 100% of Revenue and 90% of Total assets.

Key audit matters

• Recoverability of Kenya intangible exploration and evaluation asset

• Uncertain Tax Treatments

• Recoverability of Property plant and equipment

Materiality

• Overall Group materiality of $29.4m which represents 2.6% Adjusted EBITDAX.

An overview of the scope of the parent
company and group audits

Tailoring the scope
Our assessment of audit risk, our evaluation of materiality
and our allocation of performance materiality determine
our audit scope for each company within the Group.
Taken together, this enables us to form an opinion on
the consolidated financial statements. We take into
account size, risk profile, the organisation of the group
and effectiveness of group-wide controls, changes in the
business environment, the potential impact of climate
change and other factors such as recent Internal audit
results when assessing the level of work to be performed
at each company.

In assessing the risk of material misstatement to the Group
financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the
financial statements, of the 41 reporting components of
the Group, we selected 11 components covering entities
within Cote D’Ivoire, Gabon, Ghana, Kenya and the United
Kingdom, which represent the principal business units
within the Group.

Of the 11 components selected, we performed an audit
of the complete financial information of 4 components
(“full scope components”) which were selected based
on their size or risk characteristics. For the remaining
7 components (“specific scope components”), we
performed audit procedures on specific accounts within

that component that we considered had the potential
for the greatest impact on the significant accounts in the
financial statements either because of the size of these
accounts or their risk profile.

The reporting components where we performed full or
specific audit procedures accounted for 101% (2022: 97%)
of the Group’s Adjusted EBITDAX, 100% (2022: 97%) of the
Group’s Revenue and 90% (2022: 90%) of the Group’s Total
assets. For the current year, the full scope components
contributed 104% (2022: 103%) of the Group’s Adjusted
EBITDAX, 98% (2022: 99%) of the Group’s Revenue and
83% (2022: 83%) of the Group’s Total assets. The specific
scope components contributed -3% (2022: -6%) of the
Group’s Adjusted EBITDAX, 2% (2022: -2%) of the Group’s
Revenue and 7% (2022: 7%) of the Group’s Total assets. The
audit scope of these components may not have included
testing of all significant accounts of the component
but will have contributed to the coverage of significant
accounts tested for the Group. We also performed
specified procedures over certain aspects of Cash and
Cash Equivalents and Finance Revenue in one location.

Of the remaining 30 components that together represent
0% of the Group’s Adjusted EBITDAX, none are individually
greater than 1% of the Group’s Adjusted EBITDAX. For
these components, we performed other procedures,
including analytical review, testing of consolidation
journals and intercompany eliminations to respond to
any potential risks of material misstatement to the Group
financial statements.

The charts below illustrate the coverage obtained from the work performed by our audit team.

Adjusted EBITDAX

Revenue

Total assets

104% Full scope components
(3)% Specific scope components
(1)% Other procedures

98% Full scope components
2% Specific scope components
0% Other procedures

83% Full scope components
7% Specific scope components
10% Other procedures

122 – Tullow Oil plc Annual Report and Accounts 2023

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Corporate governance

Financial statements

Supplementary information

Changes from the prior year
There were no changes to our full scope components in
the current year. For other scopes, we have updated our
assessment this year to exclude three exploration entities
that are no longer material, primarily due to exploration
cost write-offs in 2022. These changes had limited impact
on coverage.

In line with our approach from the previous year, audit
work for the Ghana component, which covers 2 full scope
components, has been performed by an integrated
primary audit team comprising of team members from EY
UK and EY Ghana and led by the Senior Statutory Auditor.

During the current year’s audit cycle, visits were
undertaken by the Group audit team to Ghana in July
2023, November 2023 and January 2024. These visits
involved meetings with local management, including
members of finance, legal and commercial teams. We
held discussions on the audit approach, reviewed working
papers to validate that the required procedures have
been performed and discussed the issues arising in the
component audit.

All audit work performed for the purposes of the audit was
undertaken by the Group audit team.

Climate change
Stakeholders are increasingly interested in how climate
change will impact Tullow Oil Plc. The Group has
determined that the most significant future impacts from
climate change on their operations will be from potential
fall in oil prices, carbon pricing mechanisms, accessibility
to debt and equity funding and ability to retain employee
and stakeholder confidence in their commitments.
These are explained on pages 38 to 47 in the Task Force
for Climate related Financial Disclosures and on pages
52 to 56 in the principal risks and uncertainties. They
have also explained their climate commitments on
page 33. All of these disclosures form part of the “Other
information”, rather than the audited financial statements.
Our procedures on these unaudited disclosures
therefore consisted solely of considering whether they
are materially inconsistent with the financial statements,
or our knowledge obtained in the course of the audit or
otherwise appear to be materially misstated, in line with
our responsibilities on “Other information”.

In planning and performing our audit we assessed the
potential impacts of climate change on the Group’s
business and any consequential material impact on its
financial statements.

The group has explained in note 25 how they have
reflected the impact of climate change in their financial
statements, including how this aligns with their
commitment to being Net Zero by 2030 on Scope 1 and
Scope 2 GHG emissions on a net equity basis supporting
the goal of limiting global temperature rise to well below
2o C as per Article 2 of the Paris Agreement. Significant
judgements and estimates relating to climate change are
included in note 25. These disclosures also explain where
governmental and societal responses to climate change
risks are still developing, and where the degree of certainty

of these changes means that they cannot be taken into
account when determining asset and liability valuations
under the requirements of UK adopted international
accounting standards and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No. 1606/2002 as it applies in the European Union. In note
25 to the financial statements supplementary sensitivity
disclosures of the impact of changes in oil price under IEA
scenario-Net Zero Emission by 2050 have been provided.

Our audit effort in considering the impact of climate
change on the financial statements was focused on
evaluating management’s assessment of the impact
of climate risk, physical and transition, their climate
commitments, the effects of material climate risks
disclosed on pages 38 to 47 and the significant
judgements and estimates disclosed in note 25 and
whether these have been appropriately reflected in oil and
gas asset values where these are impacted by future cash
flows and associated sensitivity disclosures (see note 25),
and in the timing and nature of decommissioning liabilities
recognised, (see note 25), following the requirements
of UK adopted international accounting standards and
International Financial Reporting Standards adopted
pursuant to Regulation (EC) No. 1606/2002 as it applies
in the European Union. As part of this evaluation, we
performed our own risk assessment, supported by
our climate change internal specialists. This included
making inquiries of the Head of Sustainability and Group
Finance teams, and a review of peer disclosures and
sector guidance on climate change and energy transition
to determine the risks of material misstatement in the
financial statements from climate change which needed to
be considered in our audit.

We also challenged the Directors’ considerations of
climate change risks in their assessment of going
concern and viability and associated disclosures. Where
considerations of climate change were relevant to our
assessment of going concern, these are described above.

Based on our work, whilst we have not identified the
impact of climate change on the financial statements to
be a standalone key audit matter, we have considered the
impact on the following key audit matters: Recoverability
of Kenya Intangible Exploration and Evaluation Asset
(‘E&E’) and Recoverability of Property, Plant and Equipment
(‘PP&E’). Details of the impact, our procedures and findings
are included in our explanation of key audit matters below.

Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on
these matters.

Tullow Oil plc Annual Report and Accounts 2023 – 123

Strategic report

Corporate governance

Financial statements

Supplementary information

Independent auditor’s report to the members of Tullow Oil plc continued

Key observations communicated
to the Audit Committee

We consider it is reasonable
that Tullow is entitled to 100%
of the economic interest in the
Kenya JV as at 31 December
2023, as the JV partners have
issued withdrawal notices
and public statements which
are considered irrevocable as
per the Kenya Joint Operating
Agreement.

We consider acceptable
the judgements used by
management in calculating
a gross NPV and then
applying probabilities to
reflect the remaining project
uncertainties to calculate the
recoverable amount.

On sensitivity disclosures,
management has appropriately
calculated and disclosed the
impact on the value of the
Kenya asset under the IEA’s
NZE scenario.

Key audit matters continued

Risk

Our response to the risk

Recoverability of Kenya
Intangible Exploration and
Evaluation Asset (‘E&E’)
This is an estimate based on
uncertain outcomes. The
recoverability of the Kenya E&E asset
of $242.2m carries inherent risks
that the project does not progress to
development, requiring the write-
off or impairment of the related
capitalised costs, when the relevant
IFRS requirements are met.

Refer to the Audit Committee Report
(page 82); Accounting policies (page
142); and Note 8 of the Consolidated
Financial Statements (pages 151-153)

Determining the recoverable value of
the Kenya E&E asset is judgemental
given the uncertainties surrounding
the progression of the project to
Final Investment Decision (‘FID’).
Management has performed an
impairment assessment under the
value-in-use (‘VIU’) methodology
where estimates are made for key
inputs including oil prices; discount
rates; production profiles; cost
profiles and fiscal terms.

The VIU recoverable value is risk-
adjusted for uncertainties associated
with the Group’s ability to recover
the value of the asset. These
uncertainties include the ability to
secure a strategic partner through a
farm down, obtaining government
deliverables (for example access to
land and water and improved fiscal
terms), and arranging financing to
develop the asset, which represent a
source of potential management bias.

As a result of these factors, there
is significant judgement relating to
the Kenya E&E asset and whether an
impairment or impairment reversal
is required at year end. As disclosed
in Note 8, changes in significant
assumptions can result in a material
impairment charge, or impairment
reversal. An impairment of $17.9m has
been recorded in the current year.

Our procedures included, amongst others:

• confirmed our understanding of Tullow’s

impairment testing process, as well as the control
environment implemented by management by
performing a walkthrough of the process;

• read the Kenya Joint Operating Agreement and
communication with the Government of Kenya
(GoK) to confirm that the transfer of interest is
unconditional and irrevocable, and effective from
30 June 2023;

• performed press searches to corroborate

management’s judgement that the other JV
partners have permanently withdrawn;

• evaluated the professional qualifications and objectivity
of management’s external experts who performed the
detailed preparation of the resources estimates in 2021.
With no material changes to the development plan, we
consider it appropriate for management to continue to
rely on the 2021 report for oil and gas resources
estimates;

• reconciled the oil and gas resources and cost

estimates used in the impairment model to the
resources report produced by the Management’s
external expert and Field Development Plan (FDP)
submitted to the GoK;

• engaged our valuation specialists to test the

mathematical accuracy and formulae integrity of
management’s model;

• evaluated the appropriateness of management’s
discount rate for Kenya based on an independent
re-calculation of the discount rate including an
assessment of country specific risks;

• compared Tullow’s commodity price scenarios to
assessments provided by our valuation specialists
and to prices used by peer companies. We also
compared Tullow’s prices to the IEA’s Net Zero
Emissions 2050 (NZE) and to the Announced
Pledges Scenario (APS) price assumptions as
potential contradictory evidence for estimates of
future oil prices;

• sensitised the valuation based on significant

assumptions, such as oil price and discount rate,
and audited sensitivities performed by Tullow,
including using the IEA’s Net Zero Emissions oil
price forecast post-2030;

• engaged our valuation specialists to evaluate
management’s probabilistic methodology for
reflecting uncertainties associated with the project
to derive risk-adjusted recoverable value;

124 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Key audit matters continued

Risk

Our response to the risk

Key observations communicated
to the Audit Committee

Recoverability of Kenya
Intangible Exploration and
Evaluation Asset (‘E&E’)
continued
We consider that the risk associated
with this key audit matter has
increased compared to the previous
year following withdrawal of the other
JV Partners from the Kenya Joint
Venture and transfer of their equity
interest to Tullow. This withdrawal
and transfer of interest is subject to
the Government of Kenya’s consent
which is yet to be received as of the
date of our report. Management has
applied judgement in determining
Tullow has acquired the 50%
additional interest during the year.

Uncertain Tax Treatments
This is an estimate based on
uncertain outcomes. The risk is that
tax provisions are not appropriate
given the nature of the tax matter.

Refer to the Audit Committee Report
(page 82); Accounting policies
(pages 143-144); and Note 6 of the
Consolidated Financial Statements
(pages 149-150)

Uncertain tax treatments involve
judgement as to whether a matter
is a provision or a contingent
liability and there is subjectivity in
determining whether any estimated
provision is appropriate. This requires
significant judgement, including
evaluating the outcome of the tax
matter, the timescale for resolution
and the need to negotiate with
various stakeholders. Furthermore,
the outcome of the tax matter
in most instances is outside of
Tullow’s control.

As described in the Accounting
Policies note section (af) of
the accounting policies to the
Consolidated Financial Statements
Tullow has three ongoing arbitrations
with Ghana Revenue Authority
amounting to $707 million. Our
procedures were focused on these
three matters. Outcomes not in
Management’s favour, that are not
provided for appropriately, could
result in material charges through the
Group’s profit and loss once settled.

• assessed the appropriateness of the probabilistic
assessment used to adjust for the uncertainties in
computing the recoverable amount of the asset by
independently evaluating each uncertainty’s facts
and circumstances through inspection of
supporting evidence including communications
with a potential farm down partner and the GoK
and discussions with management outside of the
finance function;

• evaluated management’s impact assessment of

potential physical risks arising from climate change
and carbon intensity of the project and whether this
may impact the chances of development; and

• assessing whether the disclosures provided in the

financial statements reflect management’s
judgements, risks and uncertainties of the project.

The audit procedures were performed by the
group audit team with the assistance of valuation
specialists. Our audit procedures over this risk area
covers 100% of the reported risk amount.

Our procedures included, amongst others:

• confirmed our understanding of Tullow’s taxation

process, as well as the control environment
implemented by management by performing a
walkthrough of the process;

• obtained and read the correspondence with
tax authorities and when required used our
local audit teams and tax specialists to assess
management’s assumptions and judgements
regarding the level of provisions made;

• inspected external legal and tax opinions,

where considered necessary, to corroborate
management’s assessment of the risk profile in
respect of the tax claims;

• evaluated the professional qualifications and
objectivity of management’s external experts;

• discussed the likelihood and quantum of any

potential settlement with management outside
the finance/tax function including the General
Counsel, CEO and Chair;

• Reviewed publicly available information

regarding other significant tax claims against
multi-nationals in Ghana, in particular MTN,
to understand the basis of the claim and
the outcome;

• obtained direct confirmation from external
legal counsel to corroborate the status and
management position for material litigations;

• obtained Tullow’s uncertain tax treatment
assessments and audited the associated
workings, including assessing any exposures
and provisions were appropriately extrapolated
for periods which have yet to be assessed by tax
authorities; and

Based on the evidence
obtained and audit
procedures performed,
including inspecting external
legal and tax opinions, we are
satisfied that the accounting
treatment and disclosures
in respect of litigations and
uncertain tax treatments is
appropriate.

We also concluded that the
disclosures made in the
financial statements are
appropriate.

Tullow Oil plc Annual Report and Accounts 2023 – 125

Strategic report

Corporate governance

Financial statements

Supplementary information

Independent auditor’s report to the members of Tullow Oil plc continued

Key audit matters continued

Risk

Our response to the risk

Key observations communicated
to the Audit Committee

We reported to the Audit
Committee that, based on
our testing performed and
the subsequent adjustments
made by management,
we considered the current
period impairment charge is
fairly stated.

We also reported that
management had
appropriately included costs
for decarbonisation projects
identified within the Ghana
asset impairment models.

On sensitivity disclosures,
management appropriately
disclosed the impact on the
value of PP&E under the IEA’s
NZE scenario.

Uncertain Tax Treatments
continued
We consider that the risk associated
with this key audit matter has
increased compared to the previous
year given the outcome of one
arbitration will be known within the
going concern period.

Recoverability of Property,
Plant and Equipment
(‘PP&E’)
This is a forecast-based estimate.
The risk is that potential impairments
are not identified on a timely basis.
The risk is similar to 2022 given the
reduction in TEN reserves offset by
an increase in the long-term oil price
assumption of $5/bbl.

Refer to the Audit Committee report
(page 82); Accounting policies
(pages 142-143); and Note 9 of the
Consolidated Financial Statements
(pages 153-155))

Auditing the impairment of PP&E
involves estimation of key inputs
in particular commodity price
assumptions and discount rates.
Changes to any of these key inputs
could lead to a further impairment
or a reversal of impairment, hence
this is considered a key audit
matter. Following the identification
of indicators of impairment in the
TEN CGU and impairment reversals
for the Group’s remaining CGUs,
the carrying values were tested for
impairment or impairment reversal.
A net impairment of $301.2 million
was recorded.

We consider that the risk associated
with this key audit matter has
remained consistent with the
previous year.

• ensured consistency of assumptions regarding

cash outflows in relation to arbitrations expected
to progress within the going concern period;

• considered the relevant disclosures made

within the financial statements to ensure they
appropriately reflect the facts and circumstances
of the tax litigations and exposures and are in
accordance with the requirements of IAS 37
Provisions, IAS 12 Income Taxes and IFRIC 23
Uncertainty over Income tax treatments.

Our audit responses were performed by the group
audit team, with support from tax specialists in
UK and Ghana. Our audit procedures over this risk
area covers 100% of the reported risk amount.

Our procedures included, amongst others:

• confirmed our understanding of Tullow’s

impairment testing process, as well as the control
environment implemented by management by
performing a walkthrough of the process;

• engaged our valuation specialists to test the

mathematical accuracy and formulae integrity of
management’s model;

• compared Tullow’s commodity price scenarios to
assessments provided by our valuation specialists
and to prices used by peer companies. We also
compared Tullow’s prices to the IEA’s Net Zero
Emissions 2050 (NZE) and to the Announced
Pledges Scenario (APS) price assumptions
as potential contradictory evidence for best
estimates of future oil prices;

• assessed the appropriateness of management’s

impairment discount rates including an
independent re-calculation of the discount rate
including an assessment of country specific risks;

• reconciled production and cost profiles used

in the impairment model to the reserves report
produced by management’s external expert;

• evaluated the professional expertise and

objectivity of management’s external experts;

• evaluating the consistency of assumptions used
in the impairment model with other areas of the
audit such as going concern;

• testing whether decarbonisation costs were

incorporated in the models; and

• evaluated management’s impact assessment
of potential physical risks arising from climate
change and whether this may impact the carrying
value of the asset; and

• audited sensitivities performed by Tullow

including using the IEA’s Net Zero Emissions oil
price curve and the IEA’s Announced Pledge
Scenario (APS) price curve.

The audit procedures were performed by our group
engagement team with the assistance of valuation
specialists.

126 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Key audit matters continued
In the prior year, our auditor’s report included key audit
matters in relation to the Fair valuation of additional interest
acquired in Ghana assets and Impairment of Investment in
subsidiaries. Since the acquisition was completed in 2022,
the fair valuation of additional interest acquired in Ghana
assets has not been considered as a key audit matter in
the current year. Furthermore, Impairment of investment in
subsidiaries was identified as a key audit matter following
identification of a prior year error in calculating the
recoverable value of investments. In the current year, this
has not been identified as a key audit matter as no similar
error was identified, resulting in a reduction in executive
involvement and lower allocation of resources.

Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.

Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users
of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.

We determined materiality for the Group to be $29.4 million
(2022: $26.2 million), which is 2.6% (2022: 2.5%) of Adjusted
EBITDAX. Our key criterion in determining materiality remains
our perception of the needs of Tullow’s stakeholders. We
consider which earnings, activity or capital-based measure
aligns best with the expectations of the users of Tullow’s
financial statements. In doing so, we apply a ‘reasonable
investor perspective’, which reflects our understanding of
the common financial information needs of the members of
Tullow as a group. We believe that Adjusted EBITDAX provides
us with the most appropriate measure upon which to calculate
materiality as it represents a key performance indicator used
by Tullow’s investors.

We have excluded non-recurring items such as impairments
of E&E assets and producing oil & gas assets, non-cash
movements in provisions and gain on bond buyback to
ensure we are using a consistent measure representative of
the underlying business. The non-recurring items excluded in
2023 were impairment of E&E assets ($27 million), impairment
of oil and gas assets ($401 million) offset by non-cash
movement in provisions ($22 million) and gain on bond
buyback ($86 million).

For 2023, we have not used a normalised measure based
on our observations of the current year oil prices and
analysis of forecast price curves and noted that oil price
volatility caused by the pandemic and the outbreak of
war in Ukraine 2023 has reduced. Consequently, we have
ceased normalising Adjusted EBITDAX in the current year.

We determined materiality for the Parent Company
to be $36.0 million (2022: $28.2 million), which is 1.4%
(2022: 1.4%) of Net Assets. The basis for calculating Parent
Company materiality has not changed since the prior year.

During the course of our audit, we reassessed initial
materiality and concluded that the Group’s actual
performance in 2023 did not affect our initial materiality.
As such, our materiality was unchanged from planning.

Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds
materiality.

On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment,
our judgement was that performance materiality was 50%
(2023: 50%) of our planning materiality, namely $14.7m
(2022: $13.1m). We have set performance materiality at
this percentage due to our assessment of the nature,
number and impact of the adjusted and unadjusted audit
differences identified in 2022 audit.

Audit work at component locations for the purpose
of obtaining audit coverage over significant financial
statement accounts is undertaken based on a percentage
of total performance materiality. The performance
materiality set for each component is based on the relative
scale and risk of the component to the Group as a whole
and our assessment of the risk of misstatement at that
component. In the current year, the range of performance
materiality allocated to components was $3.7m to $14.7m
(2022: $2.6m to $13.1m).

Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.

We agreed with the Audit Committee that we would
report to them all uncorrected audit differences in excess
of $1.5m (2022: $1.2m), which is set at 5% of planning
materiality, as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both
the quantitative measures of materiality discussed above
and in light of other relevant qualitative considerations in
forming our opinion.

Other information
The other information comprises the information included
in the annual report set out on pages 1 to 118 and 189 to
193, including Strategic report, Corporate Governance
and Supplementary information, other than the financial
statements and our auditor’s report thereon. The directors
are responsible for the other information contained within
the annual report.

Tullow Oil plc Annual Report and Accounts 2023 – 127

Strategic report

Corporate governance

Financial statements

Supplementary information

Independent auditor’s report to the members of Tullow Oil plc continued

Corporate Governance Statement
We have reviewed the directors’ statement in relation to
going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the group
and company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review by
the Listing Rules.

Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements or our knowledge obtained
during the audit:

• Directors’ statement with regards to the appropriateness

of adopting the going concern basis of accounting
and any material uncertainties identified set out on
pages 63 to 64;

• Directors’ explanation as to its assessment of the
company’s prospects, the period this assessment
covers and why the period is appropriate set out on
pages 57 to 58;

• Director’s statement on whether it has a reasonable

expectation that the group will be able to continue in
operation and meets its liabilities set out on page 57;

• Directors’ statement on fair, balanced and

understandable set out on page 118;

• Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out
on page 86;

• The section of the annual report that describes the

review of effectiveness of risk management and internal
control systems set out on pages 85 and 86; and;

• The section describing the work of the audit committee

set out on page 82

Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 118, the directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the directors are
responsible for assessing the group and parent company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative
but to do so.

Other information continued
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form
of assurance conclusion thereon.

Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit
or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required to
report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by
the Companies Act 2006
In our opinion, the part of the directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the
course of the audit:

• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and

• the strategic report and the directors’ report have been

prepared in accordance with applicable legal
requirements.

Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the group
and the parent company and its environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:

• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or

• the parent company financial statements and the part
of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and
returns; or

• certain disclosures of directors’ remuneration specified

by law are not made; or

• we have not received all the information and

explanations we require for our audit.

128 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.

Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect irregularities, including fraud. The risk
of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or
through collusion. The extent to which our procedures
are capable of detecting irregularities, including fraud is
detailed below.

However, the primary responsibility for the prevention
and detection of fraud rests with both those charged with
governance of the company and management.

• We obtained an understanding of the legal and

regulatory frameworks that are applicable to the group
and determined that the most significant are those
that related to the reporting framework (UK-adopted
IAS, IFRS, Companies Act 2006, the UK Corporate
Governance Code and Listing Rules of the UK Listing
Authority) and the relevant tax compliance regulations
in the jurisdictions in which Tullow operates. In addition,
we concluded that there are certain significant
laws and regulations that may have an effect on the
determination of the amounts and disclosures in the
financial statements, relating to health and safety,
employee matters, environmental matters and bribery
and corruption practices.

• We understood how Tullow Oil plc is complying with

those frameworks by making inquiries of management,
internal audit and those responsible for legal and
compliance procedures. We corroborated our enquiries
through review of board minutes, papers provided to
Audit committees and correspondence received from
regulatory bodies.

• We assessed the susceptibility of the group’s financial
statements to material misstatement, including how
fraud might occur by considering the degree of
incentive, opportunity and rationalisation that may
exist within the group. We did this by meeting with
management to gain an understanding of where

there was susceptibility to fraud, how the company is
complying with international tax laws and regulations,
procedures in place to address the risk of bribery and
corruption in high-risk countries. We also performed
procedures around setting key performance indicators
and, alongside our forensics specialists, assessed
whistleblowing incidences for those with a potential
financial reporting impact.

• Based on this understanding we designed our audit

procedures to identify non-compliance with such laws
and regulations. Our procedures involved journal entry
testing, with a focus on journals meeting defined risk
criteria based on our understanding of the business;
inquiries with legal counsel, group management, internal
audit and all full and specific scope management; review
of volume and nature of whistleblowing complaints
received during the year; review of legal expense
accounts; and performance of adverse press searches.

• Based on the results of our audit procedures, and where
instances of potential non-compliance were identified,
we consulted the relevant EY local teams and EY
specialists who aided us in determining sufficient,
and executing appropriate, procedures to respond
to the risk identified.

A further description of our responsibilities for
the audit of the financial statements is located
on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.

Other matters we are required to address
• Following the recommendation from the audit

committee we were appointed by the company on 21
July 2020 to audit the financial statements for the year
ending 31 December 2020 and subsequent financial
periods. The period of total uninterrupted engagement
including previous renewals and reappointments is 4
years, covering the years ending 2020 to 2023.

