Tullow climbs for second day in London on takeover speculation
Published 07/09/2010 | 15:02
Tullow Oil rose for a second day in London trading after the Independent reported the UK explorer may be a takeover target.
Tullow advanced as much as 3.2pc to 1,220 pence, adding to yesterday’s 2.3pc gain, and traded at 1,209 pence as of 12:19pm.
The shares have dropped 7pc since the end of last month when the company warned of delays to a development in Uganda.
The Independent newspaper in the UK cited traders as saying that a potential bidder was preparing a 20-pound a share offer for Tullow.
The Daily Mail said China National Offshore Oil Corp may be considering a takeover, without citing anyone.
An offer of 20 pounds a share would value the company at €17.7bn.
“The 20-pound share bid rumor circulating yesterday lacks credibility in our view and the timing would appear to be out considering what is going on in Uganda,” Richard Griffith, an analyst at Evolution Securities Ltd., said in a note.
George Cazenove, a spokesman for Tullow, declined to comment. Jiang Yongzhi, a spokesman for Hong Kong-listed Cnooc Ltd and Lv Bo, a spokesman of its Beijing-based parent China National Offshore Oil Corp, were both unavailable for comment.
Tullow has fallen for the past two weeks after saying that the development of the Lake Albert basin in Uganda will be held up by a dispute over tax between the government and Heritage Oil Plc.
Its plans to bring in Cnooc and Total SA as partners in Uganda have been halted until the issue is resolved.
The completion of the Owo sidetrack well in Ghana, which is expected to be announced shortly, may also boost the shares.
Tullow said in June that the Owo-1 well discovered a “major new oil field” near the border with Ivory Coast.
“Tullow still has one of the best portfolios in the sector so any dips in the share price should represent opportunities for investors,” Griffith said.