After generating results beyond expectations, BP plc (NYSE:BP) was upgraded today by Goldman Sachs (NYSE:GS) from "Neutral" to "Buy" on the stronger-than-expected quarter and valuation.
Citing the attractive valuation whereby BP is trading at a 2011E 14% EV/DACF discount after paying out liabilities after the Gulf of Mexico oil spill, they see the company beginning to come back.
There is also light at the end of the tunnel for selling off its assets, which is probably more of a positive than most analysts and commentators note, as it's helping them to whittle down the non-core assets to be a much stronger company over time. So far they've raised about $14 billion, with another approximate $16 billion targeted for sale within the next year.
That puts them in a more predictable light, which makes shareholders and investors less nervous.
Goldman also likes that BP raised their earnings per share estimates for the next three years.
Finally, the reinstatement of the dividend, which is gaining steam, could end up with the income investor base returning said Goldman.
Goldman sees them reinstating the dividend at probably $0.08, and over the next couple of years increasing it to about $0.11.
BP closed Wednesday at $42.37, gaining $0.95, or 2.29 percent.
Showing posts with label BP Assets. Show all posts
Showing posts with label BP Assets. Show all posts
Thursday, November 4, 2010
Monday, October 25, 2010
BP (NYSE:BP) Sells Gulf Assets to Japan's Marubeni
BP (NYSE:BP) to divest of non-core assets to raise capital to pay for its mounting liabilities from the Deepwater Horizon oil spill in the Gulf of Mexico.
This time the oil giant has sold four fields in deepwater areas in the Gulf of Mexico to Marubeni of Japan, for $650 million. This will bring the total amount raised through selling of assets to over $12 billion. BP wants to raise about $30 billion overall to cover itself for existing and potential liabilities.
The specific fields sold are the Merganser, Magnolia, Nansen and Zia fields, which combined produce about 15,000 barrels of oil equivalent per day of oil and gas.
Evidently, BP would have sold these assets whether or not they oil spill happened: "When BP acquired Devon's Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region," said Andy Hopwood, vice president for Strategy and Integration.
The deal is expected to close in the early part of 2011.
This time the oil giant has sold four fields in deepwater areas in the Gulf of Mexico to Marubeni of Japan, for $650 million. This will bring the total amount raised through selling of assets to over $12 billion. BP wants to raise about $30 billion overall to cover itself for existing and potential liabilities.
The specific fields sold are the Merganser, Magnolia, Nansen and Zia fields, which combined produce about 15,000 barrels of oil equivalent per day of oil and gas.
Evidently, BP would have sold these assets whether or not they oil spill happened: "When BP acquired Devon's Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region," said Andy Hopwood, vice president for Strategy and Integration.
The deal is expected to close in the early part of 2011.
BP (NYSE:BP) Needs These 5 Things to Happen to Resume Growth
Although there have been some foreign deals forged and implemented by BP (NYSE:BP), which is good news for them and their shareholders, they're still, for the most part, in a holding mold until four major things are handled and resolved.
Only one of the four things needed to be done are under the direct control of BP, and that is the divesting of parts of the company to raise capital to pay for liabilities associated with the Gulf of Mexico oil spill.
The other three things that need to happen are the completed examination of the blowout preventer, determination of whether or not they are found in gross negligence over the accident, and how much, if any, shared liability with partners they'll participate in.
The last thing, which will be mostly determined by the four mentioned above, is the reinstatement of the dividend by BP.
As far as the blowout preventer, that will probably take longer than the rest, and is just starting the process of examination. It's important in whether or not Cameron International, which developed it, will be liable for part of the costs of the spill.
In the largest liability remaining to be determined, BP is awaiting the decision on whether or not they're going to be designated as being grossly negligent in the ordeal. If they are, it could cost them over $17 billion more in fines, above and beyond all existing and future payouts.
That also is connected to the next element, which is shared liability. If they aren't found grossly negligent, their partners in the Macondo well: Anadarko (NYSE:APC) and MOEX, via their majority owned Mitsui (Nasdaq:MITSY), would have to pay out some significant capital for their part in the failure.
Selling of their assets, as mentioned, is under the control of BP, and that will give shareholders and potential investors more confidence in the company, which would ultimately be crowned with the reinstatement of their dividend, which mounting pressure is being asserted on the company to do.