• The audit opinion is consistent with the additional report

to the audit committee.

Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to them in
an auditor’s 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 and the
company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.

Ernst & Young LLP, Statutory Auditor
London
5 March 2024

Tullow Oil plc Annual Report and Accounts 2023 – 129

Strategic report

Corporate governance

Financial statements

Supplementary information

Group income statement
Year ended 31 December 2023

Continuing activities

Revenue

Cost of sales

Gross profit

Administrative expenses

Gain on bargain purchase

Other gains

Exploration costs written off

Impairment of property, plant and equipment, net

Provisions reversal/(expense)

Operating profit

(Loss)/gain on hedging instruments

Gain on bond buyback

Finance income

Finance costs

Profit from continuing activities before tax

Income tax expense

(Loss)/profit for the year from continuing activities

Attributable to:

Owners of the Company

(Loss)/earnings per ordinary share from continuing activities

Basic

Diluted

Notes

2023
$m

2022
$m

1,634.1

(869.2)

1,783.1

(697.5)

764.9

1,085.6

(56.1)

–

0.2

(27.0)

(408.1)

22.0

295.9

(0.4)

86.0

44.0

(329.6)

95.9

(205.5)

(109.6)

(7.6)

(51.0)

196.8

3.1

(105.2)

(391.2)

(4.2)

733.9

0.8

–

42.9

(335.5)

442.1

(393.0)

49.1

3.4

3.3

Group statement of comprehensive income and expense
Year ended 31 December 2023

(Loss)/ profit for the year

Items that may be reclassified to the income statement in subsequent periods

Cash flow hedges

Gains/(losses) arising in the year

Gains arising in the year – time value

Reclassification adjustments for items included in profit on realisation

Reclassification adjustments for items included in loss on realisation – time value

Exchange differences on translation of foreign operations

Other comprehensive income/(expense)

Tax relating to components of other comprehensive income/(expense)

Net other comprehensive income/(expense) for the year

Total comprehensive income for the year

Attributable to:

Owners of the Company

Notes

2023
$m

(109.6)

2022
$m

49.1

20.1

50.3

111.3

27.8

(5.8)

203.7

–

203.7

94.1

(399.5)

21.7

288.5

30.8

10.2

(48.3)

–

(48.3)

0.8

94.1

0.8

130 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Group balance sheet
As at 31 December 2023

ASSETS

Non-current assets

Intangible exploration and evaluation assets

Property, plant and equipment

Other non-current assets

Deferred tax assets

Current assets

Inventories

Trade receivables

Other current assets

Current tax assets

Cash and cash equivalents

Assets classified as held for sale

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Borrowings

Provisions

Current tax liabilities

Derivative financial instruments

Liabilities associated with assets classified as held for sale

Non-current liabilities

Trade and other payables

Borrowings

Provisions

Deferred tax liabilities

Derivative financial instruments

Total liabilities

Net liabilities

EQUITY

Called-up share capital

Share premium

Foreign currency translation reserve

Hedge reserve

Hedge reserve – time value

Merger reserve

Retained earnings

Equity attributable to equity holders of the Company

Total equity

Approved by the Board and authorised for issue on 5 March 2024.

Rahul Dhir
Chief Executive Officer
5 March 2024

Richard Miller
Chief Financial Officer
5 March 2024

Notes

2023
$m

2022
$m

287.0

2,532.8

338.6

19.6

288.6

2,981.4

327.1

14.5

3,178.0

3,611.6

107.3

43.5

571.2

3.8

499.0

55.8

181.6

26.8

567.9

15.4

636.3

–

1,280.6

4,458.6

1,428.0

5,039.6

(775.0)

(100.0)

(67.9)

(230.5)

(35.0)

(17.6)

(750.2)

(100.0)

(98.8)

(186.0)

(186.3)

–

(1,226.0)

(1,321.3)

(783.2)

(780.0)

(1,984.6)

(2,372.8)

(403.7)

(420.5)

–

(415.6)

(551.5)

(57.9)

(3,592.0)

(4,177.8)

(4,818.0)

(5,499.1)

(359.4)

(459.5)

216.7

1,294.7

(244.4)

(18.9)

(16.3)

755.2

215.2

1,294.7

(238.6)

(150.3)

(94.4)

755.2

(2,346.4)

(2,241.3)

(359.4)

(459.5)

Tullow Oil plc Annual Report and Accounts 2023 – 131

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Corporate governance

Financial statements

Supplementary information

Group statement of changes in equity
Year ended 31 December 2023

Notes

Share
capital
$m

214.2

Foreign
currency
translation
reserve 1
$m

Share
premium
$m

Hedge
reserve
– time
value2
$m

Hedge
reserve 2
$m

Merger
reserve
$m

Retained
earnings
$m

1,294.7

(248.8)

(39.3)

(146.9)

755.2

(2,295.2)

–

1.0

–

10.2

–

(111.0)

–

52.5

–

49.1

–

(1.0)

5.8

Total
equity
$m

(466.1)

49.1

(58.5)

10.2

–

5.8

215.2

1,294.7

(238.6)

(150.3)

(94.4)

755.2

(2,241.3)

(459.5)

–

1.5

–

(5.8)

–

131.4

–

78.1

–

(109.6)

–

(1.5)

6.0

209.5

(5.8)

–

6.0

At 1 January 2022

Profit for the year

Hedges, net of tax

Currency translation
adjustments

Exercise of employee
share options

Share-based
payment charges

At 1 January 2023

Loss for the year

Hedges, net of tax

Currency translation
adjustments

Exercise of employee
share options

Share-based
payment charges

At 31 December 2023

216.7

1,294.7

(244.4)

(18.9)

(16.3)

755.2

(2,346.4)

(359.4)

1. The foreign currency translation reserve represents exchange gains and losses arising on translation of foreign currency subsidiaries, monetary items
receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a
foreign operation.

2. The hedge reserve represents gains and losses on derivatives classified as effective cash flow hedges.

132 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Group cash flow statement
Year ended 31 December 2023

Cash flows from operating activities

Profit from continuing activities before tax

Adjustments for:

Depreciation, depletion and amortisation

Gain on bargain purchase

Other gains

Taxes paid in kind

Exploration costs written off

Impairment of property, plant and equipment, net

Provisions (reversal)/ expense

Payment for provisions

Decommissioning expenditure

Share-based payment charge

Loss/(gain) on hedging instruments

Gain on bond buyback

Finance income

Finance costs

Operating cash flow before working capital movements

(Increase)/decrease in trade and other receivables

Decrease/(increase) in inventories

Increase/(decrease) in trade payables

Cash generated from operating activities

Income taxes paid

Net cash from operating activities

Cash flows from investing activities

Proceeds from disposals

Purchase of additional interest in joint operation

Purchase of intangible exploration and evaluation assets

Purchase of property, plant and equipment

Interest received

Net cash used in investing activities

Cash flows from financing activities

Debt arrangement fees

Repayment of borrowings

Drawdown of borrowings

Payment of obligations under leases

Finance costs paid

Net cash used in financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Foreign exchange loss

Cash and cash equivalents at end of year

Notes

2023
$m

2022
$m

95.9

442.1

436.6

–

(0.2)

(11.0)

27.0

408.1

(22.0)

(0.6)

(78.1)

6.0

0.4

(86.0)

(44.0)

329.6

1,061.7

(36.3)

66.6

58.7

1,150.7

(274.5)

876.2

0.7

–

(30.2)

(262.3)

23.3

425.8

(196.8)

(3.1)

(21.4)

105.2

391.2

4.2

(127.3)

(57.7)

5.8

(0.8)

–

(42.9)

335.5

1,259.8

288.4

(48.0)

(193.1)

1,307.1

(229.3)

1,077.8

68.1

(126.8)

(42.6)

(263.8)

8.9

(268.5)

(356.2)

(5.0)

–

(432.2)

(100.0)

129.7

(195.0)

(240.0)

(742.5)

(134.8)

636.3

(2.5)

–

(203.8)

(249.0)

(552.8)

168.8

469.1

(1.6)

499.0

636.3

Tullow Oil plc Annual Report and Accounts 2023 – 133

Strategic report

Corporate governance

Financial statements

Supplementary information

Accounting policies
Year ended 31 December 2023

(a) General information
Tullow Oil plc is a company incorporated and domiciled in
the United Kingdom under the Companies Act 2006. The
address of the registered office is Tullow Oil plc, Building
9, Chiswick Park, 566 Chiswick High Road, London W4
5XT. The primary activity of the Group is the discovery and
production of oil and gas.

(b) Adoption of new and revised standards

New International Financial Reporting
Standards adopted
The Group has applied the following standards and
amendments for the first time for their annual reporting
period commencing 1 January 2023:

• IFRS 17 Insurance Contracts

• Disclosure of Accounting Policies – Amendments to IAS

1 and IFRS Practice Statement 2

• Definition of Accounting Estimates – Amendments to IAS 8

• Deferred Tax related to Assets and Liabilities arising from

a Single Transaction – Amendments to IAS 12

The amendments listed above did not have any impact
on the amounts recognised in prior periods and are not
expected to significantly affect the current or future periods.

• International Tax Reform – Pillar Two
Model Rules – Amendments to IAS 12

On 23 May 2023 an amendment to IAS 12 was issued which
introduced a temporary mandatory exception in IAS 12 from
recognising and disclosing deferred tax assets and liabilities
related to the top-up tax, which is effective immediately and
require new disclosures about the Pillar Two exposures.

The amendments clarify that IAS 12 applies to income
taxes arising from tax law enacted or substantively
enacted to implement the Pillar Two Model Rules
published by the Organization for Economic Cooperation
and Development (OECD), including tax law that
implements qualified domestic minimum top-up taxes.

The mandatory exception applies retrospectively.
However, because no new legislation to implement the
top-up tax was enacted or substantively enacted on 31
December 2022 in any jurisdiction in which the Group
operates and no related deferred tax was recognised at
that date, the retrospective application has no impact on
the Group’s consolidated Financial Statements.

Upcoming International Financial Reporting
Standards not yet adopted
Certain new accounting standards, amendments to
accounting standards and interpretations have been
published that are not mandatory for 31 December 2023
reporting periods and have not been early adopted by the
Group. These standards, amendments or interpretations
are not expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable
future transactions.

134 – Tullow Oil plc Annual Report and Accounts 2023

(d) Basis of preparation
The Financial Statements have been prepared in
accordance with UK-adopted international accounting
standards (UK-adopted IFRSs) and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No. 1606/2002 as it applies in the European Union. The
financial reporting framework that has been applied in the
preparation of the Parent Company Financial Statements
is applicable law and United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure
Framework” (United Kingdom Generally Accepted
Accounting Practice).

The Financial Statements have been prepared on the
historical cost basis, except for derivative financial
instruments and contingent considerations which
have been measured at fair value less cost to sell. The
Financial Statements are presented in US dollars and all
values are rounded to the nearest $0.1 million, except
where otherwise stated. The material accounting policies
adopted by the Group are set out below.

Liquidity risk management and going concern

Assessment period and assumptions
The Directors consider the going concern assessment
period to be up to 31 March 2025. The Group closely
monitors and manages its liquidity headroom. Cash
forecasts are regularly produced, and sensitivities run for
different scenarios including, but not limited to, changes
in commodity prices, different production rates from the
Group’s producing assets and different outcomes on
ongoing disputes or litigation.

Management has applied the following oil price
assumptions for the going concern assessment:

• Base Case: $78/bbl for 2024, $75/bbl for 2024; and

• Low Case: $70/bbl for 2024, $70/bbl for 2025.

At 31 December 2023, the Group had $1.0 billion liquidity
headroom consisting of c.$0.5 billion free cash and $0.5
billion available under the revolving credit facility.

The Group or its affiliates may, at any time and from time to

Strategic report

Corporate governance

Financial statements

Supplementary information

(d) Basis of preparation continued

(e) Basis of consolidation continued

Liquidity risk management and going concern
continued

Assessment period and assumptions continued
time, seek to retire or purchase outstanding debt through
cash purchases and/or exchanges, in open-market
purchases, privately negotiated transactions or otherwise.

Such repurchases or exchanges, if any, will be upon such
terms and at such prices as management may determine,
and will depend on prevailing market conditions, liquidity
requirements, contractual restrictions, and other factors.
The amounts involved may be material. The Group has
repaid $0.3 billion and $0.2 billion of the 2025 and 2026
Notes, respectively, during the year. The repayment of the
2025 Notes was partially funded by a drawdown of $130
million of the Glencore facility.

The Group’s forecasts show that the Group and Parent
Company will be able to operate within its current debt
facilities and have sufficient financial headroom for the
going concern assessment period under its Base Case and
Low Case at the end of the going concern period, including
a full drawdown of the Glencore debt facility to support
the payment of the 2025 Notes. The Directors have also
performed a reverse stress test to establish the average
oil price throughout the going concern period required to
reduce headroom to zero, that price was determined to be
$45/bbl. Based on the analysis above, the Directors have a
reasonable expectation that the Group and Parent Company
has adequate resources to continue in operational existence
for the foreseeable future. Thus, they have adopted the going
concern basis of accounting in preparing the Annual Report
and Accounts.

(e) Basis of consolidation
The consolidated Financial Statements incorporate
the Financial Statements of the Company and entities
controlled by the Company (its subsidiaries) made up
to 31 December each year. Control is achieved where
the Company has the power over an investee entity,
is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to use its
power to affect its returns.

The results of subsidiaries acquired or disposed of during
the year are included in the Group income statement
from the transaction date of acquisition, being the date
on which the Group gains control, and will continue to be
included until the date that control ceases.

If the Group loses control over a subsidiary, it derecognises
the related assets, liabilities, non-controlling interest and
other components of equity, while any resultant gain or loss
is recognised in profit or loss. Any investment retained is
recognised at fair value. All intra-Group transactions, balances,
income and expenses are eliminated on consolidation.

Where necessary, adjustments are made to the Financial
Statements of subsidiaries to bring the accounting policies
used into line with those used by the Group.

Joint arrangements
The Group is engaged in oil and gas exploration,
development and production through unincorporated joint
arrangements; these are classified as joint operations in
accordance with IFRS 11. The Group accounts for its share of
the results and assets and liabilities of these joint operations.
In addition, where Tullow acts as operator to the joint
operation, the gross liabilities and receivables (including
amounts due to or from non-operating partners) of the joint
operation are included in the Group’s balance sheet.

(f) Business combinations
The acquisition method of accounting is used to account
for all business combinations, regardless of whether
equity instruments or other assets are acquired. The
consideration transferred for the acquisition comprises:

• Fair values of the assets transferred.

• Liabilities incurred to the former owners of the

acquired business.

• Equity interests issued by the Group.

• Fair value of any asset or liability resulting from a

contingent consideration arrangement.

• Fair value of any pre-existing equity interest in

the subsidiary.

The Group determines that it has acquired a business
when the acquired set of activities and assets include an
input and a substantive process that together significantly
contribute to the ability to create outputs. The acquired
process is considered substantive if it is critical to the
ability to continue producing outputs, and the inputs
acquired include an organised workforce with the
necessary skills, knowledge, or experience to perform
that process or it significantly contributes to the ability
to continue producing outputs and is considered unique
or scarce or cannot be replaced without significant cost,
effort, or delay in the ability to continue producing outputs.

Identifiable assets acquired and liabilities and contingent
liabilities assumed when control is obtained over a business,
and when an interest or an additional interest is acquired in a
joint operation which is a business are, with limited exceptions,
measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred.

The excess of the consideration transferred, amount of
any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in
the acquired entity over the fair value of the net identifiable
assets acquired is recorded as goodwill. If those amounts
are less than the fair value of the net identifiable assets of
the business acquired, the difference is recognised directly
in profit or loss as a bargain purchase.

Tullow Oil plc Annual Report and Accounts 2023 – 135

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Corporate governance

Financial statements

Supplementary information

(g) Revenue from contracts with customers
Revenue from contracts with customers represents the
sales value, net of VAT, of the Group’s share of liftings in
the year. Revenue is recognised when control of the goods
or services are transferred to the customer at an amount
that reflects the consideration to which the Group expects
to be entitled in exchange for those goods or services.
The Group has concluded that it is the principal in all of
its revenue arrangements since it controls the goods or
services before transferring them to the customer.

i) Revenue from crude oil sales

The crude oil produced by the upstream operations is
sold to external customers. Revenue from the sale of
crude oil is recognised at the point in time when control
of the product is transferred to the customer, which is
typically when goods are delivered, and title has passed.
The transportation and shipping costs associated with the
transfer of the product to the point of sale is recognised as
a selling cost.

Under the terms of the relevant production sharing
arrangements, the Group is entitled to its participating
share in the crude oil based on the Group’s working
interest. Revenue from contracts with customers
is recognised based on the actual volumes sold to
customers. No adjustments are made to revenue for
any differences between volumes sold to customers
and unsold volumes which the Group is entitled to sell
based on its working interest. Revenue in respect of such
volumes is only recognised when there is a transfer of
output to the Group’s customers. Differences between
the volume which the Group is entitled to sell based on its
working interest and the actual volumes that the Group
has sold to customers are recognised as an over/underlift
(note (h)) within cost of sales.

Under the terms of the Production Sharing Contracts in
Gabon and Côte d’Ivoire, the Group is not required to pay
any corporate income taxes. The share of the profit oil
which the government is entitled to is deemed to include
a portion representing the notional corporate income tax
paid by the government on behalf of the contractors. This
portion of notional corporate income tax is presented
as an income tax expense with a corresponding amount
recognised in Revenue.

The Group’s sales of crude oil are priced based on the
consideration specified in contracts with customers with
reference to quoted market prices in active markets,
adjusted for a quality differential based on gravity of the
crude oil sold relative to Brent. Invoices are typically paid
on 30-60 day terms.

For certain non–operated arrangements, the Group’s stake is
structured as a carried interest, in which all costs relating to
the performance of petroleum operations are borne by the
operator and other Joint Venture Partners and are recovered
upon production. The recognition of revenue is on net basis,
where the Group only accounts for its share of profit oil.

(g) Revenue from contracts with

customers continued
ii) Revenue from gas sales

Revenue associated with the sale of natural gas in Ghana is
measured in line with the consideration agreed per MMBtu
in the existing sales contracts with offtakers. The transfer of
control occurs when title passes at the point the customer
takes physical delivery. The Group principally satisfies its
performance obligations at a point in time and the amounts
of revenue recognised relating to performance obligations
satisfied over time are not significant.

(h) Over/underlift
Lifting or offtake arrangements for oil and gas produced
in certain of the Group’s jointly owned operations are
such that each participant may not receive and sell its
precise share of the overall production in each period. The
resulting imbalance between cumulative entitlement and
cumulative production less stock is underlift or overlift.
Underlift and overlift are valued at market value and
included within receivables and payables respectively.
Movements during an accounting period are adjusted
through cost of sales such that gross profit is recognised
on an entitlements basis.

(i) Inventories
Inventories, other than oil products, are stated at the
lower of cost and net realisable value. Cost is determined
on a weighted average cost basis and comprises direct
purchase costs. Net realisable value is determined by
reference to prices existing at the balance sheet date, less
estimated costs of completion and the estimated costs
necessary to make the sale.

Oil product is stated at net realisable value and changes in
net realisable value are recognised in the income statement.

(j) Foreign currencies
The US dollar is the presentational currency of the Group.
For the purpose of presenting consolidated Financial
Statements, the assets and liabilities of the Group’s non-US
dollar-denominated entities are translated at exchange
rates prevailing on the balance sheet date. Income and
expense items are translated at the average exchange
rate for the period. Currency translation adjustments
arising on the restatement of opening net assets of
non-US dollar subsidiaries, together with differences
between the subsidiaries’ results translated at average
rates versus closing rates, are recognised in the statement
of comprehensive income and expense and transferred
to the foreign currency translation reserve. All resulting
exchange differences are classified as equity until disposal
of the subsidiary. On disposal, the cumulative amounts
of the exchange differences are recognised as income
or expense.

136 – Tullow Oil plc Annual Report and Accounts 2023

Accounting policies continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

(j) Foreign currencies continued
Transactions in foreign currencies are recorded at the rates
of exchange ruling at the transaction dates. Monetary
assets and liabilities are translated into functional currency
at the exchange rate ruling at the balance sheet date,
with a corresponding charge or credit to the income
statement. However, exchange gains and losses arising
on monetary items receivable from or payable to a foreign
operation for which settlement is neither planned nor
likely to occur, which form part of the net investment in a
foreign operation, are recognised in the foreign currency
translation reserve and recognised in profit or loss on
disposal of the net investment.

(k) Assets classified as held for sale
Non-current assets or disposal groups classified as held
for sale are measured at the lower of carrying amount
and fair value less costs to sell. A loss for any initial or
subsequent write-down of the asset or disposal group to
a revised fair value less costs to sell is recognised at each
reporting date. Non-current assets and disposal groups
are classified as held for sale if their
carrying amount will be recovered through a sale
transaction rather than through continuing use. This
condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for
immediate sale in its present condition. Management must
be committed to the sale, which should be expected to
qualify for recognition as a completed sale within one year
from the date of classification. Assets and corresponding
liabilities classified as held for sale are
presented separately as current items in the statement of
financial position.

(l) Intangible, exploration and evaluation

assets and oil and gas assets

The Group adopts the successful efforts method of
accounting for exploration and evaluation costs. Pre-
licence costs are expensed in the period in which they
are incurred. All licence acquisition, exploration and
evaluation costs and directly attributable administration
costs are initially capitalised in cost centres by well, field or
exploration area, as appropriate.

These costs are then written off as exploration costs in the
income statement unless commercial reserves have been
established or the determination process has not been
completed and there are no indications of impairment.

Exploration and evaluation assets are tested for impairment
when reclassified to development assets, or whenever facts
and circumstances indicate impairment. An impairment
loss is recognised for the amounts by which the exploration
and evaluation assets’ carrying amount exceeds their
recoverable amount. The recoverable amount is the higher
of the exploration and evaluation asset’s fair value less cost
to sell and their value in use.

(l) Intangible, exploration and evaluation
assets and oil and gas assets continued
Once commercial reserves are found, exploration and
evaluation assets are tested for impairment and transferred
to development assets. No depreciation and/or amortisation
is charged during the exploration and evaluation phase.

All field development costs are capitalised as property, plant
and equipment. Property, plant and equipment related to
production activities is amortised in accordance with the
Group’s depletion and amortisation accounting policy.

Cash consideration received on farm-down of exploration
and evaluation assets is credited against the carrying value
of the asset. The excess amount over the carrying value of
the asset is recognised as a gain on disposal of exploration
and evaluation assets in the statement of profit or loss.

(m) Commercial reserves
Commercial reserves are proven and probable oil
and gas reserves, which are defined as the estimated
quantities of crude oil, natural gas and natural gas liquids
which geological, geophysical and engineering data
demonstrate with a specified degree of certainty to
be recoverable in future years from known reservoirs and
which are considered commercially producible. There
should be a 50% statistical probability that the actual
quantity of recoverable reserves will be more than the
amount estimated as proven and probable reserves and a
50% statistical probability that it will be less.

(n) Depletion and amortisation
All expenditure carried within each field is amortised from
the commencement of production on a unit of production
basis, which is the ratio of oil and gas production in the
period to the estimated quantities of commercial reserves
at the end of the period plus the production in the
period, generally on a field-by-field basis or by a group of
fields which are reliant on common infrastructure. Costs
used in the unit of production calculation comprise the
net book value of capitalised costs plus the estimated
future field development costs required to recover the
commercial reserves remaining. Changes in the estimates
of commercial reserves or future field development costs
are dealt with prospectively.

(o) Impairment of property, plant
and equipment
The Group assesses at each reporting date whether there
is an indication that an asset or Cash Generating Unit (CGU)
may be impaired. In assessing whether an impairment
is required, the carrying value of the asset or CGU is
compared with its recoverable amount. The recoverable
amount is the higher of the asset’s/CGU’s fair value less
costs of disposal (FVLCD) and value in use (VIU). Given the
nature of the Group’s activities, information on the fair value
of an asset is usually difficult to obtain unless negotiations
with potential purchasers or similar transactions are
taking place.

Tullow Oil plc Annual Report and Accounts 2023 – 137

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Corporate governance

Financial statements

Supplementary information

(o) Impairment of property, plant
and equipment continued
Consequently, unless indicated otherwise, the recoverable
amount used in assessing the impairment charges
described below is VIU. The Group estimates VIU using a
discounted cash flow model.

In order to discount the future cash flows the Group
calculates asset or CGU-specific discount rates.

The discount rates are based on an assessment of a relevant
peer group’s post-tax weighted average cost of capital
(WACC). The post-tax WACC is subsequently grossed up to
a pre-tax rate. The Group then deducts any exploration risk
premium which is implicit within a peer group’s WACC and
subsequently applies additional country risk premium for all
CGUs, an element of which is determined by whether the
assets are onshore or offshore.

Where there is evidence of economic interdependency
between fields, such as common infrastructure, the fields
are grouped as a single CGU for impairment purposes.

Where conditions giving rise to impairment subsequently
reverse, the effect of the impairment charge is also
reversed as a credit to the income statement, net of
any amortisation that would have been charged since
the impairment.

(p) Decommissioning
Provision for decommissioning is recognised in full
when the related facilities are installed. A corresponding
amount equivalent to the provision is also recognised
as part of the cost of the related property, plant and
equipment. The amount recognised is the estimated
cost of decommissioning, discounted to its net present
value using a risk-free rate, and is re-assessed each year
in accordance with local conditions and requirements.
Changes in the estimated timing of decommissioning
or decommissioning cost estimates are dealt with
prospectively by recording an adjustment to the provision,
and a corresponding adjustment to property, plant
and equipment. The unwinding of the discount on the
decommissioning provision is included as a finance cost.

