Canaccord upgrades Tullow Oil to 'buy' on success offshore Guyana

The timing could not have been better given Tullow's struggles in East Africa and still heavy debt burden, with the latter standing at $2.9bn as of mid-2019.

Now, the company could begin "reshaping" its future and shake-off financial markets' perception of it as only a geared play to the price of oil, the broker said.

Canaccord highlighted the multiple similarities between Jethro and the explorer's highly successful Jubilee field, estimating that it could be onstream in approximately four years.

It also highlighted the "appealing" fiscal terms on the projects in Guyana, arguing that they mde for a "very atractive" proposition.

"Usually, we would not include exploration upside in our target price. However, we think it is merited where the potential is game changing, and there is a substantial on-block discovery (Jethro) and one just-off (Hammerhead) - both of Lower Tertiary age - that derisk the prospect pool," the broker said.

"[...] We anticipate heavy newsflow emphasis on Guyana in 2020. We would not be surprised to see four/five wells on Orinduik alone in 2020 (one/two Jethro appraisals, one Jethro Channel exploration wells, one/two further exploration targets)."

The broker revised its target price for Tullow's shares higher, from 260.0p to 280.0p and upgraded their recommendation for the stock from 'speculative buy' to 'buy'.