If and when all these happened and/or are concluded, we'll see a much clearer picture of the future of BP, which remains tenuous at best.
Depending on the outcomes of the mentioned events that need to happen, will determine whether BP will be split up or taken over by a larger competitor, or continue on as a leaner but competitive energy firm.
Only one of the four things needed to be done are under the direct control of BP, and that is the divesting of parts of the company to raise capital to pay for liabilities associated with the Gulf of Mexico oil spill.
The other three things that need to happen are the completed examination of the blowout preventer, determination of whether or not they are found in gross negligence over the accident, and how much, if any, shared liability with partners they'll participate in.
The last thing, which will be mostly determined by the four mentioned above, is the reinstatement of the dividend by BP.
As far as the blowout preventer, that will probably take longer than the rest, and is just starting the process of examination. It's important in whether or not Cameron International, which developed it, will be liable for part of the costs of the spill.
In the largest liability remaining to be determined, BP is awaiting the decision on whether or not they're going to be designated as being grossly negligent in the ordeal. If they are, it could cost them over $17 billion more in fines, above and beyond all existing and future payouts.
That also is connected to the next element, which is shared liability. If they aren't found grossly negligent, their partners in the Macondo well: Anadarko (NYSE:APC) and MOEX, via their majority owned Mitsui (Nasdaq:MITSY), would have to pay out some significant capital for their part in the failure.
Selling of their assets, as mentioned, is under the control of BP, and that will give shareholders and potential investors more confidence in the company, which would ultimately be crowned with the reinstatement of their dividend, which mounting pressure is being asserted on the company to do.
If and when all these happened and/or are concluded, we'll see a much clearer picture of the future of BP, which remains tenuous at best.
Depending on the outcomes of the mentioned events that need to happen, will determine whether BP will be split up or taken over by a larger competitor, or continue on as a leaner but competitive energy firm.
Friday, October 15, 2010
BP's (NYSE:BP) Assets in Venezuela Will be Acquired by TNK-BP
A deal to acquire the Venezuelan assets of BP (NYSE:BP) by TNK-BP, a joint venture between them and a group of Russian billionaires, has been confirmed today by the energy ministers of both countries.
The memorandum was signed between the two nations when Hugo Chavez visited Russia.
Terms of the deal weren't revealed (although in the past it was estimated to be valued at about $1 billion) but the specific assets were, as German Khan, one of the wealthy Russian's with a stake in the venture revealed, include the acquisition of three oil fields: "16.7 percent of Petromanagas, 40 percent of Petroperija and 26.6 percent of Bouqeron," said Khan.
TNK-BP's goal is to expand outside of Russia and ultimately become the largest independent producer based in the country.
BP is selling the asset as part of their goal to raise $30 billion to pay for unfolding liabilities related to the Gulf of Mexico oil spill.
The memorandum was signed between the two nations when Hugo Chavez visited Russia.
Terms of the deal weren't revealed (although in the past it was estimated to be valued at about $1 billion) but the specific assets were, as German Khan, one of the wealthy Russian's with a stake in the venture revealed, include the acquisition of three oil fields: "16.7 percent of Petromanagas, 40 percent of Petroperija and 26.6 percent of Bouqeron," said Khan.
TNK-BP's goal is to expand outside of Russia and ultimately become the largest independent producer based in the country.
BP is selling the asset as part of their goal to raise $30 billion to pay for unfolding liabilities related to the Gulf of Mexico oil spill.
Tuesday, October 12, 2010
BP (NYSE:BP) Closes Deal with Apache (NYSE:APA) for Canadian Assets
BP (NYSE:BP) and Apache Corp (NYSE:APA) have closed another part of the $7 billion deal where BP is divesting of assets in the Permian Basin, Egypt and Western Canada, this one being the Canadian assets held by the oil giant. They've already closed on the Texas Permian Basin assets.
The Canadian assets were valued at $3.25 billion, which entailed natural gas projects and some oil.
Proven oil reserves were 224 million barrels of oil equivalent, with production in the first half reaching 46,500 barrels of oil equivalent a day.
About 1.3 million net acres were part of the agreement, which included some unconventional oil and natural gas assets.