(q) Property, plant and equipment –

non-oil and gas assets

Property, plant and equipment is stated in the balance sheet
at cost less accumulated depreciation and any recognised
impairment loss. Depreciation on property, plant and
equipment other than production assets is provided at rates
calculated to write off the cost less the estimated residual
value of each asset on a straight-line basis over its expected
useful economic life of between three and ten years.

(r) Share issue expenses and share

premium account

Costs of share issues are written off against the premium
arising on the issues of share capital.

(s) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

All other finance costs, which include interest on
borrowings calculated using the effective interest method
as described in paragraph (aa), obligations under finance
leases, the unwinding effect of discounting provisions
and exchange differences, are recognised in the income
statement in the period in which they are incurred.

(t) Taxation
Current and deferred tax, including UK corporation tax
and overseas corporation tax, are provided at amounts
expected to be paid using the tax rates and laws that have
been enacted or substantively enacted by the balance
sheet date. Deferred corporation tax is recognised on
all temporary differences that have originated but not
reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or right to
pay less, tax in the future have occurred at the balance
sheet date. Deferred tax assets are recognised only to the
extent that it is considered more likely than not that there
will be suitable taxable profits from which the underlying
temporary differences can be deducted. Deferred tax is
measured on a non-discounted basis.

Deferred tax is provided on temporary differences
arising on acquisitions that are categorised as business
combinations. Deferred tax is recognised at acquisition
as part of the assessment of the fair value of assets and
liabilities acquired. Any deferred tax is charged or credited
in the income statement as the underlying temporary
difference is reversed.

Petroleum revenue tax (PRT) is treated as an income tax
and deferred PRT is accounted for under the temporary
difference method. UK PRT refunds are included in the
income statement and is taxable for UK corporation tax.

(u) Pensions
Contributions to the Group’s defined contribution pension
schemes are charged to operating profit on an accrual basis.

(v) Derivative financial instruments
The Group uses derivative financial instruments, such
as forward currency contracts and commodity options
contracts, to hedge its foreign currency risks and
commodity price risks respectively.

Derivatives are recognised initially at fair value at the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date.
The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and
effective as a hedging instrument, in which event the

138 – Tullow Oil plc Annual Report and Accounts 2023

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(v) Derivative financial instruments
continued
timing of the recognition in profit or loss depends on the
nature of the hedge relationship.

(v) Derivative financial instruments
continued
reserve will not be recovered in the future, that amount is
immediately reclassified to profit or loss.

For the purpose of hedge accounting, hedges are classified as:

• Fair value hedges when hedging the exposure to

changes in the fair value of a recognised asset or liability
or an unrecognised firm commitment.

• Cash flow hedges when hedging the exposure to

variability in cash flows that is either attributable to a
particular risk, or associated with a recognised asset
or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised firm
commitment.

• Hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group
formally designates and documents the hedge relationship
to which it wishes to apply hedge accounting.

The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being
hedged and how the Group will assess whether the
hedging relationship meets the hedge effectiveness
requirements (including the analysis of sources of hedge
ineffectiveness and how the hedge ratio is determined).
A hedging relationship qualifies for hedge accounting if it
meets all of the following effectiveness requirements:

• There is ‘an economic relationship’ between the hedged

item and the hedging instrument.

• The effect of credit risk does not ‘dominate the value
changes’ that result from that economic relationship.

• The hedge ratio of the hedging relationship is the same
as that resulting from the quantity of the hedged item
that the Group actually hedges and the quantity of the
hedging instrument that the Group actually uses to
hedge that quantity of hedged item.

If a hedging relationship ceases to meet the hedge
effectiveness requirement relating to the hedge ratio
but the risk management objective for that designated
hedging relationship remains the same, the Group adjusts
the hedge ratio of the hedging relationship (i.e. rebalances
the hedge) so that it meets the qualifying criteria again.

The Group designates only the intrinsic value of option
contracts as a hedged item, i.e. excluding the time value of
the option. The changes in the fair value of the aligned time
value of the option are recognised in other comprehensive
income and accumulated in the time value hedge reserve.
If the hedged item is transaction related, the time value is
reclassified to profit or loss when the hedged item affects
profit or loss. If the hedged item is time period-related, then
the amount accumulated in the time value hedge reserve
is reclassified to profit or loss on a rational basis. Those
reclassified amounts are recognised in profit or loss in the
same line as the hedged item. Furthermore, if the Group
expects that some or all of the loss accumulated in hedging

Cash flow hedges
The effective portion of the gain or loss on the hedging
instrument is recognised in OCI in the cash flow hedge
reserve, while any ineffective portion is recognised
immediately in the statement of profit or loss. The
cash flow hedge reserve is adjusted to the lower of the
cumulative gain or loss on the hedging instrument and the
cumulative change in fair value of the hedged item.

The Group uses oil option contracts for its exposure to
volatility of Dated Brent prices. The ineffective portion
relating to option contracts is recognised as gain or loss on
hedging instruments in the Group income statement.

Amounts previously recognised in other comprehensive
income and accumulated in equity are reclassified to profit
or loss in the periods when the hedged item affects profit
or loss, in the same line as the recognised hedged item.

Cash flow hedge accounting is discontinued only when
the hedging relationship or a part thereof ceases to meet
the qualifying criteria. This includes when the designated
hedged forecast transaction or part thereof is no longer
considered to be highly probable to occur, or when the
hedging instrument is sold, terminated or exercised without
replacement or rollover. When cash flow hedge accounting
is discontinued, amounts previously recognised within other
comprehensive income remain in equity until the forecast
transaction occurs and are reclassified to profit or loss or
transferred to the initial carrying amount of a non-financial
asset or liability as above. If the forecast transaction is no
longer expected to occur, amounts previously recognised
within other comprehensive income will be immediately
reclassified to profit or loss.

(w) Leases
On inception of a contract, the Group assesses whether
the contract is, or contains, a lease. The contract is, or
contains, a lease if it conveys the right to control the use
of an identified asset for a period of time in exchange
for consideration. To determine whether the contract
conveys the right to control the use of an identified asset,
the Group assesses whether the contract involves the use
of an identified asset, the Group has the right to obtain
substantially all of the economic benefits from the use of
the asset throughout the period of use, and the Group has
the right to direct the use of the asset.

Lessee accounting

Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the leased
asset is available for use by the Group. The right-of-use
asset is initially measured at cost, which comprises
the initial amount of the lease liability, in case of Joint
operation, adjusted for any amount receivable from Joint

Tullow Oil plc Annual Report and Accounts 2023 – 139

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Financial statements

Supplementary information

(w) Leases continued
Lessee accounting continued

Venture Partners and any lease payments made at or
before the commencement date, plus any initial direct
costs incurred and an estimate of costs required to remove
or restore the underlying asset, less any lease incentives
received. The right-of-use asset is depreciated over the
shorter of the asset’s useful life and the lease term on
a straight-line basis, or applying the unit of production
method, and the Joint Venture receivable is allocated
against the monthly Joint Venture billing cycle.

The initial measurement of the corresponding lease liability
is at the present value of the lease payments that are not
paid at the lease commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate.

The lease payments include fixed payments, less any lease
incentive receivable, variable leases payments based on
an index or rate, and amounts expected to be payable by
the lessee under residual value guarantees.

The lease liability is subsequently measured at amortised
cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising
from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable
under a residual value guarantee or if the Group changes
its assessment of whether it will exercise a purchase,
extension or termination option. When the lease liability
is remeasured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset or
is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.

The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases that have a lease
term of 12 months or less, and leases of low-value assets
with a value of $5,000.

Over the course of a lease contract, there will be taxable
timing differences that could give rise to deferred tax,
subject to local tax laws and regulations.

Extension and termination options are included in a
number of property and equipment leases across the
Group. These are used to maximise operational flexibility
in terms of managing the assets used in the Group’s
operations. The majority of extension and termination
options held are exercisable only by the Group and not by
the respective lessor.

(x) Share-based payments
The Group has applied the requirements of IFRS 2 Share-
based Payments. The Group has share-based awards that
are equity settled and cash settled as defined by IFRS
2. The fair value of the equity settled awards has been
determined at the date of grant of the award allowing for
the effect of any market-based performance conditions.

(x) Share-based payments continued
This fair value, adjusted by the Group’s estimate of the
number of awards that will eventually vest as a result of
non-market conditions, is expensed uniformly over the
vesting period.

The fair values were calculated using a binomial option
pricing model with suitable modifications to allow for
employee turnover after vesting and early exercise. Where
necessary, this model is supplemented with a Monte Carlo
model. The inputs to the models include: the share price at
date of grant; exercise price; expected volatility; expected
dividends; risk-free rate of interest; and patterns of exercise
of the plan participants.

For cash settled awards, a liability is recognised for the
goods or service acquired, measured initially at the fair
value of the liability. At each balance sheet date until the
liability is settled, and at the date of settlement, the fair
value of the liability is remeasured, with any changes in fair
value recognised in the income statement.

(y) Financial assets
At initial recognition, the Group measures a financial
asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss (FVPL), transaction
costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried
at FVPL are expensed in profit or loss.

The subsequent measurement of financial assets depends
on their classification, as set out overleaf.

i) Financial assets measured at amortised cost
Assets are subsequently classified and measured at
amortised cost when the business model of the Company
is to collect contractual cash flows and the contractual
terms give rise to cash flows that are solely payments
of principal and interest. These assets are carried at
amortised cost using the effective interest method if
the time value of money is significant. Gains and losses
are recognised in profit or loss when the assets are
derecognised, modified or impaired. This category of
financial assets includes trade and other receivables.

Financial assets measured at amortised cost include trade
receivables, loans and other receivables that have fixed or
determinable payments that are not quoted in an active
market. Loans and receivables are measured at amortised
cost using the effective interest method, less any
impairment. Interest income is recognised by applying the
effective interest rate, except for short-term receivables
when the recognition of interest would be immaterial.

Interest income is accrued on a time basis, by reference
to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying amount.

140 – Tullow Oil plc Annual Report and Accounts 2023

Accounting policies continuedYear ended 31 December 2023Strategic report

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Financial statements

Supplementary information

(y) Financial assets continued

ii) Financial assets measured at fair value through

other comprehensive income

Assets are subsequently classified and measured at fair value
through other comprehensive income when the business
model of the Company is to collect contractual cash flows
and sell the financial assets, and the contractual cash flows
represent solely payments of principal and interest.

iii) Financial assets measured at fair value through

profit or loss

Financial assets are classified as measured at fair value
through profit or loss when the asset does not meet the
criteria to be measured at amortised cost or fair value
through other comprehensive income. These assets are
carried on the balance sheet at fair value with gains or losses
recognised in the income statement. Derivatives, other than
those designated as effective hedging instruments, are
included in this category. As at 31 December 2023, the Group
does not have any financial assets classified at fair value
through profit or loss or other comprehensive income.

Regular way purchases and sales of financial assets are
recognised on trade date, being the date on which the
Group commits to purchase or sell the asset. Financial
assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all
the risks and rewards of ownership.

Impairment of trade and Joint Venture receivables
The Group applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To
measure the expected credit losses, trade receivables
have been grouped based on shared credit risk
characteristics and days past due.

The expected loss rates are based on the payment profiles
of sales over the historical period and the corresponding
historical credit losses experienced during this period.
These rates are then applied to the gross carrying amount
of the receivable to arrive at the loss allowance for the
period. Based on management assessment, the credit
loss in trade receivables and Joint Venture receivable as at
31 December 2023 would be immaterial; therefore, in line
with IFRS 9, no impairment was recognised (2022: $nil).

In order to minimise the risk of default, credit risk is
managed on a Group basis (note 17).

(z) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, demand
deposits and other short-term highly liquid investments that
are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value.

(aa) Effective interest method
The effective interest method is a method of calculating
the amortised cost of a financial asset and of allocating
interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees on points paid or
received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts)
through the expected life of the financial asset, or, where
appropriate, a shorter period.

Income is recognised on an effective interest basis
for debt instruments other than those financial assets
classified as at FVTPL.

(ab) Financial liabilities
The measurement of financial liabilities is determined by
the initial classification.

i) Financial liabilities at fair value through profit

or loss:

Those balances that meet the definition of being held for
trading are measured at fair value through profit or loss.
Such liabilities are carried on the balance sheet at fair value
with gains or losses recognised in the income statement.

ii) Financial liabilities measured at amortised cost:
All financial liabilities not meeting the criteria of being
classified at fair value through profit or loss are classified
as financial liabilities measured at amortised cost. The
instruments are initially recognised at its fair value net of
transaction costs that are directly attributable to the issue of
financial liability. Subsequent to initial recognition, financial
liabilities are measured at amortised cost using the effective
interest method. Trade payables and borrowings fall under
this category of financial instruments.

As at 31 December 2023 all financial liabilities are
measured at amortised cost.

The Group derecognises a financial liability when it
is extinguished, i.e. when the obligation specified in
the contract is discharged or cancelled or expires. A
substantial modification of the terms of an existing
financial liability or a part of it is accounted for as an
extinguishment of the original financial liability and the
recognition of a new financial liability.

The difference between the carrying amount of the
financial liability extinguished and any consideration paid
is recognised in the Income Statement as other income
if the transaction results in a gain, or finance costs if the
result is a loss.

iii) Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the
net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal
right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and
settle the liabilities simultaneously.

Tullow Oil plc Annual Report and Accounts 2023 – 141

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Financial statements

Supplementary information

(ac) Equity instruments
Equity instruments are classified according to the
substance of the contractual arrangements entered into.

An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting
all of its liabilities. Equity instruments issued by the Group
are recorded at the proceeds received, net of direct
issue costs.

(ad) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of
the obligation.

(ae) Critical accounting judgements
The Group assesses critical accounting judgements
annually. The following are the critical judgements, apart
from those involving estimations which are dealt with in
policy (af), that the Directors have made in the process of
applying the Group’s accounting policies and that have the
most significant effect on the amounts recognised in the
Financial Statements.

Carrying value of intangible exploration and
evaluation assets (note 9)

The amounts for intangible exploration and evaluation
assets represent active exploration projects. These
amounts will be written off to the income statement
as exploration costs unless commercial reserves are
established or the determination process is not completed
and there are no indications of impairment in accordance
with the Group’s accounting policy. The process of
determining whether there is an indicator for impairment
or calculating the impairment requires critical judgement.

The key areas in which management has applied
judgement and estimation are as follows: the Group’s
intention to proceed with a future work programme for a
prospect or licence; the likelihood of licence renewal or
extension; the assessment of whether sufficient data exist
to indicate that, although a development in the specific
area is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered
in full from successful development or by sale; and the
success of a well result or geological or geophysical
survey. Details on impact of these key estimates using
sensitivities applied to impairment models can be found
in note 8.

The most material area where judgement was applied
during 2023 was in the assessment of the value in use
(VIU) of the Kenyan CGU and assessing the likelihood of
recovery of the net book value of the asset. Triggers for
an impairment assessment were identified following the
withdrawal of the JV partners and an increase in Group’s
long-term oil price assumption, resulting in an increase in

(ae) Critical accounting judgements
continued

Carrying value of intangible exploration and
evaluation assets (note 9)

the underlying value of the project. Due to the stage of this
project being pre-final investment decision (FID) and only
having 2C resources booked, the VIU assessment required
estimation and judgement in a number of different aspects
including oil prices differentials, uncontracted cost profiles
and certain fiscal terms. Furthermore, the Group has
identified the following estimation uncertainties, which
require judgement, in respect to the Group’s ability to
realise the estimated VIU; receiving an acceptable offer
from a strategic partner, obtaining financing for the
project and government deliverables in form of provision
of required infrastructure and fiscal terms. These items
require satisfactory resolution before the Group can
take FID. Due to the binary nature of these uncertainties
the Group was unable to either adjust the cash flows
or discount rate appropriately. It has therefore used its
judgement and assessed the probability of achieving FID
and therefore the recognition of commercial reserves.

This probability was applied to the VIU to determine a risk
adjusted VIU and compared against the net book value
of the asset. Based on this an impairment charge of $17.9
million was booked as at 31 December 2023. Should
the uncertainties around the project be resolved there
will be a reversal of previously recognised impairment.
However, if the uncertainties are not resolved there will
be an additional impairment of $242.2 million.

(af) Key sources of estimation uncertainty
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the balance sheet
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below.

Carrying value of property, plant and equipment
(note 9)
Management performs impairment reviews on the Group’s
property, plant and equipment assets at least annually with
reference to indicators in IAS 36 Impairment of Assets.
Where indicators of impairments or impairment reversals
are present and an impairment or impairment reversal
test is required, the calculation of the recoverable amount
requires estimation of future cash flows within complex
impairment models.

Key assumptions and estimates in the impairment models
relate to: commodity prices assumptions, pre-tax discount
rates, commercial reserves and the related cost profiles.
Proven and probable reserves are estimates of the amount
of oil and gas that can be economically extracted from
the Group’s oil and gas assets. The Group estimates its
reserves using standard recognised evaluation techniques.
The estimate is reviewed at least annually by management
and by independent consultants. Proven and probable

142 – Tullow Oil plc Annual Report and Accounts 2023

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Financial statements

Supplementary information

(af) Key sources of estimation
uncertainty continued

Carrying value of property, plant and equipment
(note 9) continued

reserves are determined using estimates of oil and gas in
place, recovery factors and future commodity prices, the
latter having an impact on the total amount of remaining
recoverable reserves and the proportion of the gross
reserves which are attributable to host governments
under the terms of the Production Sharing Contracts.
Future development costs are estimated taking into
account the level of development required to produce the
reserves by reference to operators, where applicable, and
internal engineers.

Net entitlement reserves estimates are subsequently
calculated using the current oil price and cost recovery
assumptions, in line with the relevant agreements.

Changes in reserves as a result of factors such as
production cost, recovery rates, grade of reserves or oil
and gas prices could impact the depletion rates, carrying
value of assets (refer to the Commercial Reserves and
Contingent Resources Summary on page 191).

The estimation applied by management to the exploration
risk premium adjustment to its impairment discount
rates, estimated future commodity prices and forecast
cash flows on the TEN asset would have the most
material impact on the 2023 Financial Statements should
management have concluded differently.

Details on the impact of these key estimates and
judgements using sensitivity applied to impairment
models can be found in note 9.

Lease accounting (note 18)

Discount rate
The Group has assessed the appropriate incremental
borrowing rate applicable for each contract. Management
has applied the practical expedient which allows for the
adoption of a portfolio approach, where a single discount
rate for a portfolio of leases with similar characteristics
can be applied. As the Group has external borrowings with
a consortium of lenders, these are considered the best
reference for the incremental borrowing rate for the Group
at the lease commencement date if the interest rate
implicit in the lease is not readily determinable. For the
material remeasurements during the year, predominantly
on the TEN FPSO lease discussed in note 18 the Group has
assessed the incremental borrowing rate to be 16.88%.

Determination of the lease term
Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions.
Extension and termination options are included in a
number of property and equipment leases across the
Group. These are used to maximise operational flexibility
in terms of managing the assets used in the Group’s
operations. For leases relating to Joint Venture operations
where there is an option to extend, the Group will only

Lease accounting (note 18) continued
Determination of the lease term continued

proceed after it has received Joint Venture approval to
extend. At the inception of new leases in relation to joint
arrangements they do not include any period covered
by an extension option in the lease term because they
cannot be reasonably certain that approval from the other
venturers can be obtained. The majority of extension and
termination options held are exercisable only by the Group
and not by the respective lessor.

In respect of the TEN FPSO lease, the lease term was
updated to reflect the management’s best estimate view
that the FPSO will continue to be leased until the cessation
of production in 2032 and assumes an exercise of the
extension option following a decision not to exercise the
purchase option.

Uncertain tax treatments
The Group is subject to various material claims which
arise in the ordinary course of its business in various
jurisdictions, including cost recovery claims, claims
from regulatory bodies and both corporate income tax
and indirect tax claims. The Group is in formal dispute
proceedings regarding a number of these tax claims. The
resolution of tax positions, through negotiation with the
relevant tax authorities or litigation, can take several years
to complete. In assessing whether these claims should
be provided for in the Financial Statements, management
has considered them in the context of the applicable
laws and relevant contracts for the countries concerned.
Management has applied judgement in assessing the likely
outcome of the claims and has estimated the financial
impact based on external tax and legal advice and prior
experience of such claims.

Provisions of $85.0 million (2022: $106.4 million) are included
in income tax payable ($78.3 million (2022: $70.6 million)),
deferred tax liability ($nil (2022: $nil)), and provisions ($6.7
million (2022: $35.8 million)). Where these matters relate to
expenditure which is capitalised within Intangible Exploration
and Evaluation Assets and Property, Plant and Equipment, any
difference between the amounts accrued and the amounts
settled is capitalised within the relevant asset balance,
subject to applicable impairment indicators. Where these
matters relate to producing activities or historical issues, any
differences between the accrued and settled amounts are
taken to the Group income statement.

Due to the uncertainty of such tax items, it is possible that on
conclusion of an open tax matter at a future date the outcome
may differ significantly from management’s estimate. If the
Group was unsuccessful in defending itself from all of these
claims, the result would be additional liabilities of $1,030.3
million (2022: $1,024.0 million) which includes $6.9 million
of interest and penalties (2022: $32.4 million).

Tullow Oil plc Annual Report and Accounts 2023 – 143

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Financial statements

Supplementary information

(af) Key sources of estimation
uncertainty continued

Bangladesh litigation
The National Board of Revenue (NBR) is seeking to disallow
$118.6 million of tax relief in respect of development
costs incurred by Tullow Bangladesh Limited (TBL). The
NBR subsequently issued a payment demand to TBL in
February 2020 for Taka 3,094.3 million (c.$29.3 million)
requesting payment by 15 March 2020. However, under
the Production Sharing Contract (PSC), the Government
is required to indemnify TBL against all taxes levied by
any public authority, and the share of production paid to
Petrobangla (PB), Bangladesh’s national oil company, is
deemed to include all taxes due which PB is then obliged
to pay to the NBR. TBL sent the payment demand to PB
and the Government requesting the payment or discharge
of the payment demand under their respective PSC
indemnities. On 14 June 2021, TBL issued a formal notice
of dispute under the PSC to the Government and PB. A
further request for payment was received from NBR on
28 October 2021 demanding settlement by 15 November
2021. Arbitration proceedings were initiated under the
PSC on 29 December 2021. A procedural hearing was held
on 28 June 2022 which set the timetable for the process
going forward. The first submissions have been made in
October 2022 with counter submissions received on 17
January 2023. The second submission was made in June
2023 with the first Tribunal hearing scheduled for 20-24
May 2024. A decision is expected in H1 2025.

Other items

Other items totalling $294.0 million (2022: $280.0 million)
comprise exposures in respect of claims for corporation
tax in respect of disallowed expenditure or withholding
taxes that are either currently under discussion with the
tax authorities or which arise in respect of known issues for
periods not yet under audit.

Timing of cash flows
While it is not possible to estimate the timing and amount
of tax cash flows in relation to possible outcomes with
certainty, as they are subject to outcome of court/
arbitration proceedings and any potential appeals,
management anticipates that there will not be material
cash taxes paid in excess of the amounts provided for
uncertain tax treatments.

Uncertain tax treatments continued
The provisions and contingent liabilities relating to these
disputes have decreased following the conclusion of tax
authority challenges and matters lapsing under the statute
of limitations, but have increased, following new claims
being initiated and extrapolation of exposures through
to 31 December 2023, giving rise to an overall decrease
in provision of $21.4 million and increase in contingent
liability of $6.2 million.

Ghana tax assessments
In October 2021, Tullow Ghana Limited (TGL) filed a
Request for Arbitration with the International Chamber
of Commerce (ICC) disputing the $320.3 million branch
profits remittance tax (BPRT) assessment issued as part of
the direct tax audit for the financial years 2014 to 2016. The
Ghana Revenue Authority (GRA) is seeking to apply BPRT
under a law which the Group considers is not applicable to
TGL, since it falls outside the tax regime provided for in the
Petroleum Agreements and relevant double tax treaties.
The arbitration hearing took place in October 2023 and a
decision is expected in the current financial year. TGL is
not required to pay any amounts of BPRT until the dispute
is formally resolved.

In December 2022, TGL received a $190.5 million corporate
income tax assessment and payment demand from the
GRA relating to the disallowance of loan interest for the
financial years 2010 to 2020. The Group has previously
disclosed assessments by the GRA relating to the same
issue; this revised assessment supersedes all previous
claims. The Group considers the assessment to breach
TGL’s rights under its Petroleum Agreements. In February
2023, TGL filed a Request for Arbitration with the ICC,
disputing the assessment with the suspension of TGL’s
obligation to pay any amount in relation to the assessment
until the dispute is formally resolved. The arbitration hearing
is scheduled to commence on 30 June 2025.

In December 2022, TGL received a $196.5 million
corporate income tax assessment and payment demand
from the GRA relating to proceeds received by Tullow
during the financial years 2016 to 2019 under Tullow’s
corporate Business Interruption Insurance policy. The
Group considers the assessment to breach TGL’s rights
under its Petroleum Agreements. In February 2023, TGL
filed a Request for Arbitration to the ICC, disputing the
assessment with the suspension of TGL’s obligation to pay
any amount in relation to the assessment until the dispute
is formally resolved. The arbitration hearing is scheduled to
commence on 17 November 2025. The Group continues
to engage with the Government of Ghana with the aim of
resolving the BPRT, loan interest and insurance disputes on
a mutually acceptable basis.

144 – Tullow Oil plc Annual Report and Accounts 2023

Accounting policies continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Notes to the Group Financial Statements
Year ended 31 December 2023

Note 1. Segmental reporting
The information reported to the Group’s Chief Executive Officer for the purposes of resource allocation and assessment
of segment performance is focused on four Business Units – Ghana, Non-operated producing assets including Uganda
and decommissioning assets, Kenya and Exploration. Therefore, the Group’s reportable segments under IFRS 8 are
Ghana, Non-operated, Kenya and Exploration.

