Oil Spill Losers Are Winners Today (BP, HAL, APC)

Some of the biggest losers from the Gulf oil spill are winners today as the companies and Wall Street have come out to defend the stocks, which have seen tens of billions of dollars of lost market value. Stock bargain hunters are busy figuring out the liabilities each company may face under a worse-case scenario and making bets accordingly.

• BP (NYSE: BP), the company which has the most exposure to the spill, is up 2.4% today. The company has lost 39% of its market value since the oil rig blew in April. Analysts at JP Morgan are now pounding the table on the stock, saying the company will be able to maintain the dividend and the market cap loss of $37 billion is "unprecedented" as they have never seen such a universal set of extremely depressed fundamental metrics. In addition, the company will be meeting with shareholders later in the week and the CEO is expected to say they will continue to support the dividend.
  
  
• Halliburton Company (NYSE: HAL) is up 9.4% today, after losing 36% since the leak started. Today the company is taking its case directly to shareholders in a conference call. Halliburton said the Gulf of Mexico represented approximately 12% of its North American revenues in 2008, approximately 16% in 2009 and approximately 13% in the first quarter of 2010. Approximately 65% of Halliburton’s current Gulf of Mexico business is related to deepwater activities. Halliburton believes that it has performed all work with respect to the well that was being drilled by the Deepwater Horizon in accordance with the well owner’s instructions and that the applicable contracts provide for full indemnification of Halliburton for all potential claims and expenses. In addition, Halliburton has a general liability insurance program of $600 million subject to retention and other costs of $7 million.
  
  
• Anadarko Petroleum Corporation (NYSE: APC), which has 25% exposure to the Deepwater Horizon well, is up 3.6% today after losing 43% since leak started. Today UBS lowered their price target on the stock from $86 to $68, but noted the stocks is trading at a 40% discount to their NAV estimate for proved reserves only. The firm said APC could fund a $5 billion liability with cash on hand and modest asset sales. They said even if Anadarko's liability is $12.5 billion, NAV would still be $68 per share.

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