The Canadian division of Apache will take over operations on November 1.
BP is divesting of about $30 billion in assets to pay for liabilities connected to the Macondo Gulf of Mexico oil well disaster.
The Canadian assets were valued at $3.25 billion, which entailed natural gas projects and some oil.
Proven oil reserves were 224 million barrels of oil equivalent, with production in the first half reaching 46,500 barrels of oil equivalent a day.
About 1.3 million net acres were part of the agreement, which included some unconventional oil and natural gas assets.
The Canadian division of Apache will take over operations on November 1.
BP is divesting of about $30 billion in assets to pay for liabilities connected to the Macondo Gulf of Mexico oil well disaster.
Monday, October 4, 2010
BP (NYSE:BP) Role Over for Thad Allen
Former U.S. Coast Guard Admiral Thad Allen and government point man Thad Allen has stepped down from his role of overseeing the operations to kill the leaking BP (NYSE:BP) Macondo oil well in the Gulf of Mexico.
That reaffirms that one stage of the process is over and a new one already begun. Now the claims and legal process is taking center stage, as BP continues to divest of assets to raise the necessary capital to pay for its liabilities.
Taking over as the new National Incident Commander is Rear Admiral Paul Zukunft, who is overseeing the remaining cleanup efforts.
Today Allen joins the RAND Corp. as a senior fellow. The accident on April 20 delayed Allen joining the research organization prior to this, as he was called on to manage the disaster, watching over BP and its actions.
It has been about two weeks since the formerly leaking oil well was officially declared dead.
That reaffirms that one stage of the process is over and a new one already begun. Now the claims and legal process is taking center stage, as BP continues to divest of assets to raise the necessary capital to pay for its liabilities.
Taking over as the new National Incident Commander is Rear Admiral Paul Zukunft, who is overseeing the remaining cleanup efforts.
Today Allen joins the RAND Corp. as a senior fellow. The accident on April 20 delayed Allen joining the research organization prior to this, as he was called on to manage the disaster, watching over BP and its actions.
It has been about two weeks since the formerly leaking oil well was officially declared dead.
Friday, October 1, 2010
BP (NYSE:BP) to Receive Offer from TNK-BP for Vietnam, Venezuela Assets
Reportedly BP (NYSE:BP) will be getting a formal offer from TNK-BP Ltd, a joint venture between the company and several Russian billionaires, for its assets in Venezuela and Vietnam.
BP is attempting to raise about $30 billion by selling off assets in order to pay for the growing liabilities it faces for the Gulf oil spill.
They've already raised about $10 billion of it, and would probably be at close to $15 billion after selling the assets (including Algerian assets). TNK-BP also has an interest in the Algerian assets of the oil giant, but that is separate from this potential deal.
The board of TNK-BP has given the company permission to start negotiations.
Strong ties of Russia with Vietnam and Venezuela make it highly probable there will be no problems in working out a deal from the perspective of those countries.
Former BP CEO Tony Hayward has now taken a seat on the TNK-BP board.
BP is attempting to raise about $30 billion by selling off assets in order to pay for the growing liabilities it faces for the Gulf oil spill.
They've already raised about $10 billion of it, and would probably be at close to $15 billion after selling the assets (including Algerian assets). TNK-BP also has an interest in the Algerian assets of the oil giant, but that is separate from this potential deal.
The board of TNK-BP has given the company permission to start negotiations.
Strong ties of Russia with Vietnam and Venezuela make it highly probable there will be no problems in working out a deal from the perspective of those countries.
Former BP CEO Tony Hayward has now taken a seat on the TNK-BP board.
Monday, September 20, 2010
BP (NYSE:BP) Oil Well Declared Officially Dead, Most Oil Gone
BP (NYSE:BP) had an important but muted victory this weekend, as if finally and officially permanently sealed the stricken oil well, closing one chapter of the saga.
The vast majority of the oil which leaked from the well is gone, according to government officials, but some still remains, and it's uncertain as to what extent it's doing damage to the region.
Some scientists have made attempts to say there is a lot more oil left than the government asserts, but their arguments are extremely weak, and evidence small and unconvincing.