The following tables present revenue, loss and certain asset and liability information regarding the Group’s reportable
business segments for the years ended 31 December 2023 and 31 December 2022.

2023

Sales revenue by origin

Segment result1

Provisions reversal

Other gains

Unallocated corporate expenses2

Operating profit

Loss on hedging instruments

Gain on bond buyback

Finance income

Finance costs

Profit before tax

Income tax expense

Loss after tax

Total assets

Total liabilities3

Other segment information

Capital expenditure:

Property, plant and equipment

Intangible exploration and evaluation assets

Depletion, depreciation and amortisation

Impairment of property, plant and equipment, net

Exploration costs written off

Ghana
$m

Non-
Operated
$m

Kenya
$m

Exploration

Corporate
$m

Total
$m

1,311.4

408.2

461.8

114.0

–

(139.1)

1,634.1

(17.9)

(9.9)

(164.6)

329.8

22.0

0.2

(56.1)

295.9

(0.4)

86.0

44.0

(329.6)

95.9

(205.5)

(109.6)

3,529.7

200.9

(2,231.6)

(355.1)

253.3

(10.3)

48.5

426.2

4,458.6

(2.9)

(2,218.1)

(4,818.0)

413.7

0.2

(387.7)

(301.2)

(0.2)

85.9

1.6

(44.1)

(97.9)

0.9

(2.2)

7.5

0.6

–

16.1

–

(17.9)

(9.8)

2.1

–

(5.4)

(9.0)

–

499.5

25.4

(436.6)

(408.1)

(27.0)

1. Segment result is a non-IFRS measure which includes gross profit, exploration costs written off and impairment of property, plant and equipment. See

reconciliation below.

2. Unallocated expenditure includes amounts of a corporate nature and not specifically attributable to a geographic area.

3. Total liabilities – Corporate comprise the Group’s external debt and other non-attributable liabilities.

Reconciliation of segment result

Segment result

Add back:

Exploration costs written off

Impairment of property, plant and equipment

Gross profit

2023
$m

329.8

27.0

408.1

764.9

2022
$m

589.2

105.2

391.2

1,085.6

Tullow Oil plc Annual Report and Accounts 2023 – 145

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 1. Segmental reporting continued
All sales are made to external customers. Included in revenue arising from Ghana and Non-Operated segments are
revenues of approximately $462.3 million, $326.9 million and $181.9 million relating to the Group’s customers who each
contribute more than 10% of total sales revenue (2022: $696.9 million, $566.1 million, $310.9 million and $242.3 million).
As the sales of oil and gas are made on global markets and are highly liquid, the Group does not place reliance on the
largest customers mentioned above. Payment terms are typically 30 days from the bill of lading.

During 2023, Tullow has entered into an oil marketing contract under which it will sell its crude oil entitlements to
Glencore Energy UK Limited. The contract expires in 2028.

Ghana
$m

Non-
Operated
$m

Kenya
$m

Exploration
$m

Corporate
$m

Total
$m

2022

Sales revenue by origin

Segment result1

Provisions expense

Gain on bargain purchase

Other gains

Unallocated corporate expenses2

Operating profit

Gain on hedging instruments

Finance income

Finance costs

Profit before tax

Income tax expense

Profit after tax

Total assets

Total liabilities3

Other segment information

Capital expenditure:

Property, plant and equipment

Intangible exploration and evaluation assets

Depletion, depreciation and amortisation

Impairment of property, plant and equipment, net

Exploration costs written off

1,578.5

692.5

524.0

337.3

–

(0.5)

–

(102.6)

(319.4)

(337.5)

1,783.1

589.2

(4.1)

196.8

3.1

(51.1)

733.9

0.8

42.9

(335.5)

442.1

(393.0)

49.1

3,827.7

(2,220.5)

380.6

(401.6)

265.6

(14.1)

46.0

519.7

5,039.6

(4.6)

(2,858.3)

(5,499.1)

342.9

0.9

(362.1)

(380.6)

(0.9)

26.9

(1.7)

(52.7)

(10.6)

1.8

–

(2.1)

(1.3)

–

42.1

–

(0.5)

(105.6)

0.9

–

(9.7)

–

370.7

39.2

(425.8)

(391.2)

(105.2)

1. Segment result is a non-IFRS measure which includes gross profit, exploration costs written off and impairment of property, plant and equipment. See

reconciliation below.

2. Unallocated expenditure includes amounts of a corporate nature and not specifically attributable to a geographic area.

3. Total liabilities – Corporate comprise the Group’s external debt and other non-attributable liabilities.

146 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023
Strategic report

Corporate governance

Financial statements

Supplementary information

Note 1. Segmental reporting continued

Sales revenue and non-current assets by origin

Ghana

Total Ghana

Kenya

Total Kenya

Argentina

Côte d’Ivoire

Total Exploration

Gabon

Côte d’Ivoire

Total Non-Operated

Corporate

Total

Sales
revenue
2023
$m

1,311.4

Sales
revenue
2022
$m

1,578.5

–

419.5

42.3

461.8

477.0

47.0

524.0

(139.1)

(319.4)

Non-
current
assets 1
2023
$m

2,771.0

250.0

36.4

5.8

42.2

82.8

0.4

83.2

12.0

Non-
current
assets 1
2022
$m

3,087.4

258.5

33.6

2.4

36.0

132.6

59.2

191.8

23.4

1,634.1

1,783.1

3,158.4

3,597.1

1. Non-current assets exclude derivative financial instruments and deferred tax assets.

Note 2. Total revenue

Revenue from contracts with customers

Revenue from crude oil sales

Revenue from gas sales

Total revenue from contracts with customers

Loss on realisation of cash flow hedges

Total revenue

Finance income has been presented as part of net financing costs (refer to note 5).

Note 3. Staff costs
The average annual number of employees employed by the Group worldwide was:

Administration

Technical

Total

2023
$m

2022
$m

1,744.6

2,102.5

28.6

–

1,773.2

2,102.5

(139.1)

1,634.1

(319.4)

1,783.1

2023
Number

2022
Number

187

206

393

182

194

376

Tullow Oil plc Annual Report and Accounts 2023 – 147

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 3. Staff costs continued
Staff costs in respect of those employees were as follows:

Salaries

Social security costs

Pension costs

Redundancy costs

Total staff costs

2023
$m

71.5

7.1

6.3

–

84.9

2022
$m

66.3

7.0

5.3

0.1

78.7

A proportion of the Group’s staff costs shown above is recharged to the Group’s Joint Venture Partners, a proportion is
allocated to operating costs and a proportion is capitalised into the cost of fixed assets under the Group’s accounting
policy for exploration, evaluation and production assets with the remainder classified as an administrative overhead cost
in the income statement. The net staff costs recognised in the income statement were $16.5 million (2022: $10.5 million).

The Group operates defined contribution pension schemes for staff and Executive Directors. The contributions are
payable to external funds which are administered by independent trustees. Contributions during the year amounted to
$6.3 million (2022: $5.3 million).

Details of Directors’ remuneration, Directors’ transactions and Directors’ interests are set out in the part of the Directors’
Remuneration Report described as having been audited, which forms part of these Financial Statements.

Note 4. Other costs

Operating profit is stated after charging/(deducting):

Operating costs

Depletion and amortisation of oil and gas and leased assets1

Overlift, underlift and oil stock movements

Royalties

Share-based payment charge included in cost of sales

Other cost of sales

Total cost of sales

Share-based payment charge included in administrative expenses

Depreciation of other fixed assets1

Other administrative costs

Total administrative expenses

Provisions (reversal)/ expense2

Fees payable to the Company’s auditor for:

The audit of the Company’s annual accounts

The audit of the Company’s subsidiaries pursuant to legislation

Total audit services

Non-audit services:

Audit-related assurance services – half-year review

Corporate finance services

Total non-audit services

Total

2022
$m

266.5

410.7

(46.3)

61.7

0.4

4.4

Notes

2023
$m

292.9

430.8

109.3

33.9

0.4

1.9

869.2

697.5

5.6

5.8

44.7

56.1

(22.0)

2.0

0.5

2.5

0.5

–

0.5

3.0

5.4

15.1

30.5

51.0

4.2

2.1

0.6

2.7

0.5

1.0

1.5

4.2

1. Depreciation expense on leased assets of $81.4 million (2022: $60.9 million) as per note 9 includes a charge of $2.2 million ($3.9 million) on leased

administrative assets, which is presented within administrative expenses in the income statement. The remaining balance of $79.2 million (2022: $57.0
million) relates to other leased assets and is included within cost of sales.
The reduction in depreciation of other fixed assets expense is caused by corporate assets in the UK and Ghana reaching the end of their useful life
during 2022 and 2023.

2. This includes credit to the movements in other provisions of $22.0 million (2022: $4.1 million charge) as well as restructuring and redundancy costs of

$nil (2022: $0.1 million).

148 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023
Strategic report

Corporate governance

Financial statements

Supplementary information

Note 4. Other costs continued
The increase in other administrative costs is mainly due to one-off corporate project expenditure which was partially
offset by lower insurance premiums in the current year.

Fees payable to Ernst & Young LLP and its associates for non-audit services to the Company are not required to be
disclosed because the consolidated Financial Statements are required to disclose such fees on a consolidated basis.

Non-audit services were 20% of audit services during the year.

Details of the Company’s policy on the use of the auditor for non-audit services, the reasons why the auditor was used
rather than another supplier and how the auditor’s independence and objectivity are safeguarded are set out in the Audit
Committee Report on pages 82 to 86. No services were provided pursuant to contingent fee arrangements.

Note 5. Net financing costs

Interest on bank overdrafts and borrowings

Interest on obligations under leases

Total borrowing costs

Finance and arrangement fees

Other interest expense

Unwinding of discount on decommissioning provisions

Total finance costs

Interest income on amounts due from Joint Venture Partners for leases

Other finance income

Total finance income

Net financing costs

Note 6. Taxation on profit on continuing activities

Current tax on profits for the year

UK corporation tax

Foreign tax

Taxes paid in kind under production sharing contracts

Adjustments in respect of prior periods

Total corporate tax

UK petroleum revenue tax

Total current tax

Deferred tax

Origination and reversal of temporary differences

UK corporation tax

Foreign tax

Adjustments in respect of prior periods

Total deferred corporate tax

Deferred UK petroleum revenue tax

Total deferred tax

Total income tax expense

Notes

2023
$m

237.0

78.6

315.6

1.9

2.0

10.1

329.6

(30.1)

(13.9)

(44.0)

285.6

2023
$m

(1.9)

322.2

11.0

(10.8)

342.1

(0.7)

341.4

(22.9)

(106.5)

(2.8)

(132.2)

(3.7)

(135.9)

205.5

2022
$m

250.4

76.4

326.8

0.3

2.4

6.0

335.5

(29.6)

(13.3)

(42.9)

292.6

2022
$m

(11.8)

321.0

21.4

(3.3)

327.3

(2.8)

324.5

11.4

54.0

(2.9)

62.5

6.0

68.5

393.0

Tullow Oil plc Annual Report and Accounts 2023 – 149

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 6. Taxation on profit on continuing activities continued
The tax rate applied to profit on continuing activities in preparing the reconciliation below is the UK corporation tax rate
applicable to the Group’s UK profits, being 23.5% (2022: 19%), which is the weighted average rate calculated for FY 2023
taking into account the UK CT rate change effective from 1 April 2023. The difference between the total income tax
expense shown above and the amount calculated by applying the standard rate of UK corporation tax applicable to UK
profits of 23.5% is as follows:

Profit from continuing activities before tax

Tax on profit from continuing activities at the standard UK corporation tax rate of 23.5% (2022: 19%)

Effects of:

Non-deductible exploration expenditurea

Other non-deductible expensesb,d

Net deferred tax asset not recognisedc

Utilisation of tax losses not previously recognised

Adjustment relating to prior years

Other tax rates applicable outside the UK

Other income not subject to corporation tax

Tax impact of acquisition through business combination

Total income tax expense for the year

2023
$m

95.9

22.5

3.4

35.4

65.1

(0.2)

(2.8)

82.4

(0.3)

–

2022
$m

442.1

84.0

0.5

27.8

138.5

(0.4)

(6.2)

214.6

(0.1)

(65.7)

205.5

393.0

Includes recurring explorations costs written off where there is no deferred tax impact.

Includes impairments.

Includes hedging losses and interest expense.

Includes movements in provisions in respect of uncertain tax treatments.

The Group’s profit before taxation will continue to arise in jurisdictions where the effective rate of taxation differs from
that in the UK, such as Ghana (35%) and Gabon convention fields (50%), Gabon PSC fields (35%) and CDI PSC (25%).
Furthermore, there is no tax benefit arising on net interest and hedging expense in the UK. Accordingly, the Group’s tax
charge will continue to vary according to the jurisdictions in which pre-tax profits arise.

The Group has tax losses of $4,195.3 million (2022: $4,237.4 million) of which $3,109.9 million are available for offset
indefinitely and $1,085.4 million in the next 5-7 years against future taxable profits in the companies in which the losses
arose. Deferred tax assets have not been recognised in respect of losses of $4,165.7 million (2022: $4,128.9 million) as it is
not sufficiently probable that there will be future taxable profits against which these losses can be utilised.

The Group has recognised deferred tax assets of $7.4 million (2022: $35.8 million) in relation to tax losses only to the
extent of anticipated future taxable income or gains in relevant jurisdictions. The Group has suffered these losses in
either the current or preceding period in the tax jurisdiction to which the deferred tax asset relates. The tax losses can be
carried forward indefinitely.

There are no temporary differences relating to unremitted earnings of overseas subsidiaries as the Group is able to
control the timing of the reversal of these temporary differences and it is probable that they will not reverse in the
foreseeable future.

Tax relating to components of other comprehensive income
During 2023 nil tax expense (2022: nil tax expense) has been recognised through other comprehensive income.

Global minimum top-up tax

The Group operates in the UK, which has enacted new legislation to implement the global minimum top-up tax. However,
since the newly enacted tax legislation is only effective from 1 January 2024, there is no current tax impact for the year
ended 31 December 2023. The Group is not expecting to pay top-up taxes in the future because all jurisdictions in
which the Group operates are above 15% and management is not currently aware of any circumstances under which this
might change.

The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and
accounts for it as a current tax when it is incurred.

150 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 7. (Loss)/earnings per ordinary share
Basic (loss)/earnings per ordinary share amounts are calculated by dividing net (loss)/ profit for the year attributable to
ordinary equity holders of the Parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per ordinary share amounts are calculated by dividing net (loss)/ profit for the year attributable to
ordinary equity holders of the Parent by the weighted average number of ordinary shares outstanding during the year
plus the weighted average number of dilutive ordinary shares that would be issued if employee and other share options
were converted into ordinary shares.

(Loss)/ profit for the year

Net (loss)/profit attributable to equity shareholders

Effect of dilutive potential ordinary shares

Diluted net (loss)/ earnings attributable to equity shareholders

Number of shares

Basic weighted average number of shares

Dilutive potential ordinary shares

Diluted weighted average number of shares

Note 8. Intangible exploration and evaluation assets

At 1 January

Additions

Amounts written off

At 31 December

2023
$m

(109.6)

–

(109.6)

2023
Number

2022
$m

49.1

–

49.1

2022
Number

1,447,121,945

1,437,099,966

–

48,375,409

1,447,121,945

1,485,475,375

2023
$m

288.6

25.4

(27.0)

287.0

2022
$m

354.6

39.2

(105.2)

288.6

The below table provides a summary of the exploration costs written off on a pre-tax basis by country.

Country

Guyana

Côte d’Ivoire

Kenya

New Ventures

Uganda

Gabon

Other

Total write-off

CGU

Kanuku

Orinduik

Block 524

Blocks 10BB and 13T

Various

Exploration areas 1, 1A, 2 and 3A

DE8

Various

a. Current-year expenditure on assets previously written off.

b. Following VIU assessment subsequent to withdrawal of JV Partners.

c. Revision of short, medium and long-term oil price assumptions.

d. New Ventures expenditure is written off as incurred.

e. Release of indirect tax provision following settlement.
f. Unsuccessful well costs written off.

Rationale for
2023
write-off

2023
write-off/
(back)
$m

2023
Remaining
recoverable
amount
$m

b, c

1.7

0.7

3.3

17.9

4.1

(4.3)

3.4

0.2

27.0

–

242.2

–

Tullow Oil plc Annual Report and Accounts 2023 – 151

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 8. Intangible exploration and evaluation assets continued

Kenya
Discussions with the Government of Kenya (GoK) on securing government deliverables and approval of the Field
Development Plan (FDP) have been ongoing since its submission on 10 December 2021. An updated FDP was submitted
on 3 March 2023 and is being reviewed by the GoK before ratification by the Kenyan Parliament. Energy and Petroleum
Regulatory Authority (EPRA), the regulator, has engaged third party consultants to review the revised FDP and the current
review period ends on 30 June 2024. The Group expects a production licence to be granted once government due
process has been completed.

On 22 May 2023, Africa Oil Corporation (AOC) and Total Energies (TE) gave notice of their respective withdrawal from the
Blocks 10BA, 10BB and 13T Production Sharing Contracts (PSCs) and the Joint Operating Agreements (JOAs), effective
30 June 2023, quoting differing internal strategic objectives as reasons. The withdrawal is ultimately subject to the GoK’s
consent, at which stage the transaction will be considered completed and Tullow will have full rights and liabilities under
the JOA. Pending GoK approval, per the terms of the agreement, the participating interest (PI) vests in trust for the sole
and exclusive benefit of Tullow, who is the only remaining Joint Venture Partner.

In management’s view, in light of public statements and announcements made by AOC and TE to this effect, and in
accordance with the terms of the Joint Operating Agreement, it is considered that the ownership of the 50% held by
AOC and TE was passed on 30 June 2023, resulting in Tullow holding 100%. From that date, Tullow has the right to benefit
from the PI and is liable for all costs incurred going forward (except those for which the withdrawing parties remain
liable for). As the sole party, Tullow can control and direct the use of the asset from 30 June 2023. The position remained
unchanged as at 31 December 2023. Tullow accounted for this as an asset acquisition at nil cost.

The withdrawal of the partners and an upward revision to the Group’s oil prices as detailed in note 9 are considered to be
impairment assessment triggers for the asset as at 31 December 2023, and in line with its accounting policy the Group
has performed a VIU assessment. The cash flows were discounted using a pre-tax nominal discount rate of 20% (2022:
20%). This resulted in an NPV significantly in excess of the book value of $260.1 million. However, the Group has identified
the following uncertainties in respect of the Group’s ability to realise the estimated VIU; receiving and subsequently
finalising an acceptable offer from a strategic partner and securing governmental approvals relating thereto, obtaining
financing for the project and government deliverables in form of provision of required infrastructure and fiscal terms.
These items require satisfactory resolution before the Group can take a Final Investment Decision (FID). The Group
continues to progress with the farm-down process.

Due to the binary nature of these uncertainties the Group was unable to either adjust the cash flows or discount
rate appropriately. It has therefore used its judgement and assessed a probability of achieving FID and therefore the
recognition of commercial reserves. This probability was applied to the VIU to determine a risk-adjusted VIU and
compared against the net book value of the asset. Certain risks have increased since 31 December 2022, predominantly
around farm-down and project financing. This has been partially offset by an increased equity interest in the project and
changes in oil price assumptions.

Based on this, the NPV has been revised to $242.2 million and an impairment of $17.9 million has been recognised as at
31 December 2023.

Should the uncertainties around the project be resolved, there will be a reversal of a previously recorded impairment.
However, if the uncertainties are not resolved there will be an additional impairment of $242.2 million. A reduction or
increase in the two-year forward curve of $5/bbl, based on the approximate range of annualised average oil price over
recent history, and a reduction or increase in the medium and long-term price assumptions of $5/bbl, based on the range
of annualised average historical prices, are considered to be reasonably possible changes for the purposes of sensitivity
analysis. Decreases to oil prices specified above would increase the impairment charge by $37.9 million, whilst increases
to oil prices specified above would result in a credit to the impairment charge of $37.7 million. A 1% change in the pre-
tax discount rate would result in an additional impairment charge of $33.9 million. The Group believes a 1% change in
the pre-tax discount rate to be a reasonable possibility based on historical analysis of the Group’s and a peer group of
companies’ impairments.

For Net Zero Emissions sensitivities refer to page 45 of the TCFD.

Guyana
On 10 August 2023, Tullow announced that it had agreed to sell its total interest in Tullow Guyana B.V., which includes
the Orinduik licence (60% operated equity) in Guyana, to Eco Guyana Oil and Gas (Barbados) Limited in exchange for an
upfront cash consideration of $0.7 million and contingent consideration linked to a series of potential future milestones.

The transaction completed on 16 November 2023 and resulted in $0.7 million of gain on disposal included in Other gains
the income statement.

152 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 8. Intangible exploration and evaluation assets continued

Country

Guyana

Côte d’Ivoire

New Ventures

Other

Total write-off

CGU

Kanuku

Orinduik

Block 524

Various

a. Unsuccessful well costs written off.

b. Licence relinquishments, expiry, planned exit or reduced activity.

c. Current year expenditure on assets previously written off.

d. New Ventures expenditure is written off as incurred.

Note 9. Property, plant and equipment

Rationale for
2022
write-off

2022
write-off
$m

2022
Remaining
recoverable
amount
$m

a, b

75.3

22.4

3.1

3.0

1.4

105.2

–

2023
Oil
and gas
assets
$m

2023
Other
fixed
assets
$m

2023
Right
of use
assets
$m

2022
Oil
and gas
assets
$m

2022
Other
fixed
assets
$m

2022
Right
of use
assets
$m

2023
Total
$m

Notes

2022
Total
$m

11,182.6

30.0

1,196.8 12,409.4

10,521.7

416.1

2.3

81.1

499.5

–

(302.8)

–

(302.8)

(67.7)

(11.0)

(10.6)

(89.3)

305.2

473.2

–

69.5

2.0

–

1,091.7

11,682.9

63.5

–

86.6

370.7

473.2

86.6

–

(38.1)

(41.7)

(79.8)

53.9

11,282.1

0.6

21.9

1.5

56.0

(117.5)

1,268.8

12,572.8

11,182.6

(3.4)

30.0

(3.3)

(124.2)

1,196.8

12,409.4

(8,888.4)

(24.4)

(515.2)

(9,428.0)

(8,263.7)

(3.6)

(81.4)

(436.6)

(9.0)

(408.1)

(49.3)

–

10.6

247.6

89.3

(353.7)

(391.2)

–

(0.5)

(54.9)

120.2

(53.8)

(11.2)

–

38.1

2.5

(450.8)

(8,768.3)

(60.9)

–

(46.1)

–

41.7

0.9

(425.8)

(391.2)

(46.1)

–

79.8

123.6

(351.6)

(399.1)

–

247.6

67.7

(53.9)

(9,377.7)

–

11.0

(0.5)

(17.5)

4.4

Net book value at 31 December

1,904.4

(644.8) (10,040.0)

(8,888.4)

(24.4)

(515.2)

(9,428.0)

624.0

2,532.8

2,294.2

5.6

681.6

2,981.4

1. This relates to an acquisition through business combination discussed in note 15 of the 2022 Annual Report and Accounts.

The currency translation adjustments arose due to the movement against the Group’s presentational currency, USD, of
the Group’s UK assets, which have a functional currency of GBP.

Tullow Oil plc Annual Report and Accounts 2023 – 153

Cost

At 1 January

Additions

Acquisitions1

Transfer1

Transfer to assets
held for sale

Asset retirement

Currency translation
adjustments

At 31 December

Depreciation, depletion,
amortisation and impairment

At 1 January

Charge for the year

Impairment loss

Capitalised depreciation

Transfer to assets
held for sale

Asset retirement

Currency translation
adjustments

At 31 December

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 9. Property, plant and equipment continued
During 2023 and 2022 the Group applied the following nominal oil price assumptions for impairment assessments:

2023

2022

Year 1

$78/bbl

$84/bbl

Year 2

$75/bbl

$79/bbl

Year 3

$75/bbl

$70/bbl

Year 4

$75/bbl

$70/bbl

Year 5

Year 6 onwards

$75/bbl

$75/bbl inflated at 2%

$70/bbl

$70/bbl inflated at 2%

Espoir (Côte d’Ivoire)

TEN (Ghana)

Mauritania

UK CGU

UK Corporate

Impairment

Trigger for
2023
impairment

2023
Impairment
$m

Pre-tax
discount rate
assumption

a, c

b, c

d, e

53.5

301.2

27.9

16.5

9.0

408.1

14%

n/a

2023
Remaining
recoverable
amount g
$m

0.4

528.3

–

Increase in production and development costs.

b. Revision of value based on revisions to reserves.

c. Revision of short, medium and long-term oil price assumptions.

d. Change to decommissioning estimate.

e. The fields in the UK are grouped into one CGU as all fields within those countries share critical gas infrastructure.

f. Fully impaired right-of-use asset relating to a vacant office space.

g. The remaining recoverable amount of the asset is its value in use.

Impairments identified in the TEN fields of $301.2 million were primarily due to lower 2P reserves partially offset by an
increase in oil price. This was primarily due to delays in gaining approval for the amended TEN PoD which has led to the
deferral of investment and continued field decline.

Oil prices stated above are benchmark prices to which an individual field price differential is applied. All impairment
assessments are prepared on a VIU basis using discounted future cash flows based on 2P reserves profiles. A reduction
or increase in the two-year forward curve of $5/bbl, based on the approximate range of annualised average oil price over
recent history, and a reduction or increase in the medium and long-term price assumptions of $5/bbl, based on the range
of annualised average historical prices, are considered to be reasonably possible changes for the purposes of sensitivity
analysis. Decreases to oil prices specified above would increase the impairment charge by $76.4 million for Ghana and
increase the impairment by $0.4 million for Non-Operated, whilst increases to oil prices specified above would result in
a reduction in the impairment charge of $72.6 million for Ghana and $17.1 million for Non-Operated. A 1% increase in the
pre-tax discount rate would increase the impairment by $15.6 million for Ghana and increase the impairment by $0.4
million for Non-Operated. The Group believes a 1% increase in the pre-tax discount rate to be a reasonable possibility
based on historical analysis of the Group’s and peer group of companies’ impairments.

