Wednesday, July 14, 2010

"Anadarko Petroleum Faces High Hurdle in Proving BP Was “Grossly Negligent”" (APC)

The stock is trading down 1/2% at $47.38 and I am outta here. Thanks for the run. The stock is probably worth the $75 that Citi's analyst says it is, just different timeframes.
Getting to the bottom of the June 1 downgap is enough for me, we caught the run from the double bottom at 35 and change.
From Research Recap:
Anadarko Petroleum (APC) may be able to escape having to pay claims related to the Gulf oil spill if it can pass all the blame to BP plc (BP), according to an analysis by Covenant Review. an  However, as the independent credit research firm points out, gross negligence is a high hurdle to prove.
Covenant Review examined the October 1, 2009 Operating Agreement that governs the “Macondo Prospect”and reviewed relevant legal standards that may affect the relative liabilities of the three owners.  It is not possible at this time to accurately predict how liability will be divided between these parties because too many facts remain unknown, the authors note.
However, their analysis finds that:
  • Anadarko may escape contributing to claims and get paid by BP if BP was “grossly negligent” or engaged in “willful misconduct.”  While those are tough standards to meet, the magnitude of the disaster and the bad allegations against BP may put Anadarko in a good position.
  • The Operating Agreement calls for disputes between the parties to be submitted to arbitration, which means any direct dispute between Anadarko and BP will play out differently than it would in front of a jury and the influence of public opinion may be reduced. 
Covenant Review adds:
1) Gross negligence is a high hurdle to prove....MORE
Here's the run in real time postings:
Bullish Options Plays in Anadarko Petroleum (APC) 
UPDATED: Sometimes the Crowd is Right: Relatively Heavy Call Activity in Anadarko Petroleum (APC) 
"As Oil Spill Rages On, Option Players Remain Optimistic About Anadarko Petroleum Corporation" (APC; BP) 
Royal Bank of Scotland on BP: "BUY" and "Anadarko Trades at $99,999, Briefly Halted" (APC; BP) 
"Anadarko won't help pay for Gulf spill" (APC; BP)
Sometimes You Get Lucky: Anadarko was the Best Performing S&P 500 Component Stock last Week (APC)