Tullow Oil (LSE: TLW.L – news) tops the FTSE 100’s leaderboard, rising by around 4 percent in early trading, which traders attribute to UBS (Xetra: UB0BL6 – news) ‘ decision to upgrade its rating on the stock to “buy” from “neutral”.

Demand to buy Tullow Oil shares is relatively strong, with trading volumes in the stock coming in at around 20 percent of the stock’s 3-month daily average in the first hour of trading – above volumes for the FTSE which only stand at 4.5 percent of the index’s 3-month daily average.

“The investment case for Tullow shares has clearly changed. Less evident for the time being is the high impact offshore explorer. In its place is a different animal, with greater leverage to development risk but with significant onshore exploration upside,” UBS analysts write in a research note.

Tullow made its name over the past decade by opening new oil areas in Ghana and Uganda, but after a string of disappointing drilling results it lost a quarter of its value in 2013 and was the worst-performing stock in the FTSE 100 outside of the mining sector.

Tullow has since been pinning its hopes on two new discoveries in northern Kenya to turn the region into a significant crude producer and regain its reputation as a successful explorer.

Tullow shares are up by 3.9 percent at 781.50 pence by 0730 GMT, making it the best-performing stock on the FTSE 100 and also on the pan-European FTSEurofirst 300 index.

However, in spite of the rise, the stock remains down by around 9 percent since the start of 2014 – underperforming a 1 percent fall on the FTSE 100.

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