For Net Zero Emissions sensitivities refer to page 45 of the TCFD and note 25. Climate change and energy transition.

Limande and Turnix CGU (Gabon)

Tchatamba (Gabon)

Oba and Middle Oba CGU (Gabon)

Echira, Niungo and Igongo (Gabon)

TEN (Ghana)

Mauritania

UK CGU

Impairment

Trigger for
2022
impairment/
(reversal)

2022
Impairment/
(reversal)
$m

Pre-tax
discount rate
assumption

2022
Remaining
recoverable
amount d
$m

a,c

(1.6)

(1.3)

(0.4)

(1.4)

380.6

12.8

2.5

391.2

15%

17%

13%

n/a

44.6

38.0

11.8

8.6

931.7

–

a. Change to decommissioning estimate.

b. Revision of value based on revisions to reserves.

c. The fields in the UK are grouped into one CGU as all fields within those countries share critical gas infrastructure.

d. The remaining recoverable amount of the asset is its value in use.

154 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 9. Property, plant and equipment continued
Impairments identified in the TEN fields of $380.6 million were primarily due to lower 2P reserves partially offset by oil
price assumptions.

Oil prices stated above are benchmark prices to which an individual field price differential is applied. All impairment
assessments are prepared on a VIU basis using discounted future cash flows based on 2P reserves profiles. A reduction
or increase in the two-year forward curve of $5/bbl, based on the approximate range of annualised average oil price over
recent history, and a reduction or increase in the medium and long-term price assumptions of $5/bbl, based on the range
of annualised average historical prices, are considered to be reasonably possible changes for the purposes of sensitivity
analysis. Decreases to oil prices specified above would increase the impairment charge by $131.4 million for Ghana and
increase the impairment by $19.2 million for Non-Operated, whilst increases to oil prices specified above would result in
a credit to the impairment charge of $122.0 million for Ghana and no change to Non-Operated. A 1% change in the pre-
tax discount rate would increase the impairment by $33.0 million for Ghana and increase the impairment by $2.9 million
for Non-Operated. The Group believes a 1% change in the pre-tax discount rate to be a reasonable possibility based on
historical analysis of the Group’s and peer group of companies’ impairments.

Note 10. Other assets

Non-current

Amounts due from Joint Venture Partners

VAT recoverable

Current

Amounts due from Joint Venture Partners

Underlifts

Prepayments

Other current assets

2023
$m

332.5

6.1

338.6

2022
$m

323.3

3.8

327.1

498.1

452.3

47.8

21.1

4.2

571.2

909.8

76.2

31.3

8.1

567.9

895.0

The increase in current receivables from JV Partners compared to December 2022 mainly relates to partner’s share of
increased accrual balances (note 15), net increase in GNPC (Ghana National Petroleum Corporation) receivable and other
working capital movements, partially offset by a lower balance of current receivables relating to leases (note 18).

Note 11. Inventories

Warehouse stock and materials

Oil stock

2023
$m

71.5

35.8

107.3

2022
$m

69.1

112.5

181.6

The decrease in oil stock from 31 December 2022 is driven by a decrease in Gabon of $70.6 million due to an additional
lifting in November 2023.

Note 12. Trade receivables
Trade receivables comprise amounts due for the sale of oil and gas. They are generally due for settlement within 30–60
days and are therefore all classified as current. The Group holds the trade receivables with the objective of collecting the
contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

The balance of trade receivables as at 31 December 2023 of $43.5 million (2022: $26.8 million) mainly relates to gas sales
in Ghana.

Tullow Oil plc Annual Report and Accounts 2023 – 155

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 13. Cash and cash equivalents

Cash at bank

Short-term deposits and other cash equivalents

2023
$m

114.9

384.1

499.0

2022
$m

305.3

331.0

636.3

Cash and cash equivalents includes an amount of $36.9 million (2022: $74.7 million) which the Group holds as operator
in Joint Venture bank accounts. Included within cash at bank is $4.5 million (2022: $7.0 million) held as security for
performance bonds relating to work commitments on exploration licences.

Note 14. Assets and liabilities classified as held for sale
On 28 April 2023, Tullow announced that through its wholly owned subsidiary, Tullow Oil Gabon S.A., it had signed an
Asset Swap Agreement (ASA) with Perenco Oil and Gas Gabon S.A. (Perenco). Under the ASA, Tullow has agreed to
assign and transfer certain of its existing participating interests in Limande, Turnix, M’oba, Oba and 17.5% in Simba assets
to Perenco in return for the assignment and transfer by Perenco of 15% if its participating interests in Kowe (Tchatamba)
and 20% of its participating interests in DE8 licence to Tullow.

Due to the agreed neutrality of the transaction, no additional consideration is payable by either party in respect thereof.
The ASA includes provisions to ensure the neutrality of the transaction via cash adjustments for the period between
economic date and completion date.

On completion, all assets and associated liabilities relating to the existing participating interests held in Limande, Turnix,
M’Oba and Oba assets, together with 17.5% of Tullow’s interest in Simba, will be disposed. All assets impacted by the
transaction are included in the ‘Non-Operated’ Business Unit applied for segment performance reporting.

Management concluded that the asset met the IFRS 5 Held for Sale criteria on 19 July 2023, when the agreed form of the
amendment to the Tullow Protocol was submitted to the relevant Governmental Authority of the Gabonese Republic (the
Tullow Protocol is an investment convention that applies to certain Tullow licences). All other conditions precedent to the
completion of the transaction were considered reasonably certain to occur within 12 months of 19 July.

The transaction completed on 29 February 2024. Refer to note 26. Events since 31 December 2023.

The major classes of assets and liabilities comprising the assets classified as held for sale as at 31 December 2023 were
as follows:

Assets

Property, plant and equipment

Other debtors

Assets classified as held for sale

Liabilities

Other payables

Accruals

Decommissioning provision

Liabilities directly associated with assets classified as held for sale

Net assets directly associated with disposal group

2023
$m

55.2

0.6

55.8

(1.4)

(2.0)

(14.2)

(17.6)

38.2

156 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 15. Trade and other payables

Current liabilities

Trade payables

Other payables

Overlifts

Accruals

Current portion of lease liabilities

Notes

2023
$m

22.3

65.3

3.1

498.6

185.7

775.0

2022
$m

68.4

51.4

–

379.3

251.2

750.2

Accruals mainly relate to capital expenditure, interest expense on bonds and staff-related expenses. The movement in the
balance is predominantly driven by an increased level of activity in Ghana during the year relating to Jubilee South East.

Trade and other payables are non-interest bearing except for leases (note 18). The change in trade payables and in other
payables represents timing differences and levels of work activity.

Payables related to operated Joint Ventures (primarily in Ghana and Kenya) are recorded gross with the amount
representing the partners’ share recognised in amounts due from Joint Venture Partners (note 10).

The movement in current lease liabilities is mainly driven by the remeasurement of the TEN FPSO lease discussed in note 18.

Non-current liabilities

Other non-current liabilities1

Non-current portion of lease liabilities

1. Other non-current liabilities include balances related to JV Partners.

Note 16. Borrowings

Current

Borrowings – within one year

10.25% Senior Secured Notes due 2026

Non-current

Borrowings – after one year but within five years

7.00% Senior Notes due 2025

10.25% Senior Secured Notes due 2026

Secured Notes Facility due 2028

Carrying value of total borrowings

Notes

2023
$m

62.2

721.0

783.2

2022
$m

47.1

732.9

780.0

2023
$m

2022
$m

100.0

2023
$m

100.0

2022
$m

489.0

1,371.0

124.6

1,984.6

2,084.6

792.8

1,580.0

–

2,372.8

2,472.8

The Group’s capital structure includes $1,485 million Senior Secured Notes (2026 Notes), $493 million Senior Notes (2025
Notes), $400 million Secured Notes Facility and a $500 million undrawn Super Senior Revolving Credit Facility (SSRCF)
which will primarily be used for working capital purposes.

The 2026 Notes, maturing in May 2026, require an annual prepayment of $100 million, in May, of the outstanding principal
amount plus accrued and unpaid interest, with the balance due on maturity.

On 15 May 2023, the Group made a mandatory prepayment of $100 million of the 2026 Notes.

Tullow Oil plc Annual Report and Accounts 2023 – 157

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 16. Borrowings continued
On 20 June 2023, the Group repurchased $167 million nominal value of 2025 Notes for $100 million cash consideration
through an Unmodified Dutch Auction. A gain on early bond buyback of $65 million is recognised as other income in the
income statement.

On 13 November 2023, Tullow announced that it had entered into a $400 million secured notes facility agreement
maturing in November 2028 (Secured Notes Facility) with Glencore Energy UK Limited (Glencore). The Secured Notes
Facility is available for 18 months and proceeds are available for liability management of the 2025 Notes. The interest on
the Secured Notes Facility will be Term Secured Overnight Financing Rate (SOFR) plus 10% on drawn amounts.

On 1 December 2023, the Group repurchased $115 million nominal value of 2026 Notes for $103 million cash
consideration through an Unmodified Dutch Auction. A gain on early bond buyback of $11 million is recognised as other
income in the income statement.

On 20 December, the Group repurchased $141 million nominal value of 2025 Notes for $130 million cash consideration
through a Modified Dutch Auction. The cash consideration was funded through an equivalent drawdown under the Secured
Notes Facility. A gain on early bond buyback of $10 million is recognised as other income in the income statement.

The Group’s total drawn debt reduced to $2.1 billion, consisting of $493 million nominal value 2025 Notes, $1,485 million
nominal value 2026 Notes, and $130 million outstanding under the Secured Notes Facility.

The 2025 Notes are due in a single payment in March 2025.

The SSRCF, maturing in December 2024, comprises of (i) a $500 million revolving credit facility and (ii) a $100 million
letter of credit facility. The revolving credit facility remains undrawn as at 31 December 2023. Letters of credit amounting
to $10 million (2022: $44 million) have been issued under the facility.

Unamortised debt arrangement fees for the 2026 Notes, 2025 Notes, Secured Notes Facility and the SSRCF are $14.3
million (2022: $20.0 million), $3.6 million (2022: $7.0 million), $5.0 million (2022: $nil) and $2.3 million (2022: $4.8 million)
respectively.

The SSRCF, the 2026 Notes and the Secured Notes Facility are senior secured obligations of Tullow Oil Plc and are
guaranteed by certain of the subsidiaries of the Group.

Capital management
The Group defines capital as the total equity and net debt of the Group. Capital is managed in order to provide returns for
shareholders and benefits to stakeholders and to safeguard the Group’s ability to continue as a going concern. The Group
is not subject to any externally imposed capital requirements. To maintain or adjust the capital structure, management may
put in place new debt facilities, issue new shares for cash, repay debt, engage in active portfolio management, adjust the
dividend payment to shareholders, or undertake such other restructuring activities as appropriate. The Group monitors
capital on the basis of the gearing, being net debt divided by adjusted EBITDAX, and maintains a policy target of less than 1x.

SSRCF covenants
The SSRCF does not have any financial maintenance covenants. Availability under the $500 million cash tranche of the
facility is determined on an annual basis with reference to the Net Present Value of the 2P reserves of the Group (2P NPV)
at the end of the preceding calendar year. SSRCF debt capacity is calculated as 2P NPV divided by 1.1x less senior secured
debt outstanding.

2025 Notes and 2026 Notes covenants
The 2025 Notes and the 2026 Notes are subject to customary high-yield covenants including limitations on debt
incurrence, asset sales and restricted payments such as prepayments of junior debt and dividends.

Key covenants in the current business cycle are considered to be those related to debt incurrence and restricted
payments. For definitions of the capitalised terms used in the following paragraphs please refer to the offering
memorandum of the 2025 Notes and/or the 2026 Notes.

Tullow is permitted to incur additional debt if the ratio of Consolidated Cash Flow to Fixed Charges for the previous 12
months is at least 2.25 times on a pro forma basis.

Tullow is permitted to incur secured debt if the 2P Reserves Coverage Ratio is at least 2.0 times on a pro forma basis.

Tullow is permitted to incur debt to refinance the 2025 Notes on a like-for-like basis, i.e. subordinated to the 2026 Notes.

Tullow is permitted to make payments towards the 2025 Notes amounting to the greater of $100 million per year and
50% of the Consolidated Net Income of the Group for the period from 1 January 2021 to the end of the most recently
completed fiscal half-year for which internal financial statements are available if, after giving pro forma effect to the
payment(s), the 2P Reserves Coverage Ratio is equal to or greater than 1.5 times.

158 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 16. Borrowings continued

2025 Notes and 2026 Notes covenants continued
Tullow is permitted to make payments towards the 2025 Notes amounting to the greater of $100 million per year, 50% of
the Consolidated Net Income of the Group for the period from 1 January 2021 to the end of the most recently completed
fiscal half-year for which internal financial statements are available and 100% of Consolidated Cash Flow per year if, after
giving pro forma effect to the payment(s), the 2P Reserves Coverage Ratio is equal to or greater than 2.0 times and the
Consolidated Leverage Ratio is less than 1.5 times.

The Company or its affiliates may, at any time and from time to time, seek to retire or purchase outstanding debt through
cash purchases and/or exchanges, in open-market purchases, privately negotiated transactions or otherwise. Such
repurchases or exchanges, if any, will be upon such terms and at such prices as management may determine, and will
depend on prevailing market conditions, liquidity requirements, contractual restrictions, and other factors. The amounts
involved may be material.

Secured Notes Facility covenants
The Secured Notes Facility does not have any financial maintenance covenants. The facility is subject to substantially the
same covenants as the 2026 Notes, with additional restrictions related to the use of proceeds from any incurrence of new
indebtedness ranking senior to the facility or sharing the same collateral.

Tullow is permitted to refinance the SSRCF and the 2026 Notes on a like-for-like basis.

Tullow is permitted to refinance the 2025 Notes with new indebtedness which is unsecured and ranks junior to the
Secured Notes Facility.

Note 17. Financial instruments

Financial risk management objectives
The Group’s Corporate Treasury function provides services to the business, coordinates access to international financial
markets, monitors and manages the financial risks relating to the operations of the Group through internal management
reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency
risk, interest rate risk and price risk), credit risk and liquidity risk.

The Group seeks to minimise the effects of these risks by using derivative financial instruments to hedge these risk
exposures, if deemed appropriate. The use of financial derivatives is governed by the Group’s policies approved by the
Board of Directors. Compliance with policies and exposure limits are monitored and reviewed internally on a regular basis.
The Group does not enter into or trade financial instruments, including derivatives, for speculative purposes.

Financial assets

Financial assets at amortised cost

Trade receivables

Amounts due from Joint Venture Partners

Cash and cash equivalents

Financial liabilities

Liabilities at amortised cost

Trade payables

Other payables

Borrowings

Lease liabilities

Derivative financial instruments

Used for hedging

2023
$m

2022
$m

43.5

830.6

499.0

26.8

775.6

636.3

1,373.1

1,438.7

84.5

567.0

115.4

430.7

2,084.6

2,472.8

906.7

984.1

35.0

3,677.8

244.2

4,247.3

Tullow Oil plc Annual Report and Accounts 2023 – 159

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 17. Financial instruments continued

Fair values of financial assets and liabilities
With the exception of the 2026 Notes and the 2025 Notes, the Group considers the carrying value of all its financial assets
and liabilities to be materially the same as their fair value. The fair value of the 2026 Notes and 2025 Notes as determined
using market value at 31 December 2023, was $1,327.3 million (2022: $1,364.8 million) and $458.3 million (2022: $490.0
million) respectively. These are compared to their carrying value of $1,470.9 million (2022: $1,680.0 million) and $489.0
million (2022: $792.9 million). The 2026 Notes and the 2025 Notes are categorised as level 1 in the fair value hierarchy.

No material financial assets are impaired at the balance sheet date. All financial assets and liabilities with the exception of
derivatives are measured at amortised cost.

Fair values of derivative instruments
All derivatives are recognised at fair value on the balance sheet with valuation changes recognised immediately in the
income statement, unless the derivatives have been designated as a cash flow hedge. Fair value is the amount for which
the asset or liability could be exchanged in an arm’s-length transaction at the relevant date. Where available, fair values
are determined using quoted prices in active markets. To the extent that market prices are not available, fair values
are estimated by reference to market-based transactions, or using standard valuation techniques for the applicable
instruments and commodities involved.

The Group’s derivative carrying and fair values were as follows:

Assets/liabilities

Cash flow hedges

Oil derivatives

Deferred premium

Oil derivatives

Total liabilities

2023
Less than
1 year
$m

2023
1–3
years
$m

2023
Total
$m

2022
Less than
1 year
$m

2022
1–3
years
$m

2022
Total
$m

(13.3)

(21.7)

(35.0)

–

(13.3)

(162.1)

(49.7)

(211.8)

(21.7)

(35.0)

(24.2)

(186.3)

(8.2)

(57.9)

(32.4)

(244.2)

Derivatives’ maturity and the timing of their recycling into income or expense coincide.

The following provides an analysis of the Group’s financial instruments measured at fair value, grouped into Levels 1 to 3
based on the degree to which the fair value is observable:

Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities;

Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 which are
observable for the asset or liability, either directly or indirectly; and

Level 3: fair value measurements are those derived from valuation techniques which include inputs for the asset or
liability that are not based on observable market data.

All the Group’s derivatives are Level 2 (2022: Level 2). There were no transfers between fair value levels during the year.

For financial instruments which are recognised on a recurring basis, the Group determines whether transfers have
occurred between levels by re-assessing categorisation (based on the lowest-level input which is significant to the fair
value measurement as a whole) at the end of each reporting period.

160 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 17. Financial instruments continued

Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Group balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. No material enforceable master netting agreements were identified.

The Group has entered into ISDA Master Agreements with derivative counterparties. The following table shows the
amounts recognised for financial assets and liabilities which are subject to offsetting arrangements on a gross basis, and
the amounts offset in the Group balance sheet.

31 December 2023

Derivative assets

Derivative liabilities

31 December 2022

Derivative assets

Derivative liabilities

Gross
amounts
offset
in Group
balance
sheet
$m

Net
amounts
presented
in Group
balance
sheet
$m

(3.0)

3.0

–

(35.0)

Gross
amounts
offset
in Group
balance
sheet
$m

Net
amounts
presented
in Group
balance
sheet
$m

–

(244.2)

Gross
amounts
recognised

3.0

(38.0)

Gross
amounts
recognised
$m

–

(244.2)

Commodity price risk
The Group uses a number of derivatives to mitigate the commodity price risk associated with its underlying oil revenue.
Such commodity derivatives tend to be priced using benchmarks, such as Dated Brent, which correlate as far as possible
to the underlying oil revenue. There is an economic relationship between the hedged items and the hedging instruments
due to a common underlying, i.e. Dated Brent, between them. Forecast oil sales, which are based on Dated Brent, are
hedged with options which have Dated Brent as reference price. An increase in Dated Brent will cause the value of the
hedged item and hedging instrument to move in opposite directions. The Group has established a hedge ratio of 1:1 for
the hedging relationships as the underlying risk of the commodity derivatives is identical to the hedged risk components.
To test the hedge effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair
value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks.
The Group hedges its estimated oil revenues on a portfolio basis, aggregating its oil revenues from substantially all of its
African oil interests.

As at 31 December 2023 and 31 December 2022, all of the Group’s oil derivatives have been designated as cash flow
hedges. The Group’s oil hedges have been assessed to be highly effective.

Financial risk management is adopted centrally for the Group. The Group adopts a risk component hedging strategy.
This results from designating the variability in all the cash flows attributable to the change in the benchmark price per
the oil sales contracts where the critical terms of the hedged item and hedging instrument match.

At 31 December 2023, Tullow’s hedge portfolio provides downside protection for c.60% of forecast production entitlements
in the first half of 2024 with c.$57/bbl weighted average floors; for the same period, c.40% of forecast production entitlements
is capped at weighted average sold calls of c.$77/bbl. In the second half of 2024, Tullow’s hedge portfolio provides downside
protection for c.45% of forecast production entitlements with c.$60/bbl weighted average floors; for the same period, c.20%
of forecast production entitlements is capped at weighted average sold calls of c.$113/bbl.

For the period from June to December 2024, Tullow’s hedge portfolio also includes three-way collars (with call spreads)
with weighted average sold calls of c.$85/bbl and weighted average bought calls of c.$94/bbl, providing full access to oil
price upside beyond the bought call price on c.10% of forecast production entitlements in this period.

Tullow Oil plc Annual Report and Accounts 2023 – 161

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 17. Financial instruments continued

Commodity price risk continued
The following table demonstrates the timing, volumes and prices of the Group’s commodity hedge portfolio at year end:

First half of 2024 hedge portfolio at 31 December 2023

Hedge structure

Straight puts

Collars

Three way collars (call spread)

Total/weighted average

Second half of 2024 hedge position at 31 December 2023

Hedge structure

Straight Puts

Collars

Three way collars (call spread)

Total/weighted average

Bought put
(floor)

Bopd

Sold call

Bought
call

11,217

$60.05

–

24,344

$55.37

$77.47

–

332

$60.00

$105.60

$114.53

35,893

$56.88

$77.85

$114.53

Bought put
(floor)

Bopd

Sold call

Bought
call

6,250

$59.96

–

12,650

$60.36

$113.45

6,500

$60.00

$84.61

25,400

$60.17

$103.66

–

$93.55

The following table demonstrates the sensitivity of the Group’s derivative financial instruments to reasonably possible
movements in Dated Brent oil prices:

Brent oil price

Effect on equity

Market
movement
as at
31 Dec 2023

25%

(25%)

2023
$m

(95.3)

24.2

2022
$m

(464.4)

–

The following assumptions have been used in calculating the sensitivity in movement of the oil price: the pricing
adjustments relate only to the point forward mark-to-market (MTM) valuations, the price sensitivities assume there is no
ineffectiveness related to the oil hedges and the sensitivities have been run only on the intrinsic element of the hedge as
management considers this to be the material component of oil hedge valuations.

Hedge reserve summary
The hedge reserve represents the portion of deferred gains and losses on hedging instruments deemed to be effective
cash flow hedges. The movement in the reserve for the period is recognised in other comprehensive income.

The following table summarises the cash flow hedge reserve by intrinsic and time value, net of tax effects:

Cash flow hedge reserve

Oil derivatives – intrinsic

Oil derivatives – time value

2023
$m

(18.9)

(16.3)

2022
$m

(150.3)

(94.4)

The deferred gains and losses in the hedge reserve are subsequently transferred to the income statement at maturity
of derivative contracts. The tables below show the impact on the hedge reserve and on sales revenue during the year:

Deferred amounts in the hedge reserve – intrinsic

At 1 January

Reclassification adjustments for items included in the income statement on realisation:

Oil derivatives – transferred to sales revenue

Revaluation gains/(losses) arising in the year

At 31 December

2023
$m

(150.3)

111.3

20.1

131.4

(18.9)

2022
$m

(39.3)

288.5

(399.5)

(110.8)

(150.3)

162 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 17. Financial instruments continued

Hedge reserve summary continued

Deferred amounts in the hedge reserve – time value

At 1 January

Reclassification adjustments for items included in the income statement on realisation:

Oil derivatives – transferred to sales revenue

Revaluation gains arising in the year

At 31 December

Reconciliation to sales revenue

Oil derivatives – transferred to sales revenue

Deferred premium paid

Net losses from commodity derivatives in sales revenue (note 2)

2023
$m

(94.4)

27.8

50.3

78.1

2022
$m

(146.9)

30.8

21.7

52.5

(16.3)

(94.4)

2023
$m

111.3

27.8

139.1

2022
$m

288.5

30.8

319.3

Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. During the financial year 2022, the Group was not exposed to interest rate risk as it only
borrowed funds at fixed interest rates. Following a drawdown of the Secured Notes Facility, amounting to $130 million
(note 16), the Group’s borrowings are both fixed and variable interest bearing as at 31 December 2023. The Super Senior
Revolving Credit Facility is based on floating interest rates and remains undrawn as at year end.

Fixed rate debt comprises 2025 Notes and 2026 Notes.

The interest rate profile of the Group’s financial assets and liabilities, excluding trade and other receivables and trade and
other payables, at 31 December 2023 and 2022, was as follows:

2023
Cash
and cash
equivalents
$m

2023
Fixed rate
debt
$m

2023
Floating rate
debt
$m

2022
Cash
and cash
equivalents
$m

2023
Total
$m

2022
Fixed rate
debt
$m

2022
Total
$m

492.3

(1,977.8)

(129.6)

(1,615.1)

0.6

4.1

0.3

1.7

–

0.6

4.1

0.3

1.7

578.1

0.3

16.3

38.8

2.8

(2,500.0)

(1,921.9)

–

0.3

16.3

38.8

2.8

499.0

(1,977.8)

(129.6)

(1,608.4)

636.3

(2,500.0)

(1,863.7)

US$

Euro

Sterling

XAF

Other

Most of the Group’s Cash and cash equivalents consisted of balances earning variable interest rates as at 31 December
2023 and 31 December 2022.

The following table demonstrates the sensitivity of the Group’s financial instruments to reasonably possible movements
in interest rates:

Interest rate

Market movement

100 basis points

(10) basis points

Effect on finance costs

Effect on equity

2023
$m

3.6

(0.9)

2022
$m

–

2023
$m

3.6

(0.9)

2022
$m

–

Tullow Oil plc Annual Report and Accounts 2023 – 163

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 17. Financial instruments continued

Credit risk
The Group has a credit policy that governs the management of credit risk, including the establishment of counterparty
credit limits and specific transaction approvals. The Group limits its counterparty credit risk on cash and cash equivalent
balances by dealing only with financial institutions with credit ratings of at least A or equivalent.

