Tullow Oil has been approached by US rival, Kosmos Energy, in regards to an acquisition deal.

Currently, the discussions are at a preliminary stage and the London-based oil and gas exploratory firm said that there can be "no certainty that any offer will be made".

Furthermore, the terms of any potential offer are not yet known.

In accordance with takeover rules, Kosmos is now required to announce a firm intention to make an offer by 9 January 2025 or state that it does not intend to make an offer.

Investment analyst at AJ Bell, Dan Coatsworth, said: "Tullow is a stock market story come full circle. Starting out as a small cap oil and gas play, a series of big discoveries in Africa helped propel the company into the ranks of the FTSE 100.

"Having subsequently lost its touch in prospecting for hydrocarbons, seen sentiment towards its sector sour and fallen into financial difficulties, Tullow’s life as a public company could soon come to an end in reduced circumstances.

"The identity of the bidder, US operator Kosmos Energy, is no great surprise given it is partnered with Tullow in Africa. Tullow’s shares are up 25% over the course of the week as speculation built about a possible deal, which explains why they have barely budged on confirmation that discussions have begun."

---