Friday, September 10, 2010

Investors Shrug Off BP (NYSE:BP) Report with Transocean (NYSE:RIG)

Transocean (NYSE:RIG) investors are largely ignoring the report by BP (NYSE:BP) which pointed to them as being responsible for some of the failure which led to the explosion on the Deepwater Horizon oil rig.

Shares are at their highest level in over a month, reaching $59.70, a gain of $4.40, or 7.96 percent, at 12:07 PM EDT.

A report from FBR Capital Markets is probably one of the reasons for the surge in share price of Transocean, as they said in the report they believe Transocean will settle with BP from $1 billion to $2 billion.

FBR added that's significantly below the $6 billion to $7 billion they think shares of Transocean have been discounted at because of their potential liability in the oil spill.

There are still some questions as to whether or not Transocean will be liable for anything because of the contract they had with BP which provides them with total indemnification.

Much still rides on whether or not BP is designated as having been grossly negligent in the incident.

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