BP shares drop in New York

The Associated Press ~ staff The News
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Company says Gulf leak cost rises to $2.35 billion

BP shares fell nearly four per cent in New York Friday. If the decline holds, BP will have lost more than $100 billion in market value since a rig it operated exploded in the Gulf of Mexico.

Earlier, the company said the cost of responding to the Gulf oil leak has risen to $2.35 billion.

The escalating costs, plus potential legal liabilities and BP's continuing struggles to contain the leak - now estimated at between 1.5 million and 2.5 million gallons per day - have eroded investor confidence.

NEW YORK -

BP shares fell nearly four per cent in New York Friday. If the decline holds, BP will have lost more than $100 billion in market value since a rig it operated exploded in the Gulf of Mexico.

Earlier, the company said the cost of responding to the Gulf oil leak has risen to $2.35 billion.

The escalating costs, plus potential legal liabilities and BP's continuing struggles to contain the leak - now estimated at between 1.5 million and 2.5 million gallons per day - have eroded investor confidence.

BP's shares closed at $60.48 on April 20, the day of the rig blast. On Friday, they dipped as low as $27.07 and traded at $27.69 around midday.

At that price, BP shares have lost $102.63 billion in value since April 20 and $12.74 billion this week alone.

Analysts at Collins Stewart continued to recommend BP shares as a "buy" in a research note released Friday. The company previously said an investment in BP was "not one for the faint-hearted."

BP said a containment cap was continuing to collect some of the oil and gas flowing from the seabed, following a 10-hour interruption on Wednesday.

Even before that latest setback, the government's worst-case estimates suggested the cap and other equipment were capturing less than half of the oil leaking from the sea floor. And in recent days, the "spillcam" video continued to show gas and oil billowing from the well.

Last week, BP bowed to U.S. President Barack Obama's demand that it set up a $20-billion escrow fund to cover damages and to suspend dividend payments.

Organizations: BP, Collins Stewart

Geographic location: New York, Gulf of Mexico, U.S.

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  • Steve
    July 02, 2010 - 13:16

    It is quite easy to see why BP officials were - low balling - the numbers when this disaster first happened. They should be thankful with all of their miscues, that there stock and company itself haven't tanked long before this. What is it you are always preached to a s you grow up - Honestly is the best policy! If BP had only followed this very simple idea?

  • Steve
    July 01, 2010 - 19:57

    It is quite easy to see why BP officials were - low balling - the numbers when this disaster first happened. They should be thankful with all of their miscues, that there stock and company itself haven't tanked long before this. What is it you are always preached to a s you grow up - Honestly is the best policy! If BP had only followed this very simple idea?