The primary credit exposures for the Group are its receivables generated by the sale of crude oil and natural gas
and amounts due from JV Partners (including in relation to their share of the TEN FPSO lease). These exposures are
managed at the corporate level. During the financial year 2023, the Group’s crude sales were predominantly made to
international oil market participants including the oil majors and trading houses. In November 2023, the Group entered
into oil marketing and offtake contracts with Glencore for the Group’s crude oil entitlements from the Jubilee and Ten
fields in Ghana and the Rabi Light entitlements in Gabon. JV Partners are predominantly international major oil and gas
market participants. Counterparty evaluations are conducted utilising international credit rating agency and financial
assessments. Where considered appropriate, security in the form of trade finance instruments from financial institutions
with an appropriate credit rating, such as letters of credit, guarantees and credit insurance, are obtained to mitigate
the risks.

The Group generally enters into derivative agreements with banks which are lenders under the SSRCF. The Group does
not have any significant credit risk exposure to any single counterparty or any group of counterparties. The maximum
financial exposure due to credit risk on the Group’s financial assets, representing the sum of cash and cash equivalents,
investments, derivative assets, trade receivables, and receivables from Joint Venture Partners, as at 31 December 2023
was $1,373.1 million (2022: $1,438.7 million).

Foreign currency risk
The Group conducts and manages its business predominantly in US dollars, the functional currency of the industry in
which it operates. The Group also purchases the functional currencies of the countries in which it operates routinely
on the spot market. From time to time the Group undertakes transactions denominated in other currencies arising
from certain operating and capital expenditure incurred in currencies other than US dollars; these exposures are often
managed by executing foreign currency financial derivatives. There were no foreign currency financial derivatives in
place as at 31 December 2023 (2022: nil). Cash balances are held in other currencies to meet immediate operating and
administrative expenses or to comply with local currency regulations.

As at 31 December 2023, the only material monetary assets or liabilities of the Group that were not denominated in the
functional currency of the respective subsidiaries involved were $6.7 million in non-US dollar-denominated cash and cash
equivalents (2022: $58.1 million).

The following table demonstrates the sensitivity of the Group’s financial instruments to reasonably possible movements
in US dollar exchange rates:

US$/foreign currency exchange rates

Liquidity risk

Effect on profit before tax

Effect on equity

Market movement

20%

(20%)

2023
$m

1.1

(1.7)

2022
$m

9.7

(14.5)

2023
$m

1.1

(1.7)

2022
$m

9.7

(14.7)

The Group manages its liquidity risk using both short-term and long-term cash flow projections, supplemented by debt
financing plans and active portfolio management across the Group. Ultimate responsibility for liquidity risk management
rests with the Board of Directors, which has established an appropriate liquidity risk management framework covering the
Group’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
for different scenarios including, but not limited to, changes in commodity prices, different production rates from the
Group’s producing assets and delays to development projects. The Group had $1.0 billion (2022: $1.1 billion) of total
facility headroom and free cash as at 31 December 2023.

The following tables detail the Group’s remaining contractual maturities for its non-derivative financial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
based on the earliest date on which the Group can be required to pay.

164 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 17. Financial instruments continued

Liquidity risk continued

Weighted
average
effective
interest rate

Less than
1 month
$m

1–3
months
$m

3 months
to 1 year
$m

31 December 2023

Non-interest bearing

Lease liabilities

Fixed interest rate instruments

Principal repayments

Interest charge

n/a

16.4%

9.9%

Variable interest rate instruments

15.8%

Principal repayments

Interest charge

Total

49.5

45.3

–

94.8

–

55.8

–

17.0

–

5.0

77.8

1–5
years
$m

62.2

734.2

5+
years
$m

Total
$m

–

149.8

337.5

1,376.5

38.1

203.7

100.0

164.0

1,878.0

220.0

–

15.0

130.0

69.0

–

1,978.0

401.0

130.0

89.0

520.8

3,093.4

337.5

4,124.3

31 December 2022

Non-interest bearing

Lease liabilities

Fixed interest rate instruments

Principal repayments

Interest charge

Total

Weighted
average
effective
interest rate

Less than
1 month
$m

1–3
months
$m

3 months
to 1 year
$m

n/a

7.1%

9.7%

93.5

27.3

–

120.8

–

57.1

–

28.0

85.1

26.3

225.2

100.0

197.0

548.5

1–5
years
$m

47.0

746.3

2,400.0

464.0

3,657.3

5+
years
$m

Total
$m

–

10.5

166.8

1,066.4

–

2,500.0

689.0

10.5

4,422.2

Note 18. Leases
This note provides information for leases where the Group is a lessee. The Group did not enter into any contracts acting
as a lessor.

i) Amounts recognised in the balance sheet

Right-of-use assets (included within property, plant and equipment)
and lease liabilities

Property leases

Oil and gas production and support equipment leases

Transportation equipment leases

Total

Current

Non-current

Total

Right-of-use assets

Lease liabilities

31
December
2023
$m

31
December
2022
$m

31
December
2023
$m

31
December
2022
$m

22.0

576.9

25.1

624.0

39.2

639.0

3.4

681.6

27.6

826.4

52.7

906.7

185.7

721.0

906.7

34.6

942.4

7.1

984.1

251.2

732.9

984.1

Additions to the right-of-use assets during the 2023 financial year were $81.1 million. Refer to note 9.

For ageing of lease liabilities, refer to note 17.

TEN FPSO
The Group’s leases balance includes the TEN FPSO, classified as ‘Oil and Gas production and support equipment’. During
the year, the assumption that the TEN FPSO lease term would end in April 2024, when the purchase option was assumed
to be exercised, was updated to reflect the best estimate view that the FPSO will continue to be leased until the cessation
of production in 2032. It also assumes an exercise of the extension option.

Tullow Oil plc Annual Report and Accounts 2023 – 165

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 18. Leases continued

i) Amounts recognised in the balance sheet continued

TEN FPSO continued
The resulting lease liability remeasurement had the following impact on the balances:

Lease liability

Right-of-use asset (included within Property, plant and equipment)

Amounts due from Joint Venture Partners

(39.2)

25.6

13.6

As at 31 December 2023, the present value of the TEN FPSO right-of-use asset was $549.0 million (2022: $596.9 million).

The present value of the TEN FPSO gross lease liability was $763.5 million (2022: $847.9 million).

A receivable from the Joint Venture Partners of $288.8 million (2022: $330.1 million) was recognised in other assets
(note 10) to reflect the value of future payments that will be met by cash calls from partners relating to the TEN
FPSO lease.

The present value of the receivable from the Joint Venture Partners unwinds over the expected life of the lease and the
unwinding of the discount is reported within finance income.

Carrying amounts of the lease liabilities and Joint Venture leases receivables and the movements during the period:

Joint
Venture
lease
receivables
$m

Lease
liabilities
$m

(1,163.4)

(89.4)

–

342.0

(76.4)

3.1

(984.1)

(174.1)

331.5

(78.6)

(1.4)

531.0

40.2

(86.6)

(138.2)

29.6

–

376.1

79.8

(136.5)

30.1

–

Total
$m

(632.4)

(49.2)

(86.6)

203.8

(46.8)

3.2

(608.0)

(94.3)

195.0

(48.5)

(1.4)

(906.7)

349.5

(557.2)

31
December
2023
$m

31
December
2022
$m

7.3

74.1

81.4

78.6

14.0

46.9

60.9

76.4

(30.1)

(29.6)

1.0

0.9

131.8

2.0

1.8

111.5

At 1 January 2022

Additions and changes in lease estimates

Acquisitions

Payments/(receipts)

Interest (expense)/income

Currency translation adjustments

At 1 January 2023

Additions and changes in lease estimates

Payments/(receipts)

Interest (expense)/income

Currency translation adjustments

At 31 December 2023

ii) Amounts recognised in the statement of profit or loss

Depreciation charge of right-of-use assets

Property leases

Oil and gas production and support equipment leases

Total

Interest expense on lease liabilities (included in finance cost)

Interest income on amounts due from Joint Venture Partners

Expense relating to short-term leases

Expense relating to leases of low-value assets

Total

The total net cash outflow for leases in 2023 was $195.0 million (2022: $203.8 million).

166 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 19. Provisions

At 1 January

New provisions, changes in estimates and
reclassifications

Acquisitions1

Transfer to assets and liabilities held for sale

Payments

Unwinding of discount

Currency translation adjustment

At 31 December

Current provisions

Non-current provisions

Decommiss-
ioning
2023
$m

Other
provisions
2023
$m

398.1

116.3

Notes

Decommiss-
ioning
2022
$m

Other
provisions
2022
$m

498.7

228.8

Total
2023
$m

514.4

25.9

–

(14.2)

(67.0)

10.1

2.4

471.6

67.9

403.7

Total
2022
$m

727.5

(67.3)

61.6

(19.7)

36.8

(127.3)

(199.4)

–

(2.3)

116.3

11.1

105.2

6.0

(13.9)

514.4

98.8

415.6

(47.6)

24.8

(72.1)

6.0

(11.6)

398.1

87.7

310.4

47.8

–

(14.2)

(66.4)

10.1

2.5

377.9

53.4

324.5

(21.9)

–

(0.6)

–

(0.1)

93.7

14.5

79.2

1. This relates to an acquisition through business combination discussed in note 15 of the 2022 Annual Report and Accounts.

Other provisions include non-income tax provisions of $38.8 million (2022: $68.3 million) and $54.9 million (2022: $48.0
million) of disputed cases and claims. Management estimates non-current other provisions would fall due between two
and five years.

Non-Current other provisions includes a provision relating to a potential claim arising out of historical contractual
agreement. Further information is not provided as it will be seriously prejudicial to the Company’s interest.

The decommissioning provision represents the present value of decommissioning costs relating to the European and
African oil and gas interests. The Group has assumed cessation of production as the estimated timing for outflow of
expenditure. However, expenditure could be incurred prior to cessation of production or after and actual timing will
depend on a number of factors including, underlying cost environment, availability of equipment and services and
allocation of capital.

The energy transition could result in decommissioning taking place earlier than anticipated. The risk on the timing of
decommissioning activities is limited, supported by production plans to fully produce fields in the foreseeable future. For
Net Zero Emissions sensitivities, including acceleration of decommissioning activities, refer to page 45 of the TCFD and
note 25. Climate change and energy transition.

In 2023, after the extension of several licences in Gabon, the discount rate has increased from 3.5% to 4% for those assets
with an assumed cessation of production date post 2038. This is due to a rate difference between the 10- and 20-year US
Treasury Bills which are used as a data source. This resulted in a decrease in the provision of $3.1 million in Gabon.

Côte d’Ivoire

Gabon

Ghana

Mauritania

Inflation
assumption 1

n/a

Discount
rate
assumption
2023

Cessation of
production
assumption
2023

3.5%

2032

3.5–4%

2034–2047

Total
2023
$m

47.1

28.7

3.5%

2032–2036

208.2

n/a

2018

54.7

39.2

377.9

Discount
rate
assumption
2022

Cessation of
production
assumption
2022

3.5%

n/a

2035

2025–2037

2036

2018

Total
2022
$m

45.6

49.2

190.2

56.0

57.1

398.1

1. Short-term inflation rate assumption has decreased from 2.5% to 2.4% in 2024. Medium and long-term rates of 2% remained unchanged from

31 December 2022.

The Group’s decommissioning activities are ongoing in the UK and Mauritania, with $53.4 of the future costs expected
to be incurred in 2024. The remaining activities are planned to continue through to 2027, with an associated expenditure
of $40.4 million.

Tullow Oil plc Annual Report and Accounts 2023 – 167

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 20. Deferred taxation

Accelerated
tax
depreciation
$m

Decommiss-
ioning
$m

At 1 January 2022

Credit/(charge) to income statement

Acquired through business
combination1

Exchange differences

At 1 January 2023

Credit/(charge) to income statement

Exchange differences

At 31 December 2023

(598.3)

184.0

(143.6)

(0.2)

(558.1)

117.9

–

(440.2)

88.8

(22.9)

–

65.9

1.7

–

67.6

Tax
losses
$m

221.9

(186.1)

–

35.8

(28.4)

–

7.4

Deferred tax liabilities

Deferred tax assets

Other
temporary
differences
$m

Deferred
petroleum
revenue tax
$m

Provisions
$m

(66.4)

(32.6)

–

(99.0)

40.9

–

21.7

(5.9)

–

15.8

–

(58.1)

15.8

9.4

(5.0)

–

(1.8)

2.6

3.8

0.2

6.6

2023
$m

(420.5)

19.6

(400.9)

Total
$m

(322.9)

(68.5)

(143.6)

(2.0)

(537.0)

135.9

0.2

(400.9)

2022
$m

(551.5)

14.5

(537.0)

1. This relates to an acquisition through business combination discussed in note 15 of the 2022 Annual Report and Accounts.

The majority of the Group’s deferred tax assets and liabilities are expected to be recovered over more than one year.

Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This
involves an assessment of when those deferred tax assets are likely to reverse, and a judgement as to whether or not
there will be sufficient taxable profits available to offset the tax assets when they do reverse. This requires assumptions
regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability
change, there can be an increase or decrease in the level of deferred tax assets recognised which can result in a charge
or credit in the period in which the change occurs.

Note 21. Called-up equity share capital and share premium account

Allotted equity share capital and share premium

Ordinary shares of 10p each

At 1 January 2022

Issued during the year

Exercise of share options

At 1 January 2023

Issued during the year

Exercise of share options

At 31 December 2023

The Company does not have a maximum authorised share capital.

Equity share capital
allotted and fully paid

Share
premium

Number

1,432,080,097

214.2

1,294.7

7,525,898

1.0

–

1,439,605,995

215.2

1,294.7

12,935,892

1,452,541,887

1.5

216.7

–

1,294.7

168 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 22. Share-based payments

Analysis of share-based payment charge

Tullow Incentive Plan

Employee Share Award Plan

2022 PDMR buy-out award

2021 Tullow Sharesave Plan

Expensed to operating costs

Expensed as administrative cost

Total share-based payment charge

Notes

2023
$m

2022
$m

3.7

1.4

0.5

0.4

6.0

0.4

5.6

6.0

3.9

1.2

0.5

0.2

5.8

0.4

5.4

5.8

The national insurance liability as at 31 December 2023 was $1.9 million (2022: $1.6 million).

Tullow Incentive Plan (TIP)
Under the TIP, senior management can be granted nil exercise price options, normally exercisable from three years (five
years in the case of the Company’s Directors) to ten years following grant provided an individual remains in employment.
The size of awards depends on both annual performance measures and total shareholder return (TSR) over a period of up
to three years. There are no post-grant performance conditions. No dividends are paid over the vesting period; however,
it has been agreed for the TIP Awards since 2018 that an amount equivalent to the dividends that would have been paid
on the TIP shares during the vesting period if they were ‘real’ shares will also be payable on exercise of the award. There
are further details of the TIP in the Remuneration Report on pages 89 to 113.

The weighted average remaining contractual life for TIP awards outstanding at 31 December 2023 was 6.6 years.

Employee Share Award Plan (ESAP)
Most Group employees are eligible to be granted nil exercise price options, that are exercisable from three to ten years
following grant. An individual must normally remain in employment for three years from grant for the share to vest. Awards
are not subject to post-grant performance conditions. No dividends are paid over the vesting period; however, it has been
agreed for the ESAP awards granted since 2018 that an amount equivalent to the dividends that would have been paid on the
ESAP shares during the vesting period if they were ‘real’ shares will also be payable on exercise of the award.

Phantom options that provide a cash bonus equivalent to the gain that could be made from a share option (being granted
over a notional number of shares) have also been granted under the ESAP in situations where the grant of share options was
not practicable.

The weighted average remaining contractual life for ESAP awards outstanding at 31 December 2023 was 7.1 years.

2010 Share Option Plan (2010 SOP)
Participation in the 2010 SOP was available to most of the Group’s employees. Options have an exercise price equal to
market value shortly before grant and are normally exercisable between three and ten years from the date of the grant
subject to continuing employment.

Phantom options, providing a cash bonus equivalent to the gain that could be made from a share option, have also been
granted under the 2010 SOP in situations where the grant of share options was not practicable.

All remaining options under the SOP expired during 2023 and so there were no outstanding options under the SOP at
31 December 2023.

2020 PDMR buy-out awards
On 5 August 2020, the Company granted the new Chief Executive Officer a number of Buyout Awards following the
commencement of their employment in order to compensate them for certain share arrangements forfeited upon leaving
their former employer. The grant of the awards was conditional on the CEO purchasing shares in the Company with a value of
£350,000 (the Purchased Shares). These awards will vest after five years from the date of joining subject to continued service
and the retention of the Purchased Shares. The awards comprise: a restricted share award in the form of a nil-cost option over
3,000,000 shares; a share option over 3,000,000 shares with a per share exercise price of £0.2566 (being equal to the market
value of a share at the close of trading on the dealing date immediately following the date on which the Purchased Shares were
acquired); and a share option over 3,000,000 shares with a per share exercise price of £0.5132 (being twice the exercise price for
the above options).

Tullow Oil plc Annual Report and Accounts 2023 – 169

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 22. Share-based payments continued

2020 PDMR buy-out awards continued
The awards will ordinarily vest on 1 July 2025 and if they remain unexercised will expire on 1 July 2030. There are further details of
the 2020 PDMR Buyout Awards in the Remuneration Report on pages 89 to 113.

The weighted average remaining contractual life for the PDMR Buyout Awards outstanding at 31 December 2023 was 6.5 years.

2021 Tullow Sharesave Plan (SAYE)
UK-based employees are eligible to participate in the SAYE scheme introduced in 2021. These are standard statutory
HMRC approved ‘Save as you earn’ awards. To participate in the SAYE, employees choose how much money of their net
salary to save each month (subject to certain limits) for a period of three years. At the end of the period employees are
entitled to purchase shares using the funds they have saved at a price 20% below the market price on the day before the
invitation date. Alternatively, they can elect to take back all their savings as cash. Only employees who remain in service
and continue to pay monthly contributions will be eligible to purchase shares. If they leave employment or choose to stop
paying contributions before the end of the three-year period they will be refunded the amount they have saved.

Outstanding SAYE awards at 31 December 2023 had exercise prices of 29p to 40p and remaining contractual lives
between 1.4 years and 3.4 years. The weighted average remaining contractual life is 2.2 years.

UK and Irish Share Incentive Plans (SIPs)
These are all-employee plans set up in the UK and Ireland, to enable employees to save out of salary up to prescribed
monthly limits. Contributions are used by the SIP trustees to buy Tullow shares (Partnership Shares) at the end of each
three-month accumulation period. The Company makes a matching contribution to acquire Tullow shares (Matching
Shares) on a one-for-one basis. Under the UK SIP, Matching Shares are subject to time-based forfeiture over three years
on leaving employment in certain circumstances or if the related Partnership Shares are sold. The fair value of a Matching
Share is its market value when it is awarded.

Under the UK SIP: (i) Partnership Shares are purchased at the lower of their market values at the start of the accumulation
period and the purchase date (which is treated as a three-month share option for IFRS 2 purposes and therefore results
in an accounting charge); and (ii) Matching Shares vest over the three years after being awarded (resulting in their
accounting charge being spread over that period).

Under the Irish SIP: (i) Partnership Shares are bought at the market value at the purchase date (which does not result
in any accounting charge); and (ii) Matching Shares vest over the two years after being awarded (resulting in their
accounting charge being spread over that period).

Tullow Executive Share Plan (LTIP)
Under the LTIP, senior management can be granted nil exercise price options, normally exercisable between 2.5 to 10
years following grant (with a two-year holding period in the case of the Company’s Directors). Awards granted in 2023
vest subject to Total Shareholder Return (TSR) performance conditions, with 50% of an award subject to an Absolute
TSR performance condition (where the Company’s TSR is tested against targets set by the Remuneration Committee),
and the remaining 50% subject to a relative TSR condition (where the Company’s TSR is compared to the companies
in a Selected Peer Group). Performance is measured over a fixed three-year period of three consecutive financial years
starting with the financial year in which the award is made. The average share price over each weekday within the
previous three months is calculated at the start and at the end of the Performance period. The TSR is calculated from
these averages. An individual must also normally remain in employment to the vesting date in order for the shares to
vest. No dividends are paid over the vesting period; however, it has been agreed for the 2023 LTIP awards that an amount
equivalent to the dividends that would have been paid on the LTIP shares during the vesting period if they were ‘real’
shares will also be payable on exercise of the award. There are further details of the 2023 Tullow Executive Share Plan
(LTIP) awards in the Remuneration Report on pages 89 to 113.

The weighted average remaining contractual life for LTIP awards outstanding at 31 December 2023 was 9.5 years.

170 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 22. Share-based payments continued

Tullow Executive Share Plan (LTIP) continued
The following table illustrates the number and average weighted share price at grant or weighted average exercise price
(WAEP) of, and movements in, share options under the TIP, ESAP, 2010 SOP, 2020 buyout and SAYE.

Outstanding
as at
1 January

Granted
during
the year

Exercised
during
the year

Forfeited/
expired during
the year

Outstanding
at
31 December

Exercisable
at
31 December

number of shares

24,854,248

9,455,309

7,291,530

328,764

26,689,263

6,053,704

average weighted share
price at grant

68.4

32.0

75.8

226.3

51.5

number of shares

21,740,803

8,076,264

4,529,667

433,152

24,854,248

3,014,253

average weighted share
price at grant

105.3

49.1

211.6

64.4

68.4

220.0

number of shares

17,330,077

6,798,244

5,578,281

468,947

18,081,093

8,146,742

average weighted share
price at grant

76.4

32.3

59.9

32.6

66.0

100.2

number of shares

17,638,898

3,556,316

2,803,974

1,061,163

17,330,077

4,613,422

49.3

180.0

76.4

228.5

2023 Buyout Awards – number of shares

2023 Buyout Awards – WAEP

2022 Buyout Awards – number of shares

9,000,000

2022 Buyout Awards – WAEP

average weighted share
price at grant

number of shares

WAEP

number of shares

WAEP

number of shares

average weighted share
price at grant

number of shares

average weighted share
price at grant

96.5

178,283

976.4

2,046,755

1,106.0

9,000,000

25.7

–

12,241,264

27.7

–

number of options

1,534,241

975,600

WAEP

38.0

40.0

number of options

1,534,241

975,600

WAEP

38.0

40.0

45.2

178,283

976.4

1,868,472

1,118.4

–

178,283

976.4

9,000,000

25.7

9,000,000

25.7

12,241,264

27.7

–

121,970

2,387,871

38.2

38.8

121,970

2,387,871

38.2

38.8

–

178,283

976.4

–

2023 TIP –

2022 TIP –

2023 ESAP –

2022 ESAP –

2023 SOP –

2022 SOP –

2023 LTIP

2022 LTIP

2023 SAYE –

2022 SAYE –

The options granted during the year were valued using Monte Carlo simulation models for the LTIP and a proprietary
binomial valuation for the TIP, ESAP and SAYE.

Tullow Oil plc Annual Report and Accounts 2023 – 171

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 22. Share-based payments continued

Tullow Executive Share Plan (LTIP) continued
The following table details the weighted average fair value of awards granted and the assumptions used in the fair value
expense calculations.

Weighted average fair value of awards granted

13.4p 32.0p

49.3p

32.0p

49.1p

20.5p

23.1p

2023 LTIP

2023
ESAP

2022 ESAP

2023 TIP

2022 TIP 2023 SAYE 2022 SAYE

Principal inputs to options valuations model:

Weighted average share price at grant

27.7p 32.0p

Weighted average exercise price

Risk-free interest rate per annum1

Expected volatility per annum1,2

Expected award life (years)1,3

Dividend yield per annum4

Employee turnover before vesting per annum1

0.0p

5.0%

63%

2.7

n/a

0.0p

49.3p

0.0p

32.0p

0.0p

49.1p

0.0p

3.5% 1.5% to 4.4%

3.5% 1.5%/1.5%

89% 101% to 102% 89%/84%

102%/85%

3.0

n/a

3.0

3.0/5.0

n/a

5%/0%

32.3p

29.0p

4.5%

92%

3.6

0.0%

38.4p

40.0p

4.3%

91%

3.6

0.0%

1. Shows the assumption for 2023 and 2022 LTIP awards made to senior management/Executives and Directors respectively.

2. Expected volatility was determined by calculating the historical volatility of the Company’s share price over a period commensurate with the expected
life of the awards. The fair values of the 2023 ESAP and TIP Awards, and the 2022 TIP Awards are not affected by the assumption for the Company’s
share price volatility.

3. The expected life is the average expected period from date of grant to exercise allowing for the Company’s best estimate of participants’ expected

exercise behaviour.

4. No dividend yield assumption is needed for the fair value calculations for the 2023 LTIP, ESAP and TIP Awards as a dividend equivalent will be payable

on the exercise of these awards.

Weighted average share price at exercise for awards exercised

Note 23. Commitments and contingencies

Capital commitments

Contingent liabilities

Performance guarantees

Other contingent liabilities

2023
ESAP

32.3p

2023
TIP

32.8p

2023
$m

207.0

42.7

84.4

127.1

2022
$m

301.2

84.1

55.8

139.9

Where Tullow acts as operator of a Joint Venture the capital commitments reported represent Tullow’s net share of
these commitments. Where Tullow is non-operator the value of capital commitments is based on committed future
work programmes.

Performance guarantees are in respect of abandonment obligations, committed work programmes and certain
financial obligations.

Other contingent liabilities include amounts for ongoing legal disputes with third parties where we consider the likelihood
of a cash outflow to be higher than remote but not probable. The timing of any economic outflow if it were to occur
would likely range between one and five years.

The movement in capital commitments is predominantly due to lower capital expenditure budget in Ghana after the
start-up of Jubilee South East project in 2023.

172 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 24. Related party transactions
The Directors of Tullow Oil plc are considered to be the only Key Management Personnel as defined by IAS 24 Related
Party Disclosures.

