Shares in BP traded over 400p for the first time in around a month on Monday – June 9 to be precise – as bid rumours swirled:
Meanwhile, BP’s CDS was quoted at its lowest spread – 335bps since June 8.
And with the price up over 9 per cent at pixel time in pretty heavy volume, isn’t it time the UK Takeover Panel called ExxonMobil?
It’s surely worth asking them if there’s any truth in the stories they are plotting a £100bn bid and have sought clearance from the White House to make an offer.
After all, somebody has to think of the knife catchers.
In reality of course, its entirely possible that the call has already gone in and the real reason for Monday’s move is that BP is very close to capping the ruptured oil well in the Gulf of Mexico.
But that’s not nearly as exciting, is it?
Update 15:42 (BST). Simmons & Company thinks the cap could be fitted real soon.
While BP expected the entire cap replacement process to take 4-7 days (from Saturday at noon CT), it appears to us that the company is tracking very well towards the faster-end of this timeline thus far. The old flange was unbolted and removed, and the transition spool installed and bolted on (a complicated process it seems to us, but one that went very quickly). Next up is installation of the 3-ram stack to top of the transition spool.
Meanwhile, the first of two relief wells, being drilled with the Development Driller III has reached a measured depth of 17,810 feet. 9 7/8 inch casing will be run before continuing on to intercept the original well at approximately 18,000 feet. Interception may occur towards the end of July, with the kill process taking anywhere from a few days to a couple weeks, depending on the status of the primary well and whether production comes from within the casing, the annulus, or both. The second relief well (drilled by Development Driller II) has reached approximately 16,000 feet measured depth and will cement casing before pausing operations so as to avoid interference with ranging and other activities with the first relief well.
Update II 16:18 (BST): Doug Suttles, BP’s chief operating officer, has told reporters the new containment cap could be attached later today reports Reuters. Meanwhile, the first of the two relief wells is just 190 feet from intercepting the blown-out well.
We have the cap very close and later today we’ll be attaching it,” Doug Suttles, BP’s chief operating officer, told a media briefing. “It could take well through the day to complete.”
Once the new and larger cap is installed, Suttles said BP will shut down two vessels siphoning oil from the leak — one of which is expected to start up on Monday — to monitor pressure and check the integrity of the blown-out well. Those tests could last 48 hours or longer, he said.
If the cap works as intended, all crude oil should be contained and “there would be no flow,” Suttles said.
“Depending on the results, we’ll either continue to contain the flow while we wait on the relief well
Related links:
Fantasy oil major M&A – FT Alphaville
Would a bid be good or bad? – Robert Peston