Tullow Oil has reported its 2009 financial results, with a 93% drop in profit before tax.

Tullow Oil has announced its 2009 financial results, with profits before tax down 93% on last year due to “natural declines in production volumes”, lower oil and gas prices (of 25%), and the weakness of the pound against the dollar.

It said the results were “in line with market expectations” and cited among its highlights the achievement of outstanding exploration performance and its two major oil discoveries in Uganda and Ghana.

Tullow Oil has requested formal government approval to pre-empt the sale of Canadian oil company Heritage’s Ugandan stakes, with whom it shares the assets of Blocks 1, 2A and 3 in the Lake Albert Rift Basin. Once it has acquired all the assets, it will sell two thirds of the stakes to potential buyers CNOOC and Total. All three companies will then own one third each.

This proposition is currently being considered by the Ugandan government, although Tullow hopes it “will result in a unified partnership with considerable experience and financial capability to enable Uganda to become a significant oil producing nation.”

Aidan Heavey, Chief Executive, said: “A strong performance in 2009 and an excellent start to 2010 has enabled the Group to continue to create material exploration and development opportunities. Although our 2009 reported results still reflect a period of financial transition, first oil in Ghana from the Jubilee field later this year will result in considerable production growth and increased cash flow.

“Our transformational exploration programme continues apace with up to 30 wells planned for 2010. In Uganda we are working closely with the government and two potential new partners to accelerate development. Our future growth is well underpinned by a significantly strengthened capital structure and overall the performance prospects for the Group are very strong.”

Tullow is one of Europe’s largest gas and oil companies and is headquartered in London. It employs 540 people and has a significant focus on its African operations.