NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
NOTE 14 – FAIR VALUE MEASUREMENT continued 
 
Measurement of Fair Value 
a)   Derivatives 
Derivatives entered into by the Company consist of commodity contracts and interest rate swaps.  The Company 
utilises present value techniques and option-pricing models for valuing its derivatives.  Inputs to these valuation 
techniques include published fo rward prices, volatilities, and credit risk considerations, including the incorporation 
of published interest rates and credit spreads.  All of the significant inputs are observable, either directly or indirectly; 
therefore, the Company’s derivative instruments are included within the Level 2 fair value hierarchy.  
b)   Credit Facilities  
As at 31 December 2014, the Company had $9 5 million and $35 million of principal debt outstanding on the Senior 
Credit Facility and the Junior Credit Facility, respectively. The estimated fair value of the Senior Credit Facility 
approximated its carrying amount due to the floating interest rate pa id on such debt to be set for a period of three 
months or less.  The estimated fair value of the Junior Credit Facility was approximately $41.8 million, based on 
indirect, observable inputs (Level 2) regarding interest rates available to the Company. The f air value of the Junior 
Credit Facility was determined by using a discounted cash flow model using a discount rate that reflects the 
Company’s assumed borrowing rate at the end of the reporting period. 
c)   Other Financial Instruments 
The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value 
due to their short-term nature. 
 
NOTE 15 – OTHER CURRENT ASSETS 
        
 
Year ended 31 December 
2014 
US$’000 
2013 
US$’000 
   
Cash advances to other operators      3,270        685       
Escrow accounts 1,000 1,498 
Oil inventory on hand, at cost 1,331 1,088 
Equipment inventory, at cost 1,315 - 
Prepaid expenses 1,401 753         
Other            19           14        
        Total other current assets      8,336     4,038 
 
 
 
  
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