Case Study: Tullow: Company Background And Activities

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Companies Background and Activities.
Tullow, founded in 1985 by Aidan Heavey, is a well-known multinational company founded in Tullow, Ireland and establishing their headquarters in London, UK. Tullow is an oil and gas company which has business across 22 countries with 130 licenses, 57 producing fields in three regions. By the end of 2014 their total workforce surpassed 1,900 people with 50% of them operating in Africa. The company’s largest production started in December 2010 when Ghana’s offshore Jubilee oil find was discovered in 2007. Tullow is known to be the most important and international independent exploration and Production Company. Their main focus is to monetize and find oil in the Atlantic Margins and Africa. Tullow’s operations are mainly focused
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Liquidity risk includes cash flow and market risk.

• Commodity price risk
Since oil is a commodity and its known that commodities are not “stable” Tullow can be affected by any change that might occur.

Financial risk management strategy:
• For the Foreign Currency Risk the company could use future contracts and option contracts, by using Sterling and US dollars the company can achieve long and short term financial needs.
• For Credit Risk the company could use derivatives in order to better manage how much the wealth is.\
• For Interest Rate Risk the company could use interest rate swaps in order to better manage the exposure against variation in the interest rate.
• For the Liquidity Risk the company could try to anticipate cash flows and hedging activities to better function through strong banking and equity relationships to certify cost.
• For the Commodity Risk the company could use option and future which are commodity derivatives this could lower the chances of risk by hedging against the variation in the price of oil.
Analysis
To what extent the company is hedging or

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