These scientists have agendas, and that is to obtain more research money for their university departments. Saying there is more oil than there is, attempts to generate the idea in the public mind that there is more research needed.
So far BP has spend close to $9.5 billion on cleanup, and is paying out another $20 billion via a compensation fund administered by Kenneth Feinberg.
They're also selling up to $30 billion in assets in order to pay for legal claims and other fines they may have to face.
The vast majority of the oil which leaked from the well is gone, according to government officials, but some still remains, and it's uncertain as to what extent it's doing damage to the region.
Some scientists have made attempts to say there is a lot more oil left than the government asserts, but their arguments are extremely weak, and evidence small and unconvincing.
These scientists have agendas, and that is to obtain more research money for their university departments. Saying there is more oil than there is, attempts to generate the idea in the public mind that there is more research needed.
So far BP has spend close to $9.5 billion on cleanup, and is paying out another $20 billion via a compensation fund administered by Kenneth Feinberg.
They're also selling up to $30 billion in assets in order to pay for legal claims and other fines they may have to face.
Monday, September 13, 2010
BP's (NYSE:BP) Vietnam Assets Getting a Bid
Indian Oil Secretary S. Sundareshan revealed on Saturday that state-run "Oil and Natural Gas Corp" will be making a joint bid with Petrovietnam for the Vietnam assets of BP (NYSE:BP).
The bid should come within a few weeks said Sundareshan, after an evaluation of the assets is completed.
"They (ONGC) are making an evaluation of the value of BP's assets, and once that is finalized they will make an offer in conjunction with Petrovietnam," Sundareshan said.
The Indian government will need to approve of the deal because of production-sharing contracts held by Cairn India for exploration blocks for oil and gas.
According to UBS (NYSE:UBS) analysts, the Vietnam assets are valued at about $966 million, which include the Phu My power generation project, interests in the Lan Tay and Lan Do gas fields, and the Nam Con Son pipeline.
The bid should come within a few weeks said Sundareshan, after an evaluation of the assets is completed.
"They (ONGC) are making an evaluation of the value of BP's assets, and once that is finalized they will make an offer in conjunction with Petrovietnam," Sundareshan said.
The Indian government will need to approve of the deal because of production-sharing contracts held by Cairn India for exploration blocks for oil and gas.
According to UBS (NYSE:UBS) analysts, the Vietnam assets are valued at about $966 million, which include the Phu My power generation project, interests in the Lan Tay and Lan Do gas fields, and the Nam Con Son pipeline.
Citigroup (NYSE:C): BP (NYSE:BP) Spill Claims Below $20 Billion
Citigroup Inc. (NYSE:C) analyst Mark C. Fletcher said in a note today that last week, incoming BP (NYSE:BP) CEO Robert Dudley said in a meeting last week that the $20 billion set aside to meet claims against the company may be more than is needed.
Fletcher cited Dudley as saying the $20 billion probably exceeds what will have to be paid out.
Concerning the overall cost of the Gulf of Mexico oil spill, Dudley added the $32 billion estimated should be very close to the actual amount of liability faced by the company.
It is also thought the announced assets to be sold will be the parameters for the company, and there probably won't be a need to sell more than those already in play.
Unless there are new developments, the company also should remain intact and not have to be broken up to pay for liabilities.
Claims from states, which aren't included in the $20 billion fund, shouldn't be too high, said Fletcher, which has been confirmed by some claims already submitted to the company.
A spokesman from BP said he wasn't able to confirm Dudley's statements.
Fletcher cited Dudley as saying the $20 billion probably exceeds what will have to be paid out.
Concerning the overall cost of the Gulf of Mexico oil spill, Dudley added the $32 billion estimated should be very close to the actual amount of liability faced by the company.
It is also thought the announced assets to be sold will be the parameters for the company, and there probably won't be a need to sell more than those already in play.
Unless there are new developments, the company also should remain intact and not have to be broken up to pay for liabilities.
Claims from states, which aren't included in the $20 billion fund, shouldn't be too high, said Fletcher, which has been confirmed by some claims already submitted to the company.
A spokesman from BP said he wasn't able to confirm Dudley's statements.
Friday, September 10, 2010
TNK-BP to Look at BP (NYSE:BP) Assets in Venezuela, Vietnam
BP (NYSE:BP) has been shopping around their Venezuela and Vietnam assets as part of the $30 billion they are trying to raise to pay for the Gulf oil spill.
