Canaccord says tribunal ruling is 'very good news' for Tullow Oil

Analysts at Canaccord Genuity reiterated their ‘hold’ rating on Tullow Oil stock, after a judge ruled its TEN development could continue.

The brokerage described the ruling as “very good news” for the FTSE 250 group, as it is free to continue the development of its project, which is already 55% complete and expected to be online in mid-2016.

Following the International Tribunal of the Law of the Sea’s (ITLOS) ruling, Tullow will be subject to a no-new-drilling rule until a final decision is made by 2017.

However, the group’s current operations should be enough to meet the production targets in the meantime, the brokerage said.

“There are a number of additional wells that have already been drilled,” Canaccord analysts added in a note.

“These can be completed post first oil to support production in the event that no new wells can be drilled until the final ITLOS decision.”

Shares in Tullow, which has been much-mentioned as one of the next big targets in the emerging trend for Big Oil mergers and acquisitions, were down 2.18% to 408.90p at 11:59 on Monday.