Tullow Oil PLC's (LSE:TLW) long-running tax arbitration with Ghana has been likened to a scene from Samuel Beckett’s 'Waiting for Godot', as investors and analysts await a resolution that could significantly impact the company’s future.
In a research note, Stifel referenced the existential uncertainty of Beckett’s play to describe the $320 million dispute, which is being decided by an international arbitration court.
The case centres on disputed tax assessments tied to loan interest deductions and insurance proceeds.
The American investment bank estimates the market has priced in a 70% chance that Tullow could face the full liability.
A resolution is crucial for the company, which faces significant debt refinancing and operational challenges in Ghana, where its Jubilee field has underperformed.
The tax dispute has hung over Tullow’s valuation, with the Stifel report cutting its price target to 30p.
"Assuming 50% of the liability — $160 million — in our risked NAV would reduce it to 21p per share, close to the current share price," the note read.
Stifel says 'sell'. In afternoon trading, the shares were changing hands for 20.38p, down 1.4% on the day.