TNK-BP, which is a joint venture between BP and Russian billionaires, is interested in expanding into the two markets, and in the September 30 board meeting are going to discuss the idea.
Board members of TNK-BP include four BP directors, four Russians, and three independent directors.
In an interview in Moscow, billionaire shareholder, Viktor Vekselberg, said the possibility of acquiring the BP assets will be on the agenda of the next meeting.
The strongest of the two options from TNK-BP's point of view are the Venezuelan assets.
Those assets produce about 110,000 barrels of oil a day.
While Tony Hayward won't be at this next meeting of TNK-BP, he is taking a seat on the board of the company in October, after he steps down as CEO of BP.
TNK-BP, which is a joint venture between BP and Russian billionaires, is interested in expanding into the two markets, and in the September 30 board meeting are going to discuss the idea.
Board members of TNK-BP include four BP directors, four Russians, and three independent directors.
In an interview in Moscow, billionaire shareholder, Viktor Vekselberg, said the possibility of acquiring the BP assets will be on the agenda of the next meeting.
The strongest of the two options from TNK-BP's point of view are the Venezuelan assets.
Those assets produce about 110,000 barrels of oil a day.
While Tony Hayward won't be at this next meeting of TNK-BP, he is taking a seat on the board of the company in October, after he steps down as CEO of BP.
Tuesday, September 7, 2010
BP's (NYSE:BP) Norway Manager Not Aware of North Sea Sales
Conflicting reports have emerged concerning BP's (NYSE:BP) alleged interest in selling North Sea assets, along with a report over the weekend in the Sunday Times they were increasing their asset sales target from $30 billion to $40 billion.
Rebecca Wiles, who is BP's Managing Director for Norway, said she wasn't "aware" that there were any plans in place to sell North Sea assets of BP to help raise the $30 billion they've mentioned as their target in the past concerning liabilities and costs to clean up the region.
Wiles said concerning North Sea asset sales, “I’m not aware of us lining up any assets in the North Sea. We’re a growing business in Norway.”
As far as the increasing of the target number from $30 billion to $40 billion, Wiles added she hadn't heard anything about that either.
Being in Norway, it's possible Wiles isn't in the loop on these things, so it may or may not be important as to the actual plans BP may be initiating.
Rebecca Wiles, who is BP's Managing Director for Norway, said she wasn't "aware" that there were any plans in place to sell North Sea assets of BP to help raise the $30 billion they've mentioned as their target in the past concerning liabilities and costs to clean up the region.
Wiles said concerning North Sea asset sales, “I’m not aware of us lining up any assets in the North Sea. We’re a growing business in Norway.”
As far as the increasing of the target number from $30 billion to $40 billion, Wiles added she hadn't heard anything about that either.
Being in Norway, it's possible Wiles isn't in the loop on these things, so it may or may not be important as to the actual plans BP may be initiating.
BP (NYSE:BP) Raises Assets Sale Target to $40 Billion
With mounting liabilities, BP (NYSE:BP) has reportedly increased its asset sale target from about $30 billion to $40 billion, according to The Sunday Times newspaper.
There is a double-edge sword to the selling of assets by BP, as while they are raising capital to take care of immediate liabilities, they are losing production, which ultimately leads to loss of revenue and profits.
Estimates are after assets sales production will decrease by close to 8 percent. It's uncertain how much that'll increase with an additional $10 billion in asset sales added to the final amount, although if they're similar to estimates based on $30 billion, they could be as high a $11 to $12 billion in lost production, depending on the assets sold.
Although the former talks with Apache over the 26 percent stake BP has in the Prudhoe Bay oil field in Alaska, fell apart, reports are Apache (NYSE:APA)is back in talks again with BP about acquiring at least a portion of the asset, while Occidental Petroleum (NYSE:OXY) has also been named as a potential suitor.
There is a double-edge sword to the selling of assets by BP, as while they are raising capital to take care of immediate liabilities, they are losing production, which ultimately leads to loss of revenue and profits.
