LONDON (ShareCast) - (Sharecast News) - Tullow Oil shares surged on Monday after the company revealed it had spent $118m (£89m) expanding its interests in Ghana.
Tullow lifted its stakes in the Jubilee and TEN fields, to 38.9% and 54.8%, which would add an additional 4,000 barrels of oil equivalent per day (boepd) each year.

It also increased production guidance to 59,000-65,000 boepd for 2022 - 30-32 kbopd at Jubilee and 13-14 kbopd at TEN. Increased ownership at the two fields will increase capital expenditure by $30m to $380m and is expected to generate $300m incremental free cash flow at $75 a barrel between 2022 and 2026.

Hargreaves Lansdown analyst Laura Hoy said Tullow was taking advantage of buoyant oil prices, aiming to up production "and get a larger slice of the growing pie", as prices surge on the back of the Ukraine war.

"Given the supply constraints at the moment, things shouldn't drop off anytime soon and this should help Tullow recoup the cost of the investment, and then some, relatively quickly. However that's entirely dependent oil prices, so volatility can't be ruled out," she said.

"With its finances largely under control, Tullow's finally able to make some strategic moves. Hopefully this is the first of many. But the fact remains that Tullow is behind the curve compared to peers, who are using current conditions to shore up clean energy operations. Tullow risks being stuck clawing its way back to profitability while the rest of the industry marches ahead."

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