BP's stock JUMPED 9.8% today.
This was great news for shareholders.
BP Shares Surge After $20B Oil Spill Fund Deal
Source: Wall Street Journal
Shares in U.K.-listed oil giant BP PLC (BP) jumped as much as 9.8% in London Thursday after the company struck a deal with the Obama administration a day earlier to set aside $20 billion to cover Gulf of Mexico oil spill costs by slashing spending. Several analysts upgraded the embattled company to a "buy" recommendation, despite BP's promise to cancel at least $7.8 billion in dividends, sell off $10 billion in assets and reduce capital expenditure by at least $4 billion as it looks to build up the $20 billion fund over the next 3 1/2 years. The fund will not cover civil or criminal penalties.
"BP's package agreed with President Obama should cool the political heat and provide some degree of comfort to equity and bond markets, shareholders," said Evolution Securities analyst Richard Griffith. BP struck the agreement with U.S. President Barack Obama, whose fierce criticism of the company has played a big part in a steep collapse in its share price recently. BP Chief Financial Officer Byron Grote said the deal gives his embattled company a more constructive "partnership" with the Obama administration.