Estimates are after assets sales production will decrease by close to 8 percent. It's uncertain how much that'll increase with an additional $10 billion in asset sales added to the final amount, although if they're similar to estimates based on $30 billion, they could be as high a $11 to $12 billion in lost production, depending on the assets sold.
Although the former talks with Apache over the 26 percent stake BP has in the Prudhoe Bay oil field in Alaska, fell apart, reports are Apache (NYSE:APA)is back in talks again with BP about acquiring at least a portion of the asset, while Occidental Petroleum (NYSE:OXY) has also been named as a potential suitor.
BP's (NYSE:BP) Azerbaijan Assets Draw Interest of Gazprom (MM:GAZP)
The huge Russian gas giant Gazprom (MM:GAZP), said would be interested in the Azerbaijan assets of BP's (NYSE:BP) if they come up for sale.
That was the response of Gazprom's CEO Alexei Miller when asked if he would be interested in the assets by a reporter.
Miller responded, "We will be ready to consider it if there is such an offer."
Particularly noted by Miller was the Shah Deniz project in the Caspian Sea, where BP holds a 25.5 percent stake. Other Azerbaijan assets include the the Azeri-Chirag-Guneshli oil project, where BP has a 34.1 percent stake, and the Baku-Tbilisi-Ceyhan pipeline company which exports oil to Turkey.
If the assets are put up for sale, there is no doubt BP could sell them to Gazprom, as they've said a number of times in the past they want to acquire all the available gas in Azerbaijan.
That was the response of Gazprom's CEO Alexei Miller when asked if he would be interested in the assets by a reporter.
Miller responded, "We will be ready to consider it if there is such an offer."
Particularly noted by Miller was the Shah Deniz project in the Caspian Sea, where BP holds a 25.5 percent stake. Other Azerbaijan assets include the the Azeri-Chirag-Guneshli oil project, where BP has a 34.1 percent stake, and the Baku-Tbilisi-Ceyhan pipeline company which exports oil to Turkey.
If the assets are put up for sale, there is no doubt BP could sell them to Gazprom, as they've said a number of times in the past they want to acquire all the available gas in Azerbaijan.
Wednesday, September 1, 2010
BP (NYSE:BP) Completes Sale to Magellan Midstream (NYSE:MMP)
BP (NYSE:BP) has completed another sale, this time the selling off part of its 'Oil Storage and Pipelines' unit to Magellan Midstream (NYSE:MMP).
The Oil Storage and Pipelines assets sold include over 100 miles of active petroleum pipelines, along with oil storage capacity of 7.8 million barrels.
Tank inventory will also be acquired by the partnership for approximately $50 million.
The oil storage and pipelines were sold for $289 million.
The Oil Storage and Pipelines assets sold include over 100 miles of active petroleum pipelines, along with oil storage capacity of 7.8 million barrels.
Tank inventory will also be acquired by the partnership for approximately $50 million.
The oil storage and pipelines were sold for $289 million.
Tuesday, July 27, 2010
BP (NYSE:BP) Doubling Assets to be Sold to Raise Cash
It seems everything is on the table now as BP (NYSE:BP) fights to raise enough cash to help pay for the mounting liabilities related to the Gulf of Mexico oil spill.
Originally they had announced the goal of selling about $10 billion in assets to handle the load, but they raised that projection Monday to about $20 billion.
Once thought untouchable, and among their choice assets - oil fields in the North Sea - could reportedly be put up for sale, with the French company Total eager to enlarge their presence in the region. It would also be an easy deal to do if BP decides to go in that direction.
Prudhoe Bay was almost sold to Apache (NYSE:APA), but that deal fell through, although Apache acquired other assets in a separate transaction.
With BP securing billions in credit from a number of different banks, it seems to imply they're wary of using that credit line to pay off liabilities, as it could put them in an even weaker position, and would be expensive to access.
However they do it, this does show BP is struggling to raise the needed capital to handle the situation, and will evidently become a much smaller and weaker company before it's all through.
This is important, as everyone knew they would be smaller before things were over, but assumed their top assets would remain under the company umbrella and be a foundation to build on in the future. That idea could very well fall apart if assets in the North Sea end up being sold.
Originally they had announced the goal of selling about $10 billion in assets to handle the load, but they raised that projection Monday to about $20 billion.
