Transocean Shares Rise As Co Looks Less Liable Than BP

17th Jun 2010 20:58

By David Benoit Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Shares of Transocean Ltd. (RIG) on Thursday recovered some of the battering they've suffered during the oil spill crisis in the Gulf of Mexico, as BP PLC (BP, BP.LN) executives faced a public grilling and it continued to look less likely Transocean would face similarly huge liabilities. While Transocean was operating the Deepwater Horizon rig when it blew in late April, leading to the ongoing oil geyser in the Gulf, the well it was drilling was owned by BP and the U.K. oil giant has been considered liable for the most damages. So while BP's chief executive and chairman appeared before a U.S. House of Representatives committee on Thursday and were blasted by congressmen, the dire situation Transocean faced looked a bit brighter. Shares of the company climbed 3.2% to $48.52 in recent trading, and earlier hit a high of $49.99. Still, the shares are still down 14% in June and have been nearly halved since the explosion. BP, meanwhile, slipped 0.8% to $31.60 on Thursday, a day after it announced it was setting up a $20 billion fund for paying claims and suspending its dividend payments. Sterne Agee analyst David Havens said the perception the liability is with BP has slowly sunk in, so while all the shares have been battered, the market may have overreacted. "One of the big uncertainties was trying to decipher the fault and legal liability, and when that was unclear, people took everyone and anyone involved out to the woodshed on this," Havens said. "It's becoming more and more clear that BP owns the majority of the liability." Havens said a similar move to Transocean's was seen earlier in the week in Halliburton Co. (HAL) when a letter from the House of Representative members cited five key reasons for the failure, largely blaming BP. Congressional investigators said documents uncovered as part of their inquiry into the spill have raised "serious questions about the decisions made by BP PLC in the days and hours before the explosion on the Deepwater Horizon" drilling rig. Havens said it became clear then Halliburton, which was running the cementing process in the well, was less at risk than BP. Halliburton's shares, which had climbed 9.3% total over the past two sessions, recently were oscillating between slight gains and losses. He said it has just taken another couple days for people to warm more to Transocean, which rose 8.3% in the session after news of the letter but then retreated 3.1% on Wednesday. -By David Benoit, Dow Jones Newswires; 212-416-2458; [email protected]; (END) Dow Jones Newswires June 17, 2010 15:58 ET (19:58 GMT)