Short-term employee benefits

Post-employment benefits

Share-based payments

2023
$m

2022
$m

2.7

0.2

1.4

4.3

2.5

0.1

1.4

4.0

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.

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 Payment.

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 89 to 113.

Note 25. Climate change and energy transition
Tullow remains committed to being Net Zero on Scope 1 and Scope 2 emissions on a net equity basis by 2030, providing
support to host country governments in meeting their national targets by reducing GHG emissions. Further information
on the Group’s Net Zero strategy is on page 33.

This note describes how the Group has considered climate-related impacts in key areas of the Financial Statements
and how this translates into the valuation of assets and measurement of liabilities as Tullow make progress in the energy
transition.

Note (af) key sources of estimation uncertainties describes those uncertainties that have the potential to have a material
effect on the Group Balance Sheet in the next 12 months.

This note describes the key areas of climate impacts that potentially have short and longer-term effects on amounts
recognised on the Group Balance Sheet as at 31 December 2023. Where relevant this note contains references to other
notes to the Group Financial Statements, and sections of the Task Force on Climate-related Financial Disclosures (TCFD),
to provide an overarching summary.

Financial planning assumptions
Tullow targets being Net Zero Scope 1 and 2 emissions by 2030, on a net equity basis, with an interim target of 40%
reduction in emissions by 2025, these metrics have been included in the Group’s business plan. The Financial Statements
are based on reasonable and supportable assumptions that represent management’s current best estimate of the range
of economic conditions that may exist in the foreseeable future.

The Group has performed an assessment of the potential future impact of climate change on key elements of its
Financial Statements utilising three IEA scenarios (see TCFD on pages 38 to 47 for details).

Tullow continues to assess operating cash flow (OCF) impact on our currently producing assets using the oil price
assumptions within the IEA scenarios which are detailed on pages 43 to 45 of the TCFD.

The impact of acute and chronic physical climate risks on our existing assets are also assessed and meteorological and
climate conditions are incorporated into operational design considerations, please refer to the TCFD on pages 38 to 47
for probabilities, potential exposures, and mitigations.

While carbon prices are projected to grow, there is low likelihood that there will be a substantive impact on the Group’s
core geographies in the medium term. Tullow runs shadow carbon price sensitivities for any new investment decisions
and business planning cycles, using an internal shadow carbon price of $25/tCO2e which is in line with the NZE carbon
price for other emerging market and developing economies.

Tullow Oil plc Annual Report and Accounts 2023 – 173

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 25. Climate change and energy transition continued

Financial planning assumptions continued
To address hard to abate residual emissions, Tullow is developing a nature-based carbon offset project with the Forestry
Commission of Ghana which is expected to progress towards FID in 2024. The carbon price sensitivity and costs for
nature-based carbon offset projects are not included in the value in use calculation of the recoverable amount of the
Group CGUs as expected cash flows associated with current nature based solutions are not directly attributable to the
asset CGUs.

Pricing assumptions used will continue to be updated for changes in the economic environment and the pace of the
energy transition. Tullow will continue to use the ‘Net Zero Emissions by 2050 Scenario’ to assess potential financial
impacts on intangible exploration and evaluation asset write-offs, impairments of property, plant and equipment, and
decommissioning timelines. These are detailed on pages 38 to 47 of the TCFD.

Governmental and societal responses to climate change risks are still developing, and are interdependent upon each
other, and consequently financial statements cannot capture all possible future outcomes as these are not yet known.

Note 26. Events since 31 December 2023
Gabon – On 29 February 2024, Tullow completed the Asset Swap agreement (ASA) transaction (discussed in note
14. Assets and liabilities classified as held for sale) with Perenco Oil and Gas Gabon S.A (Perenco). The transaction is
a cashless asset swap to be achieved through the exchange of participating interests held by both parties in certain
licences in Gabon. Management have determined that the acquisition of the additional interest in the Tchatamba licence
is a Business Combination and the financial impacts cannot be disclosed in the Annual Report and Accounts as the
measurement of the assets acquired is now underway. Accordingly, the relevant disclosure will be made in the 2024 half
year results.

Kenya – On 1 March 2024 Tullow received a letter from the EPRA extending the review period of the updated Field
Development Plan to 30 June 2024.

There have not been any other events since 31 December 2023 that have resulted in a material impact on the year-end results.

Note 27. Cash flow statement reconciliations

Purchases of intangible exploration and evaluation assets

Additions to intangible exploration and evaluation assets

Associated cash flows

Purchases of intangible exploration and evaluation assets

Non-cash movements/presented in other cash flow lines

Movement in working capital

Purchases of property, plant and equipment

Additions to property, plant and equipment

Associated cash flows

Purchases of property, plant and equipment

Non-cash movements/presented in other cash flow lines

Decommissioning asset revisions

Right-of-use asset additions

Movement in working capital

Movement in borrowings

Borrowings

Associated cash flows

Debt arrangement fees

Repayment of borrowings

Drawdown of borrowings

Non-cash movements/presented in other cash flow lines

Gain on bond buyback

Amortisation of arrangement fees and accrued interest

174 – Tullow Oil plc Annual Report and Accounts 2023

2023
$m

25.4

2022
$m

39.2

(30.2)

(42.6)

4.8

3.4

2023
$m

499.5

2022
$m

370.7

(262.3)

(263.8)

(47.8)

(81.1)

(108.3)

19.9

(63.5)

(63.3)

2023
$m

2022
$m

2021
$m

2023
Movement

2022
Movement

2,084.6

2,472.8

2,568.7

(388.2)

(95.9)

(5.0)

–

(432.2)

(100.0)

129.7

(86.0)

5.3

–

4.1

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 28. Dividends
In 2023, the Board recommended that no interim or final dividend would be paid.

Note 29. Tullow Oil plc subsidiaries

As at 31 December 2023
Each undertaking listed below is a subsidiary by virtue of Tullow Oil plc holding, directly or indirectly, a majority of voting
rights in the undertaking. The ownership percentages are equal to the effective equity owned by the Group. Unless
otherwise noted, the share capital of each undertaking comprises ordinary shares or the local equivalent thereof.

The percentage of equity owned by the Group is 100% unless otherwise noted. The results of all undertakings listed
below are fully consolidated in the Group’s Financial Statements.

Direct or indirect

Address of registered office

Company name

Country of
incorporation

Hardman Resources Pty Ltd

Australia

Tullow Chinguetti Production Pty Ltd Australia

Tullow Petroleum (Mauritania) Pty Ltd Australia

Tullow Uganda Operations Pty Ltd

Australia

Indirect

Eagle Drill Limited

British Virgin Islands

Indirect (50%)

Tullow (EA) Holdings Limited

British Virgin Islands

Indirect

DWT-T Company

Cayman Islands

Indirect

Tullow Argentina Limited

England and Wales

Indirect

Tullow Comoros Limited

England and Wales

Indirect

Tullow Côte d’Ivoire Onshore Limited England and Wales

Indirect

Tullow Group Services Limited

England and Wales

Direct

Tullow Jamaica Limited1

England and Wales

Indirect

Tullow New Ventures Limited

England and Wales

Indirect

Tullow Mozambique Limited

England and Wales

Indirect

Tullow Oil 100 Limited2

England and Wales

Direct

Tullow Oil 101 Limited1

England and Wales

Direct

Tullow Oil Finance Limited

England and Wales

Direct

Tullow Oil SK Limited

England and Wales

Direct

Tullow Oil SPE Limited

England and Wales

Direct

Tullow Peru Limited

England and Wales

Indirect

Tullow Technologies Limited2

England and Wales

Indirect

Tullow Uruguay Limited

England and Wales

Indirect

Tullow Oil Gabon SA

Gabon

Indirect

1. Dissolved 30 January 2024.

2. Dissolved 27 June 2023.

Level 9, 1 William Street, Perth WA 6000, Australia

Akara Building, 24 De Castro Street, Wickhams Cay,
Road Town, Tortola, British Virgin Islands

Ritter House, Wickhams Cay, Tortola, VG1110,
British Virgin Islands

PO Box 32322, 4th Floor Century Yard, Cricket
Square, George Town, KY1-1209, Cayman Islands

9 Chiswick Park, 566 Chiswick High Road,
London W4 5XT, United Kingdom

Quartier Tahiti, Immeuble Narval B.P. 9773,
Libreville, Gabon

Tullow Oil plc Annual Report and Accounts 2023 – 175

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 29. Tullow Oil plc subsidiaries continued

As at 31 December 2023 continued

Company name

Tullow Oil (Mauritania) Ltd

Tullow Oil Limited

Tullow Congo Limited

Country of
incorporation

Guernsey

Ireland

Isle of Man

Direct or
indirect

Indirect

Direct

Indirect

Tullow Gabon Holdings Limited

Isle of Man

Indirect

Tullow Gabon Limited

Isle of Man

Indirect

Tullow Mauritania Limited

Isle of Man

Indirect

Tullow Namibia Limited

Isle of Man

Indirect

Tullow Uganda Limited

Isle of Man

Indirect

Tullow Côte d’Ivoire Exploration Limited3

Jersey

Tullow Côte d’Ivoire Limited

Tullow Ghana Limited

Tullow India Operations Limited

Tullow Oil (Jersey) Limited

Tullow Oil International Limited

Jersey

Tullow Ethiopia BV4

Netherlands

Indirect

Direct

Indirect

Tullow Guyana BV5

Netherlands

Indirect

Tullow Hardman Holdings BV

Netherlands

Indirect

Tullow Kenya BV

Netherlands

Indirect

Tullow Overseas Holdings BV

Netherlands

Direct

Tullow Suriname BV

Netherlands

Indirect

Tullow Uganda Holdings BV6

Netherlands

Indirect

Tullow Zambia BV

Netherlands

Indirect

Tullow Oil Norge AS7

Norway

Energy Africa Bredasdorp (Pty) Ltd

South Africa

Indirect

Tullow South Africa (Pty) Limited

South Africa

Indirect

Address of registered office

P.O. Box 119, Martello Court, Admiral Park,
St. Peter Port GY1 3HB, Guernsey

11 Adelaide Road, Dublin 2, Dublin, Ireland

First Names House, Victoria Road,
Douglas IM2 4DF, Isle of Man

44 Esplanade, St Helier JE4 9WG, Jersey

9 Chiswick Park, 566 Chiswick High Road,
London W4 5XT, United Kingdom

Prinses Margrietplantsoen 33,
2595AM ’s-Gravenhage, The Netherlands

9 Chiswick Park, 566 Chiswick High Road,
London W4 5XT, United Kingdom

Tordenskioldsgate 6B, 0160 Oslo, Norway

Maitland House 1 – River Park, Gloucester Road,
Mowbray, Western Cape 7700, South Africa

T.U. S.A.

Uruguay

Indirect

Colonia 810, Of. 403, Montevideo, Uruguay

3. Dissolved 24 September 2023.

4. Dissolved 22 December 2023.

5. Sold 16 November 2023.

6. Dissolved 22 September 2023.
7. Dissolved 29 March 2023.

176 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Note 30. Licence interests

Current exploration, development and production interests

Ghana

Licence/Unit area

Fields

Deepwater Tano
TEN Development Area

Wawa, Tweneboa,
Enyenra, Ntomme

Area
sq km

Tullow

interest Operator

619

54.84% Tullow

West Cape Three Points

Jubilee

150

25.66% Tullow

Jubilee Field Unit Area1

Jubilee, Mahogany, Teak

38.98% Tullow

Other partners

Kosmos, KEGIN, GNPC,
Jubilee Oil Holdings, Petro SA

Kosmos, KEGIN, GNPC, Jubilee Oil
Holdings, Petro SA

1. A unitisation agreement covering the Jubilee field was agreed by the partners of the West Cape Three Points and the Deepwater Tano licences. The
Jubilee Unit Area was expanded in 2017 to include the Mahogany and Teak fields. It now includes all of the remaining part of the West Cape Three
Points licence and a small part of the Deepwater Tano licence.

Non-Operated

Licence/Unit area

Fields

Côte d’Ivoire

Area
sq km

Tullow

interest Operator

CI-26 Special Area ‘E’

Espoir

235

21.33% CNR

Other partners

Petroci

Gabon

Avouma

DE82

Ebouri

Echira

Etame

Ezanga

Gwedidi

Mabounda

Maroc

Maroc Nord

Mbigou

Niembi

Niungo

Omko

Onal

Simba2

Avouma, South Tchibala

7.50% Vaalco

Addax (Sinopec), Sasol, PetroEnergy

DE8

Ebouri

Echira

Etame, North Tchibala

2,393

40.00% Perenco

7.50% Vaalco

Addax (Sinopec), Sasol, PetroEnergy

40.00% Perenco

Gabon Oil Company

7.50% Vaalco

Addax (Sinopec), Sasol, PetroEnergy

Gwedidi

Mabounda

Maroc

Maroc Nord

Mbigou

Niembi

Niungo

Omko

Onal

Simba

5,626

8.57% Maurel & Prom

315

7.50% Maurel & Prom

40.00% Perenco

7.50% Maurel & Prom

40.00% Perenco

Gabon Oil Company

Tchatamba Marin2

Tchatamba Marin

Tchatamba South2

Tchatamba South

Tchatamba West2

Tchatamba West

2. Subject to completion of the asset swap deal announced in April 2023 (refer to note 14 above).

Tullow Oil plc Annual Report and Accounts 2023 – 177

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 30. Licence interests continued

Kenya

Licence

Kenya

Block 10BA3

Block 10BB3

Block 12B

Block 13T3

Exploration

Fields

Area
sq km

Tullow

interest Operator

Other partners

Amosing, Ngamia

6,172

100.00% Tullow

11,569

100.00% Tullow

6,200

100.00% Tullow

Ekales, Twiga

4,719

100.00% Tullow

Licence/Unit area

Fields

Argentina

Block MLO-114

Block MLO-119

Block MLO-122

Côte d’Ivoire

CI-524

CI-803

Area
sq km

5,942

4,546

4,420

Tullow

interest Operator

40.00% Tullow

100.00% Tullow

551

1,345

90.00% Tullow

Other partners

Pluspetrol, Wintershall Dea

Petroci

3. Subject to Government of Kenya consent (refer to note 8 above).

178 – Tullow Oil plc Annual Report and Accounts 2023

Notes to the Group Financial Statements continuedYear ended 31 December 2023Strategic report

Corporate governance

Financial statements

Supplementary information

Company balance sheet
As at 31 December 2023

ASSETS

Non-current assets

Investments

Current assets

Other current assets

Cash at bank

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Borrowings

Derivative financial instruments

Non-current liabilities

Borrowings

Derivative financial instruments

Total liabilities

Net assets

Capital and reserves

Called-up share capital

Share premium

Foreign currency translation reserve

Merger reserves

Retained earnings

Total equity

During the year the Company made a loss of $68.0 million (2022: $179.5 million loss).

Approved by the Board and authorised for issue on 5 March 2024.

Rahul Dhir
Chief Executive Officer
5 March 2024

Richard Miller
Chief Financial Officer
5 March 2024

Notes

2023
$m

2022
$m

4,484.2

4,863.7

5.1

15.9

21.0

9.1

54.5

63.6

4,505.2

4,927.3

(430.6)

(100.0)

(36.4)

(567.0)

(194.4)

(100.0)

(186.3)

(480.7)

(1,984.6)

(2,372.8)

–

(58.2)

(1,984.6)

(2,431.0)

(2,551.6)

1,953.6

(2,911.7)

2,015.6

216.7

1,294.7

194.5

671.5

(423.8)

1,953.6

215.2

1,294.7

194.5

671.5

(360.3)

2,015.6

Tullow Oil plc Annual Report and Accounts 2023 – 179

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Financial statements

Supplementary information

Company statement of changes in equity
Year ended 31 December 2023

As 1 January 2022

Loss for the year

Exercising of employee share options

Share-based payment charges

As 1 January 2023

Loss for the year

Exercising of employee share options

Share-based payment charges

At 31 December 2023

Share
capital
$m

Share
premium
$m

Foreign
currency
translation
reserve
$m

Merger
reserves
$m

Retained
earnings
$m

214.2

1,294.7

194.5

671.5

–

1.0

–

(185.6)

(179.5)

(1.0)

5.8

Total
equity
$m

2,189.3

(179.5)

–

5.8

215.2

1,294.7

194.5

671.5

(360.3)

2,015.6

–

1.5

–

(68.0)

(1.5)

6.0

–

6.0

216.7

1,294.7

194.5

671.5

(423.8)

1,953.6

180 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Company accounting policies
As at 31 December 2023

(a) General information
Tullow Oil plc is a company incorporated in the United
Kingdom under the Companies Act. The address of the
registered office is Tullow Oil plc, Building 9, Chiswick Park,
566 Chiswick High Road, London W4 5XT. The Financial
Statements are presented in US dollars and all values
are rounded to the nearest $0.1 million, except where
otherwise stated. Tullow Oil plc is the ultimate Parent of
the Group.

(b) Basis of preparation
The Company meets the definition of a qualifying entity
under Financial Reporting Standard 100 (FRS 100)
issued by the Financial Reporting Council. The Financial
Statements have therefore been prepared in accordance
with Financial Reporting Standard 101 (FRS 101) Reduced
Disclosure Framework as issued by the Financial
Reporting Council.

The following exemptions from the requirements of IFRS
have been applied in the preparation of these Financial
Statements, in accordance with FRS 101:

• Paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based

Payment (details of the number and weighted average
exercise prices of share options, and how the fair value
of goods or services received was determined).

• IFRS 7 Financial Instruments: Disclosures.

• Paragraphs 91 to 99 of IFRS 13 Fair Value Measurement
(disclosure of valuation techniques and inputs used for
fair value measurement of assets and liabilities).

• Paragraph 38 of IAS 1 Presentation of Financial

Statements – comparative information requirements in
respect of certain assets.

The following paragraphs of IAS 1 Presentation of Financial
Statements:

• 10(d) (statement of cash flows).

• 111 (cash flow statement information).

• 134–136 (capital management disclosures).

• IAS 7 Statement of Cash Flows.

• Paragraphs 30 and 31 of IAS 8 Accounting Policies,

Changes in Accounting Estimates and Errors.

• Paragraph 17 of IAS 24 Related Party Disclosures (key

management compensation).

• The requirements in IAS 24 Related Party Disclosures,
to disclose related party transactions entered into
between two or more members of a group. Where
relevant, equivalent disclosures have been given in the
Group accounts.

The Financial Statements have been prepared on the
historical cost basis, except for derivative financial
instruments that have been measured at fair value.

The Company has applied the exemption from the
requirement to publish a separate profit and loss account
for the Parent Company set out in section 408 of the
Companies Act 2006.

During the year the Company made a loss of $68.0 million
(2022: $179.5 million loss).

(d) Foreign currencies
The US dollar is the functional and presentational currency
of the Company. Transactions in foreign currencies are
translated at the rates of exchange ruling at the transaction
date. Monetary assets and liabilities denominated in
foreign currencies are translated into US dollars at the
rates of exchange ruling at the balance sheet date, with a
corresponding charge or credit to the income statement.
However, exchange gains and losses arising on long-term
foreign currency borrowings, which are a hedge against
the Company’s overseas investments, are dealt with
in reserves.

(e) Share-based payments
The Company has applied the requirements of IFRS 2
Share-based Payments. The Company has share-based
awards that are equity settled and cash settled as defined
by IFRS 2. The fair value of the equity settled awards
has been determined at the date of grant of the award
allowing for the effect of any market-based performance
conditions. This fair value, adjusted by the Company’s
estimate of the number of awards that will eventually vest
as a result of non-market conditions, is expensed uniformly
over the vesting period.

(f) Investments
Investments in subsidiaries are accounted for at cost less
any provision for impairment.

Tullow Oil plc Annual Report and Accounts 2023 – 181

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Corporate governance

Financial statements

Supplementary information

Company accounting policies continued
As at 31 December 2023

(g) Financial assets
The Company classifies its financial assets in the following
categories: at fair value through profit or loss; and loans
and receivables. The classification depends on the
purpose for which the financial assets were acquired.

Management determines the classification of its financial
assets at initial recognition. As of 31 December 2023, all
financial assets were classified at amortised cost.

Assets are classified and measured at amortised cost when
the business model of the Company is to collect contractual
cash flows and the contractual terms give rise to cash flows
that are solely payments of principal and interest. These
assets are carried at amortised cost using the effective
interest method if the time value of money is significant.
Gains and losses are recognised in profit or loss when the
assets are derecognised, modified or impaired.

(h) Financial liabilities
The measurement of financial liabilities is determined by
the initial classification.

i) Financial liabilities at fair value through profit

or loss:

Intercompany derivative liabilities fall under this category
of financial instruments.

ii) Financial liabilities measured at amortised cost:
All financial liabilities not meeting the criteria of being
classified at fair value through profit or loss are classified
as financial liabilities measured at amortised cost. The
instruments are initially recognised at their fair value net
of transaction costs that are directly attributable to the
issue of financial liability. Subsequent to initial recognition,
financial liabilities are measured at amortised cost using
the effective interest method.

Borrowings and trade creditors fall under this category of
financial instruments.

(i) Share issue expenses
Costs of share issues are written off against the premium
arising on the issues of share capital.

(j) Finance costs of debt
Finance costs of debt are recognised in the profit and loss
account over the term of the related debt at a constant
rate on the carrying amount.

Interest-bearing borrowings are recorded as the proceeds
received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption
and direct issue costs, are accounted for on an accruals
basis in the income statement using the effective interest
method and are added to the carrying amount of the
instrument to the extent that they are not settled in the
period in which they arise.

(k) Taxation
Current and deferred tax, including UK corporation tax
and overseas corporation tax, are provided at amounts
expected to be paid using the tax rates and laws that have
been enacted or substantively enacted by the balance
sheet date. Deferred corporation tax is recognised on
all temporary differences that have originated but not
reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or right to
pay less, tax in the future have occurred at the balance
sheet date. Deferred tax assets are recognised only to the
extent that it is considered more likely than not that there
will be suitable taxable profits from which the underlying
temporary differences can be deducted. Deferred tax is
measured on a non-discounted basis.

(l) Capital management
The Company defines capital as the total equity of the
Company. Capital is managed in order to provide returns
for shareholders and benefits to stakeholders and to
safeguard the Company’s ability to continue as a going
concern. Tullow is not subject to any externally imposed
capital requirements. To maintain or adjust the capital
structure, the Company may adjust the dividend payment
to shareholders, return capital, issue new shares for cash,
repay debt, and put in place new debt facilities.

182 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

(m) Critical accounting judgements and key
sources of estimation uncertainty

The Group assesses critical accounting judgements
annually. The following are the critical judgements, apart
from those involving estimations which are dealt with in
policy (af), that the Directors have made in the process of
applying the Group’s accounting policies and that have the
most significant effect on the amounts recognised in the
Financial Statements.

Investments (note 1):
The Company is required to assess the carrying values of
each of its investments in subsidiaries for impairment. The
net assets of certain of the Company’s subsidiaries are
predominantly intangible exploration and evaluation (E&E)
and property, plant and equipment assets.

Where facts and circumstances indicate that the carrying
amount of an E&E asset held by a subsidiary may exceed
its recoverable amount, by reference to the specific
indicators of impairment of E&E assets, an impairment test
of the asset is performed by the subsidiary undertaking
and the asset is impaired by any difference between its
carrying value and its recoverable amount. The recognition
of such an impairment by a subsidiary is used by the
Company as the primary basis for determining whether or
not there are indications that the investment in the related
subsidiary may also be impaired, and thus whether an
impairment test of the investment carrying value needs
to be performed. The results of exploration activities are
inherently uncertain and the assessment of impairment
of E&E assets by the subsidiary, and that of the related
investment by the Company, is judgemental.

For property, plant and equipment, the value of assets/
fields supporting the investment value is assessed by
estimating the discounted future cash flows based on
management’s expectations of future oil and gas prices
and future costs.

In order to discount the future cash flows the Group
calculates CGU-specific discount rates. The discount rates
are based on an assessment of a relevant peer group’s
post-tax weighted average cost of capital (WACC). The
post-tax WACC is subsequently grossed up to a pre-
tax rate. The Group then deducts any exploration risk
premium which is implicit within a peer group’s WACC and
subsequently applies additional country risk premium for
all CGUs, an element of which is determined by whether
the assets are onshore or offshore. Refer to notes 8 and 9
to the Group Financial Statements.

Where there is evidence of economic interdependency
between fields, such as common infrastructure, the fields
are grouped as a single CGU for impairment purposes.

Refer to note 1 for sensitivities.

Tullow Oil plc Annual Report and Accounts 2023 – 183

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Corporate governance

Financial statements

Supplementary information

Notes to the Company Financial Statements
Year ended 31 December 2023

Note 1. Investments

Subsidiary undertakings

2023
$m

4,484.2

2022
$m

4,863.7

The movement in Company’s investment in subsidiaries of $379.5 million (2022: $163.1 million) is due to additions of
$245.1 million (2022: $665.6 million) and impairment charge of $624.6 million (2022: $502.5 million impairment charge)
which was recognised against the Company’s investments in subsidiaries in relation to losses incurred by Group service
companies and exploration companies and reduction to the underlying value of the Group’s production companies.
(Refer to notes 8 and 9 in the Notes to the Group Financial Statements.)

Tullow Group Services Limited

Tullow Overseas Holdings B.V.

Tullow Oil SPE Limited

Tullow Gabon Holdings Limited

Tullow Oil Finance Limited

Total

Trigger for
2023
impairment

2023
Impairment/
(reversal)
$m

2023
Remaining
recoverable
amount
$m

2022
Impairment
$m

2022
Remaining
recoverable
amount
$m

a,b

n/a

5.7

764.5

(112.8)

–

(32.8)

624.6

–

4,261.5

178.1

11.8

32.8

5.4

497.1

–

4,786.6

–

65.3

11.8

–

4,484.2

502.5

4,863.7

a. Reduction in net asset value as a result of impairment of direct and indirect subsidiaries.

