Shares in Tullow Oil Plc rose more than 8% on Monday after the Africa-focused oil explorer said it expects to resume drilling at its multi-billion dollar TEN deepwater oil and gas project after a court ruling favoured Ghana in an ocean border dispute with Ivory Coast.
The International Tribunal for the Law of the Sea on Saturday drew an ocean boundary favouring Ghana, ending the dispute which has slowed the development of oil fields and at times soured relations between the two oil-producing nations.
Tullow, which leads the TEN project, now expects to increase output from around 50,000 barrels per day (bpd) to 80,000 bpd.
“A clear ruling that does not alter the jurisdiction of any part of the TEN Development Area and is accepted by both countries is the best outcome Tullow could have hoped for,” said Barclays, which stuck to its “overweight” rating on the stock.
Tullow shares were up 6% at 189 pence by 0828 GMT, having earlier hit a four-month high of 192 pence.
“While positive from an operational sense regarding the potential return to drilling, this border ruling also removes a major corporate overhang which, in our view, has been delaying RBL refinancing,” brokerage Jefferies said.
Davy Research also said the company is likely to divest some of its 47% equity in the TEN project.
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