There is no doubt the report of the oil commission that Halliburton's (NYSE:HAL) choice of cement used on the Macondo well of BP (NYSE:BP) was flawed is devastating to the company, and it showed in their credit-default swaps, which soared in price after the news was released.
Halliburton CDS contracts surged by 27.3 basis points to 87.2 at 4:30 PM EDT in New York, their highest level since June, according to CMA, which provided the data.
The National Commission on the BP Deepwater Horizon Oil Spill found that three of the four tests performed by Halliburton on the cement found it was unstable for use.
Only one test result appears to have reached BP's hands before the Deepwater Horizon disaster.
A credit-default swap pays the buyer face value minus the value of the defaulted debt.
This will no doubt be a huge weight on the share price and liability of Halliburton going forward, as the same uncertainty which has surrounded BP will be, albeit probably to a lesser degree, on Halliburton as well.
Shares of Halliburton were punished Thursday, plummeting to $31.68, dropping $2.74, or 7.96 percent. After hours they were continuing to drop.
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