Impact of loss-making subsidiaries.

Impairment reversal due to increased net asset value of a direct subsidiary.

The Company’s subsidiary undertakings as at 31 December 2023 are listed on pages 175 to 176. The principal activity of all
companies relates to oil and gas exploration, development and production.

Sensitivities
The value of property, plant and equipment and E&E assets supporting the investment value will be affected by the potential
future changes to oil prices and discount rates. All impairment assessments are prepared on a VIU basis using discounted
future cash flows based on 2P reserves profiles. A reduction or increase in the two-year forward curve of $5/bbl, based on
the approximate range of annualised average oil price over recent history, and a reduction or increase in the medium and
long-term price assumptions of $5/bbl, based on the range of annualised average historical prices, are considered to be
reasonably possible changes for the purposes of sensitivity analysis. Decreases to oil prices specified in note 9 to the Group
Financial Statements would increase the investment impairment charge by $460.7 million, whilst increases to oil prices
specified above would result in a credit to the investment impairment charge of $459.2 million. A 1% change in the pre-tax
discount rate would increase the impairment by $196.0 million. The Company believes a 1% change in the pre-tax discount
rate to be a reasonable possibility based on historical analysis of the Company’s and peer group of companies’ impairments.

Climate change
The value of property, plant and equipment and E&E assets supporting the investment value will be affected by
the potential future impact of Climate Change. The Company estimates that the impact on oil and carbon prices
as contained in the NZE scenarios on the value of assets held by subsidiaries could result in a potential write-off of
investments of up to $1,280.4 million. Refer to note 25 to the Group Financial Statements.

Note 2. Deferred tax
The Company has tax losses of $1,306.0 million (2022: $1,289.5 million) that are available indefinitely for offset against
future non-ring-fenced taxable profits in the Company. A deferred tax asset of $nil (2022: $nil) has been recognised
in respect of these losses on the basis that the Company does not anticipate making non-ring-fenced profits in the
foreseeable future.

184 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 3. Other current assets

Amounts falling due within one year

Other debtors

Due from subsidiary undertaking

2023
$m

0.9

4.2

5.1

2022
$m

4.9

4.2

9.1

The amounts due from subsidiary undertaking relates to a balance from Tullow Overseas Holdings B.V.. The balance accrues
no interest and is repayable on demand. At 31 December 2023 a provision of $nil (2022: $nil) was held in respect of the
recoverability of amounts due from subsidiary undertaking.

Note 4. Trade and other payables

Amounts falling due within one year

Accrued interest

Accruals

Due to subsidiary undertakings

Note 5. Borrowings

Current

Borrowings – within one year

10.25% Senior Secured Notes due 2026

Non-current

Borrowings – after one year but within five years

7.00% Senior Notes due 2025

10.25% Senior Secured Notes due 2026

Secured Notes Facility due 2028

Carrying value of total borrowings

2023
$m

33.3

7.7

389.6

430.6

2022
$m

40.9

9.0

144.5

194.4

2023
$m

2022
$m

100.0

489.0

1,371.0

124.6

1,984.6

2,084.6

792.8

1,580.0

–

2,372.8

2,472.8

The Company’s capital structure includes $1,485 million Senior Secured Notes (2026 Notes), $493 million Senior Notes
(2025 Notes), a $400 million Secured Notes Facility and a $500 undrawn million Super Senior Revolving Credit Facility
(SSRCF) which will primarily be used for working capital purposes.

The 2026 Notes, maturing in May 2026, require an annual prepayment of $100 million, in May, of the outstanding principal
amount plus accrued and unpaid interest, with the balance due on maturity.

On 15 May 2023, the Company made a mandatory prepayment of $100 million of the 2026 Notes.

On 20 June 2023, the Company repurchased $167 million nominal value of 2025 Notes for $100 million cash
consideration through an Unmodified Dutch Auction. A gain on early bond buyback of $65 million is recognised as other
income in the income statement.

Tullow Oil plc Annual Report and Accounts 2023 – 185

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Corporate governance

Financial statements

Supplementary information

Notes to the Company Financial Statements continued
Year ended 31 December 2023

Note 5. Borrowings continued
On 13 November 2023, Tullow announced that it had entered into a $400 million secured notes facility agreement
maturing in November 2028 (Secured Notes Facility) with Glencore Energy UK Limited (Glencore). The Secured Notes
Facility is available for 18 months and proceeds are available for liability management of the 2025 Notes. The interest on
the Secured Notes Facility will be Term Secured Overnight Financing Rate (SOFR) plus 10% on drawn amounts.

On 1 December 2023, the Company repurchased $115 million nominal value of 2026 Notes for $103 million cash
consideration through an Unmodified Dutch Auction. A gain on early bond buyback of $11 million is recognised as other
income in the income statement.

On 20 December, the Company repurchased $141 million nominal value of 2025 Notes for $130 million cash
consideration through a Modified Dutch Auction. The cash consideration was funded through an equivalent drawdown
under the Secured Notes Facility. A gain on early bond buyback of $10 million is recognised as other income in the
income statement.

The Company’s total drawn debt reduced to $2.1 billion, consisting of $493 million nominal value 2025 Notes, $1,485
million nominal value 2026 Notes and $130 million outstanding under the Secured Notes Facility.

The 2025 Notes are due in a single payment in March 2025.

The SSRCF, the 2026 Notes and the Secured Notes Facility are senior secured obligations of Tullow Oil Plc and are
guaranteed by certain of the subsidiaries of the Group.

Note 6. Financial instruments

Disclosure exemptions adopted
Where equivalent disclosures for the requirements of IFRS 7 Financial Instruments: Disclosures and IFRS 13 Fair Value
Measurements have been included in the 2023 Annual Report and Accounts of Tullow Oil plc, the Company has adopted
the disclosure exemptions available to the Company’s accounts.

Financial risk management objectives
The Company follows the Group’s policies for managing all its financial risks.

Fair values of derivative instruments
All derivatives are recognised at fair value on the balance sheet with valuation changes recognised immediately in
the income statement. Fair value is the amount for which the asset or liability could be exchanged in an arm’s-length
transaction at the relevant date. Where available, fair values are determined using quoted prices in active markets. To the
extent that market prices are not available, fair values are estimated by reference to market-based transactions or using
standard valuation techniques for the applicable instruments and commodities involved.

The Company’s derivative carrying and fair values were as follows:

Assets/liabilities

Option market value

Oil derivatives

Deferred premium

Oil derivatives

Total liabilities

2023
Less than
1 year
$m

2023
1–3 years
$m

2023
Total
$m

2022
Less than
1 year
$m

2022
1–3 years
$m

2022
Total
$m

(28.1)

(8.3)

(36.4)

–

(28.1)

(162.1)

(50.0)

(212.1)

(8.3)

(36.4)

(24.2)

(186.3)

(8.2)

(58.2)

(32.4)

(244.5)

186 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Note 6. Financial instruments continued

Fair values of derivative instruments continued
The following provides an analysis of the Company’s financial instruments measured at fair value, grouped into Levels 1 to
3 based on the degree to which the fair value is observable:

Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities;

Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 which are
observable for the asset or liability, either directly or indirectly; and

Level 3: fair value measurements are those derived from valuation techniques which include inputs for the asset or
liability that are not based on observable market data.

All of the Company’s derivatives are Level 2 (2022: Level 2). There were no transfers between fair value levels during the year.

For financial instruments which are recognised on a recurring basis, the Company determines whether transfers have
occurred between levels by re-assessing categorisation (based on the lowest-level input which is significant to the fair
value measurement as a whole) at the end of each reporting period.

Income statement summary
Derivative fair value movements during the year which have been recognised in the income statement were as follows:

Loss on derivative instruments

Oil derivatives

2023
$m

208.1

2022
$m

72.4

Cash flow and interest rate risk
The interest rate profile of the Company’s financial assets and liabilities, excluding trade and other receivables and trade
and other payables, at 31 December 2023 and 31 December 2022 was as follows:

US$

2023
Cash
at bank
$m

2023
Fixed
rate debt
$m

2023
Floating
rate debt
$m

2023
Total
$m

2022
Cash
at bank
$m

2022
Fixed
rate debt
$m

2022
Total
$m

15.9

(1,977.8)

(129.6)

(2,091.5)

54.5

(2,500.0)

(2,445.5)

(1,977.8)

(129.6)

(2,091.5)

54.5

(2,500.0)

(2,445.5)

Cash and cash equivalents consisted of $11.0 million (2022: $50.0 million) of short-term deposits that are readily
convertible to known amounts of cash with insignificant risk of change in value. The Company only deposits cash with
major banks of high-quality credit standing.

Liquidity risk
The following table details the Company’s remaining contractual maturities for its non-derivative financial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
based on the earliest date on which the Company can be required to pay.

Weighted
average
effective
interest rate

Less than
1 month
$m

1–3
months
$m

3 months
to 1 year
$m

1–5
years
$m

5+
years
$m

31 December 2023

Non-interest bearing

Fixed interest rate instruments

9.9%

Principal repayments

Interest charge

Variable interest rate instruments

15.8%

Principal repayments

Interest charge

–

11.6

419.0

–

17.0

–

5.0

33.6

100.0

164.0

1,878.0

220.0

–

15.0

130.0

69.0

698.0

2,297.0

–

Total
$m

430.6

1,978.0

401.0

130.0

89.0

3,028.6

Tullow Oil plc Annual Report and Accounts 2023 – 187

Strategic report

Corporate governance

Financial statements

Supplementary information

Notes to the Company Financial Statements continued
Year ended 31 December 2023

Note 6. Financial instruments continued

Liquidity risk continued

31 December 2022

Non-interest bearing

Fixed interest rate instruments

Principal repayments

Interest charge

Weighted
average
effective
interest rate

n/a

9.7%

Less than
1 month
$m

1–3
months
$m

3 months
to 1 year
$m

1–5
years
$m

5+
years
$m

–

18.7

175.7

–

28.0

46.7

100.0

197.0

472.7

2,400.0

464.0

2,864.0

–

Total
$m

194.4

2,500.0

689.0

3,383.4

Note 7. Called-up equity share capital and share premium account

Allotted equity share capital and share premium

At 1 January 2022

Issued during the year

Exercise of share options

At 1 January 2023

Issued during the year

Exercise of share options

At 31 December 2023

Equity share
capital allotted
and fully paid
Number

Share
capital
$m

Share
premium
$m

1,432,080,097

214.2

1,294.7

7,525,898

1.0

–

1,439,605,995

215.2

1,294.7

12,935,892

1.5

–

1,452,541,887

216.7

1,294.7

The Company does not have a maximum authorised share capital. The par value of the Company’s shares is 10p.

188 – Tullow Oil plc Annual Report and Accounts 2023

Supplementary information

Strategic report

Corporate governance

Financial statements

Supplementary information

Alternative performance measures

The Group uses certain measures of performance that
are not specifically defined under IFRS or other generally
accepted accounting principles. These non-IFRS measures
include capital investment, net debt, gearing, adjusted
EBITDAX, underlying cash operating costs, free cash
flow, underlying operating cash flow and pre-financing
cash flow.

Capital investment
Capital investment is defined as additions to property,
plant and equipment and intangible exploration and
evaluation assets less decommissioning asset additions,
right-of-use asset additions, capitalised share-based
payment charge, capitalised finance costs, additions
to administrative assets and certain other adjustments.
The Directors believe that capital investment is a
useful indicator of the Group’s organic expenditure on
exploration and evaluation assets and oil and gas assets
incurred during a period because it eliminates certain
accounting adjustments such as capitalised finance costs
and decommissioning asset additions.

Additions to property, plant
and equipment

Additions to intangible exploration
and evaluation assets

Less:

Changes to Decommissioning
asset estimates

Right-of-use asset additions

Lease payments related to
capital activities

Additions to administrative assets

Other non-cash capital movements

Capital investment

Movement in working capital

Additions to administrative assets

Cash capital expenditure
per the cash flow statement

2023
$m

2022
$m

416.1

370.7

25.4

39.2

47.8

81.1

(53.6)

2.3

(16.0)

379.9

(89.7)

2.3

(19.9)

63.5

(40.2)

2.0

50.4

354.1

(49.7)

2.0

292.5

306.4

Net debt
Net debt is a useful indicator of the Group’s indebtedness,
financial flexibility and capital structure because it
indicates the level of cash borrowings after taking account
of cash and cash equivalents within the Group’s business
that could be utilised to pay down the outstanding cash
borrowings. Net debt is defined as current and non-current
borrowings plus non-cash adjustments, less cash and cash
equivalents. Non-cash adjustments include unamortised
arrangement fees, adjustment to convertible bonds, and
other adjustments. The Group’s definition of net debt does
not include the Group’s leases as the Group’s focus is the
management of cash borrowings and a lease is viewed as
deferred capital investment.

The value of the Group’s lease liabilities as at 31 December
2023 was $185.7 million current and $721.0 million non-current;
it should be noted that these balances are recorded gross for
operated assets and are therefore not representative of the
Group’s net exposure under these contracts.

Borrowings

Non-cash adjustments

Less cash and cash equivalents

Net debt

2023
$m

2022
$m

2,084.6

2,472.8

22.8

(499.0)

1,608.4

27.2

(636.3)

1,863.7

Gearing and adjusted EBITDAX
Gearing is a useful indicator of the Group’s indebtedness,
financial flexibility and capital structure and can assist
securities analysts, investors and other parties to evaluate
the Group. Gearing is defined as net debt divided by
adjusted EBITDAX. Adjusted EBITDAX is defined as (loss)/
profit from continuing activities adjusted for income tax
expense, finance costs, finance revenue, loss/(gain) on
hedging instruments, gain on bargain purchase, other
losses, depreciation, depletion and amortisation, share-
based payment charge, restructuring costs, loss/(gain) on
disposal, gain on bond buy back, exploration costs written
off, impairment of property, plant and equipment net and
provision (reversal)/expense.

(Loss)/ profit from continuing activities

(109.6)

2023
$m

Adjusted for:

Income tax expense

Finance costs

Finance revenue

Loss/ (gain) on hedging instruments

Gain on bargain purchase

Other gains

Depreciation, depletion and
amortisation

Share-based payment charge

Provision (reversal)/expense

Gain on bond buyback

Exploration costs written off

Impairment of property, plant and
equipment, net

Adjusted EBITDAX

Net debt

Gearing (times)

2022
$m

49.1

393.0

335.5

(42.9)

(0.8)

(196.8)

(0.4)

425.8

5.8

4.2

–

105.2

205.5

329.6

(44.0)

0.4

–

(0.2)

436.6

6.0

(22.0)

(86.0)

27.0

408.1

1,151.4

1,608.4

1.4

391.2

1,468.9

1,863.7

1.3

Tullow Oil plc Annual Report and Accounts 2023 – 189

Strategic report

Corporate governance

Financial statements

Supplementary information

Alternative performance measures continued

Underlying cash operating costs
Underlying cash operating costs is a useful indicator
of the Group’s costs incurred to produce oil and gas.
Underlying cash operating costs eliminates certain non-
cash accounting adjustments to the Group’s cost of sales
to produce oil and gas. Underlying cash operating costs
is defined as cost of sales less operating lease expense,
depletion and amortisation of oil and gas assets, underlift,
overlift and oil stock movements, share-based payment
charge included in cost of sales, royalties and certain other
cost of sales. Underlying cash operating costs are divided
by production to determine underlying cash operating
costs per boe. In 2022 and 2023 Tullow incurred abnormal
non- recurring costs which are presented separately
below. The adjusted normalised cash operating costs
are a helpful indicator to the forward underlying costs of
the business.

Cost of sales

Add:

Lease payments related to
operating activity

Less:

Depletion and amortisation of oil and
gas and leased assets

Underlift, overlift and oil
stock movements

Share-based payment charge included
in cost of sales

Royalties

Other cost of sales

Underlying cash operating costs

Non-recurring costs

Total normalised cash
operating costs

Production (mmboe)

Underlying cash operating costs
per boe ($/boe)

Normalised cash operating costs
per boe ($/boe)

2023
$m

869.2

2022
$m

697.5

7.2

14.0

430.8

410.7

109.3

(46.3)

0.4

33.9

9.1

292.9

(25.9)

267.0

22.9

12.8

11.7

0.4

61.7

18.5

266.5

(14.7)

251.8

21.6

12.3

11.3

Free cash flow
Free cash flow is a useful indicator of the Group’s ability
to generate cash flow to fund the business and strategic
acquisitions, reduce borrowings and provide returns to
shareholders through dividends. Free cash flow is defined
as net cash from operating activities, and net cash used in
investing activities, less debt arrangement fees, repayment
of obligations under leases, finance costs paid, and foreign
exchange gain/(loss).

Net cash from operating activities

Net cash used in investing activities

Repayment of obligations under leases

Finance costs paid

Foreign exchange gain

Free cash flow

2023
$m

876.2

(268.5)

(195.0)

(240.0)

(2.5)

170.2

2022
$m

1,077.8

(356.2)

(203.8)

(249.0)

(1.6)

267.2

Underlying operating cash flow
This is a useful indicator of the Group’s assets' ability
to generate cash flow to fund further investment in
the business, reduce borrowing and provide returns to
shareholders. Underlying operating cash flow is defined
as net cash from operating activities less repayments
of obligations under leases plus decommissioning
expenditure.

Pre-financing free cash flow
This is a useful indicator of the Group’s ability to generate
cash flow to reduce borrowings and provide returns to
shareholders through dividends. Pre-financing free cash
flow is defined as net cash from operating activities, and
net cash used in investing activities, less repayment of
obligations under leases and foreign exchange gain.

Net cash from operating activities

Decommissioning expenditure

Lease payments related to
capital activities

2023

876.2

78.1

2022

1,077.8

57.7

53.6

40.2

Repayment of obligations under leases

(195.0)

(203.8)

Underlying operating cash flow

Net cash used in investing activities

Decommissioning expenditure

Lease payments related to
capital activities

Pre-financing free cash flow

812.9

(268.5)

(78.1)

(53.6)

412.7

971.9

(356.2)

(57.7)

(40.2)

517.8

190 – Tullow Oil plc Annual Report and Accounts 2023

Strategic report

Corporate governance

Financial statements

Supplementary information

Commercial reserves and contingent resources summary
(unaudited) working interest basis

Ghana

Non-Operated

Kenya6

Exploration

Total

Oil
mmbbl

Gas
bcf

Oil
mmbbl

Gas
bcf

Oil
mmbbl

Gas
bcf

Oil
mmbbl

Gas
bcf

Oil
mmbbl

Gas8
bcf

Petroleum
mmboe

Commercial reserves1

1 January 2023

Revisions3,4

Production

Acquisitions5

Disposals7

164.3

157.3

(4.9)

8.4

37.8

7.0

(15.5)

(14.0)

(4.9)

–

7.5

(5.5)

41.9

31 December 2023

143.9

151.7

Contingent resources2

1 January 2023

185.0

577.8

36.0

Revisions3,4,6

Acquisitions5

Disposals6

(32.2)

(66.8)

–

31 December 2023

152.8

511.0

(4.1)

3.2

(5.9)

35.1

5.1

2.8

(1.1)

–

6.8

8.6

1.1

–

231.4

–

239.0

–

9.7

470.4

Total
31 December 2023

296.6

662.7

77.0

16.5

470.4

–

54.5

–

(54.5)

–

202.1

162.4

2.1

11.2

229.1

4.0

(20.4)

(15.1)

(22.9)

7.5

(5.5)

–

7.5

(5.5)

185.8

158.5

212.2

506.9 586.4

604.6

(30.4)

(65.7)

242.2

(60.4)

–

658.3

520.7

(41.4)

242.2

(60.4)

745.0

844.1

679.2

957.2

1. Reserves presented are 'Proven and Probable'. They are as audited and reported by independent third-party reserves auditor at YE 2023 and adjusted

for production for January - December 2023.

2. Contingent Resources are 'Proven and Probable'. They are as audited and reported by independent third-party reserves auditor as at YE 2023 based on

best available information.

3. Reserves and Resources revisions in Ghana relate to evaluation of the Jubilee South East (JSE) project, infill drilling and field performance in Jubilee

during 2023, which is offset by the recategorisation of the Tweneboa oil project from reserves to contingent resource.

4. Reserves revisions in Gabon mainly relate to extension of Production licences except for Etame and Ezanga, maturation of Echira Infill wells and overall

good field performance across all assets.

5. Reserves revisions in Gabon also include an asset swap with Perenco, in which M’Oba, Oba, Limande, Turnix and a percentage of Simba have been

exchanged for an increased working interest in Tchatamba and the DE8 licence.

6. Kenya contingent resources have doubled to 470mmstb, with Tullow now holding 100% of the licence, and a Field Development Plan under discussion

with government.

7. Guyana contingent resources have been removed following agreement with our JV Partner Eco and the expiry of the Kanuku licence.

8. A gas conversion factor of 6 mscf/boe is used to calculate the total Petroleum mmboe.

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 204.5 mmboe
at 31 December 2023 (31 December 2022: 219.6 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.

Tullow Oil plc Annual Report and Accounts 2023 – 191

Strategic report

Corporate governance

Financial statements

Supplementary information

Shareholder information

Financial calendar
2023 full-year results announced

Annual General Meeting

AGM trading update

2024 half-year results announced

6 March 2024

16 May 2024

7 August 2024

November trading update

13 November 2024

Shareholder enquiries
All enquiries concerning shareholdings, including
notification of change of address, loss of a share
certificate or dividend payments, should be made to the
Company’s registrar.

For shareholders on the UK register, Computershare
provides a range of services through its online portal,
Investor Centre, which can be accessed free of charge
at www.investorcentre.co.uk. Once registered, this
service, accessible from anywhere in the world, enables
shareholders to check details of their shareholdings or
dividends, download forms to notify changes in personal
details and access other relevant information.

United Kingdom registrar

Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY

Tel – UK shareholders: 0370 703 6242
Tel – overseas shareholders: +44 870 703 6242

Contact: www.investorcentre.co.uk/contactus

Ghana registrar

The Central Securities Depository (Ghana) Limited
4th Floor,
Cedi House,
P.M.B CT 465
Cantonments,
Accra, Ghana

Tel – Ghana shareholders: + 233 303 972 254/302 689 313

Contact: info@csd.com.gh

Share dealing facility
The Company’s shares can be traded through most
banks, building societies, stockbrokers or ‘share shops’.
In addition, UK-based shareholders can buy or sell the
Company’s shares using a share dealing facility made
available by Computershare, which includes internet and
postal share dealing.

Internet share dealing
Internet share dealing is available to shareholders residing
in the UK. This service offers shareholders a straightforward
way to buy or sell the Company’s shares on the London Stock
Exchange. The commission is 1.4%, subject to a minimum
charge of £40. In addition, stamp duty, currently 0.5%, is
payable on purchases. Real-time dealing is available during
UK market hours (08:00 to 16:30). In addition, you can place
a sale instruction outside of market hours. To access the
service, log on to www.computershare.com/dealing/uk.
Shareholders must have their Shareholder Reference
Number (SRN) available. The SRN appears on share
certificates. Internet share dealing is only available to
residents in either the UK, Channel Islands or Isle of Man.

Postal share dealing service

The postal share dealing service offers a way to sell or
purchase shares (subject to availability). To use the service
you must be a resident of the UK or one of the permitted
jurisdictions. A full list of permitted jurisdictions can be found
at www.computershare.com/dealing/uk. If you wish to use
the service, you can download a postal share dealing form
and the terms and conditions at www.computershare.com/
dealing/uk. The fee for this service is 1.4% of the value of each
sale or purchase and is subject to a minimum charge of £40.
Stamp duty of 0.5% may be payable on purchases. Detailed
terms and conditions for both internet and postal dealing are
available upon request by calling +44 370 702 0000.

ShareGift
If you have a small number of shares whose value makes it
uneconomical to sell, you may wish to consider donating
them to ShareGift, which is a UK-registered charity specialising
in realising the value locked up in small shareholdings for
charitable purposes. The resulting proceeds are donated to
a range of charities, reflecting suggestions received from
donors. Should you wish to donate your Tullow Oil plc shares
in this way, please download and complete a transfer form
from www.sharegift.org/forms, sign it and send it together
with the share certificate to ShareGift, PO Box 72253, London
SW1P 9LQ. For more information regarding this charity, visit
www.sharegift.org.

192 – Tullow Oil plc Annual Report and Accounts 2023

Supplementary information

Strategic report

Corporate governance

Financial statements

Supplementary information

Electronic communication
To reduce impact on the environment, the Company
encourages all shareholders to receive their shareholder
communications, including Annual Reports and notices
of meetings, electronically. Once registered for electronic
communications, shareholders will be sent an email
each time the Company publishes statutory documents,
providing a link to the information.

Shareholder security
Shareholders are advised to be cautious of unsolicited
advice, offers to buy shares at a discount or offers of
free company reports. If you receive any unsolicited
investment advice:

• Obtain the name of the person and the organisation.

• Check they are authorised by the FCA by looking the

firm up on www.fca.org.uk/register.

• Report the matter to the FCA either by calling 0800 111

6768 or visit www.fca.org.uk/consumers.

Further information is available at
www.tullowoil.com/investors/shareholder-centre.

Corporate brokers

Barclays
5 North Colonnade,
Canary Wharf,
London E14 4BB

Peel Hunt
100 Liverpool Street,
London EC2M 2AT

Auditor

Ernst and Young LLP
1 More London Place,
London SE1 2AF

Tullow Oil plc’s commitment to environmental issues is reflected in this Annual Report,
which has been printed on Arena Extra White Smooth, an FSC® certified material.

This document was printed by Pureprint Group using its environmental print technology,
with 99% of dry waste diverted from landfill, minimising the impact of printing on the
environment. The printer is a CarbonNeutral® company.

www.tullowoil.com

Registered office:

9 Chiswick Park
566 Chiswick High Road
London W4 5XT

Company registered in England
and Wales No. 3919249