Shares of Tullow Oil jumped over 14% on Friday after the West Africa-focused company was exempted from a $320 million tax on its Ghana operations.
The International Chamber of Commerce (ICC) ruled that the Branch Profit Remittance Tax (BPRT) does not apply to the firm's operations in the Deepwater Tano and West Cape Three Points fields offshore Ghana, Tullow said on Thursday.
Tullow has been struggling to pull up its profits after troubling performance at its flagship Jubilee field, which is one of Ghana's major oil fields.
"The removal of a further liability will take some pressure off the stretched balance sheet, although investors will still be keen to see some significant deleveraging this year," Ashley Kelty, an analyst at Panmure Liberum said.
Shares of the London-listed company were at the top of the FTSE small-cap index .FTSC on Friday after falling nearly 45% in 2024.
Tullow, which is still in talks to resolve two other tax claims with the government of Ghana, will also not be liable for any future BPRT claims by the Ghana government.
In December, U.S. oil and gas firm Kosmos Energy KOS.N walked away from its pursuit of Tullow without specifying any reason for the decision, prompting a 10% drop in Tullow's shares.
(Reuters - Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala)