Tullow Oil upgraded to ‘buy’ after border dispute settled

Oil and gas exploration company Tullow Oil has been upgraded and given a "buy" rating by Bank of America Merrill Lynch (BofAML), with drilling on its flagship TEN project in Ghana to resume next year.

Previously rated “neutral”, Tullow Oil stock now offers a “compelling investment case”, said BofAML.

The bank said the resolution of a border dispute involving Tullow now puts it in a position to reduce its debt without asset disposals or the issuing of equity. That net debt, BofAML says, has been a “perennial overhang” for the company, and the potential for that to reduce will put Tullow in a stronger position into next year.

Research analyst Rafal Gutaj wrote in a note to clients that there was an attractive opportunity to buy into the stock, and upgraded Tullow's price to 250p.