Oil exploration company Tullow has reported a 93% drop in pre-tax profits for the year ending December 2009. Pre-tax profits for the year fell from £299m sterling to £20m and are in line with market expectations.
Revenues for the year declined by 16% from £692m to £582m while its operating profit slumped 68% to £95m from £300m.
Aidan Heavey, Tullow's CEO, said the results reflected a period of financial transition as well as lower production volumes and commodity prices.
However, he added that the first oil from the company's Jubilee field in Ghana 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,' Mr Heavey said.
'Our future growth is underpinned by a significantly strengthened capital structure and overall the performance prospects for the group are very strong,' he added.
Tullow said that its exploration and appraisal activity continued with a record 87% success rate. Highlights included the 300 million barrel Jobi-Rii discovery in Uganda and the Tweneboa discovery in Ghana.
The company said it is working closely with the Ugandan government to get approval to buy Heritage Oil's interest in Blocks 1 and 3A in parallel with a farmdown process, which is now at an advanced stage. Tullow said that two potential partners have been identified - CNOOC and Total.
'Tullow delivered another outstanding year in 2009 and the pace of activity continues as we move into 2010, with some remarkable achievements already,' the company said in its results statement.
'We fully expect 2010 to be another strong year. We plan to consolidate the exceptional progress achieved in the last five years and leverage our unique position, particularly as Africa's leading independent company,' it added.
Shares in Tullow closed down 0.3% at £12.77 in London.
