First BP relief well has blown-out well in sights
Concern over its ability to pay the rapidly escalating cost of the worst spill in U.S. history continued to weigh on its shares, however, sending its London stock to a 14-year low and further hitting its credit profile.
BP said in a statement on Friday the first of two relief wells had successfully detected the MC252 well and would continue to a target intercept depth of 18,000 feet, when "kill" operations would begin.
As concern grows that bad weather could hamper clean-up operations, BP said 37,000 people, 4,500 vessels and 100 aircraft were helping the response effort, and that almost 850,000 barrels of oil and "oily liquid" had been captured or burned off the sea.
BP said, to date, clean-up and compensation costs for the ecological disaster, which has devastated the region, hit President Barack Obama's poll ratings and led to a contested ban on deepwater drilling, was $2.35 billion.
Concern the firm may need to raise extra cash to help fund the clean up pushed its shares to a 14-year low and pushed its credit default swaps wider.
Nomura analysts, in a note, said the perception of near-term credit risk was damaging BP and that it may have to assure the market it had enough funds to cap the well.
"With debt expensive and asset sales taking time, we consider that equity-linked financing -- perhaps backed by Sovereign Wealth -- could prove the attractive short-term solution," they said.
Graphic shows the relief well design, and progress to June 20th. Credit: BP, Plc: http://www.bp.com/genericarticle.do?categoryId=9033657&contentId=7061734
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