Once thought untouchable, and among their choice assets - oil fields in the North Sea - could reportedly be put up for sale, with the French company Total eager to enlarge their presence in the region. It would also be an easy deal to do if BP decides to go in that direction.
Prudhoe Bay was almost sold to Apache (NYSE:APA), but that deal fell through, although Apache acquired other assets in a separate transaction.
With BP securing billions in credit from a number of different banks, it seems to imply they're wary of using that credit line to pay off liabilities, as it could put them in an even weaker position, and would be expensive to access.
However they do it, this does show BP is struggling to raise the needed capital to handle the situation, and will evidently become a much smaller and weaker company before it's all through.
This is important, as everyone knew they would be smaller before things were over, but assumed their top assets would remain under the company umbrella and be a foundation to build on in the future. That idea could very well fall apart if assets in the North Sea end up being sold.
Tuesday, July 13, 2010
BP (NYSE:BP) Selling $289 Million In Assets
Amid all the speculation of who will buy BP's (NYSE:BP) assets, Magellan Midstream Partners LP is the front runner ready to purchase $289 million worth. They have agreed to buy some of BP's storage and pipeline assets.
Magellan Midstream says they feel this will help them in the developing of its terminal in East Houston into a main distribution point. They will be getting more than 100 miles of pipeline, including a stretch of 40 miles that goes as far as the Texas City, Texas refining region.
Magellan is in the process of constructing a 2 million barrel capacity for oil storage. They will purchase a total of $7.8 million barrels of storage capacity. It will be stored at a U.S. oil hub located in Cushing, Oklahoma.
The deal is expected to close within 60 days according to Magellan, and to add to their earning immediately. The other talk pending is between BP and Apache, if agreed upon Apache would purchase $10 billion of BP's assets.
Magellan Midstream says they feel this will help them in the developing of its terminal in East Houston into a main distribution point. They will be getting more than 100 miles of pipeline, including a stretch of 40 miles that goes as far as the Texas City, Texas refining region.
Magellan is in the process of constructing a 2 million barrel capacity for oil storage. They will purchase a total of $7.8 million barrels of storage capacity. It will be stored at a U.S. oil hub located in Cushing, Oklahoma.
The deal is expected to close within 60 days according to Magellan, and to add to their earning immediately. The other talk pending is between BP and Apache, if agreed upon Apache would purchase $10 billion of BP's assets.
Monday, July 12, 2010
BP (NYSE:BP): Not Selling Assets, Not Selling Stock, Not Selling Shares
There has been many rumors surrounding whether potential investors would purchase BP (NYSE:BP). It seems to be more of a fairytale hope then anything else according to analysts.
There are several variables that must be looked at. For one, are BP's assets worth the hassle? With the thousands upon thousands of legal claims as well as the public relations issue, for any oil company to take on BP would be an extreme risk.
Paul Malchanov, an analyst for Raymond James in Houston, TX., said, " It's very debatable that any company would be comfortable wading into this legal nightmare, which would last many years. The biggest problem is getting your hands around the liabilities."
While the CEO of Petroleum and Resources Corporation, Doug Ober, said he's even heard traders talk about Conoco Phillips purchasing BP. " The likelihood of BP getting taken over is next to nil. Why would a U.S. company want to buy BP given the black eye that it has," said Ober.
Malchonov said he does not recommend BP for investors. Other companies like Chevron and Hess are trading at cheaper valuations. There is still to much risk and uncertainties with BP.
There are several variables that must be looked at. For one, are BP's assets worth the hassle? With the thousands upon thousands of legal claims as well as the public relations issue, for any oil company to take on BP would be an extreme risk.
Paul Malchanov, an analyst for Raymond James in Houston, TX., said, " It's very debatable that any company would be comfortable wading into this legal nightmare, which would last many years. The biggest problem is getting your hands around the liabilities."
While the CEO of Petroleum and Resources Corporation, Doug Ober, said he's even heard traders talk about Conoco Phillips purchasing BP. " The likelihood of BP getting taken over is next to nil. Why would a U.S. company want to buy BP given the black eye that it has," said Ober.
Malchonov said he does not recommend BP for investors. Other companies like Chevron and Hess are trading at cheaper valuations. There is still to much risk and uncertainties with BP.
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