The Oil Drum: Pressure Testing, Oil Imports, and More...

[profgoose]

BP's Deepwater Oil Spill - Results as the Pressure Testing Begins - and Open Thread (The Pressure Isn't Quite Where It's Supposed to Be)

http://www.theoildrum.com/node/6734

US Oil Imports - Looking at a Few Graphs

http://www.theoildrum.com/node/6735

Drumbeat: July 16, 2010 (Headline: Through 2007 Energy Spending Rose 79%, but Use Increased Just 2.6%)

http://www.theoildrum.com/node/6736

BP's Deepwater Oil Spill - Starting the Testing Program - and Open Thread 2 (Yesterday)

http://www.theoildrum.com/node/6733

[Junkdrawer]

1. Here's my understanding:

Pressures of 4000 to 5000 would indicate severe damage...

Pressures of 8000 to 9000 would indicate little or no damage...

The peak pressure found during testing was 6700. So there's probably *some* damage and right now they're using the bots and sonar to try to find where the damage (if any) is and how extensive it is.

And, as usual, we'll probable get the answers LATE Friday well after the markets close for the weekend.

[dipsydoodle]

2. What have the markets got to do with anything

Share value has no bearing on their balance sheet.

[Junkdrawer]

3. Too much below $30/share and BP is a good target for takeover...

Management usually tries to avoid that....

[dipsydoodle]

4. If Exxon try

apparently the EU would block it under its own anti trust laws - never mind the USAs. Other than that
Petrochina would be the most likely.

[Statistical]

7. Nominal share price has no meaning.

Is 2 $10 bills worth more or less than a single $20 bill? Is 2 shares at $10 worth more or less than a single share at $20.

BP stock price in UK is about $6. It has been below $12 since the company was formed.
http://www.google.com/finance?q=LON:BP (UK prices stocks in pence 1/100th of a pound).

[Junkdrawer]

9. Hostile Takeover:

...

A hostile takeover can be conducted in several ways. A tender offer can be made where the acquiring company makes a public offer at a fixed price above the current market price. Tender offers in the USA are regulated with the Williams Act. An acquiring company can also engage in a proxy fight, whereby it tries to persuade enough shareholders, usually a simple majority, to replace the management with a new one which will approve the takeover. Another method involves quietly purchasing enough stock on the open market, known as a creeping tender offer, to effect a change in management. In all of these ways, management resists the acquisition but it is carried out anyway.

...

http://en.wikipedia.org/wiki/Takeover

BP faces ExxonMobil takeover bid speculation


...
BP's chief executive, Tony Hayward, is well aware of the threat of a hostile bid and last week held a series of meetings with potential "friendly" investors including the Kuwait Investment Office. A big strategic investor would make it harder for the likes of ExxonMobil or China's National Offshore Oil Company (CNOOC) to win control in a hostile takeover bid.

The Kuwaitis already have a 1.75% stake, but BP would like it to increase that to as much as 10%. Hayward is also understood to have met with another sovereign wealth fund, the Abu Dhabi Investment Authority (ADIA).

The cost of the spill to BP has already past $3.1bn (£2bn), and the company has pledged some of its assets as security to the US government while it builds up a promised $20bn compensation fund. Analysts at Goldman Sachs estimate the final bill for the disaster caused by the explosion on the Deepwater Horizon rig, which killed 11 workers, could run to $70bn.

BP has already began talks with rivals about selling off assets to help bolster its financial position. CNOOC is interested in buying the Argentinian gas businesses partly owned by BP. The UK oil firm's joint Russian venture TNK-BP has also opened talks about buying assets outside Russia.

...


http://www.guardian.co.uk/business/2010/jul/11/bp-faces-exxonmobil-takeover-bid-speculation

[Statistical]

10. Once again the STOCK PRICE is not relevent.

Only the takeover acquisition cost.

A company with 1 trillion shares at $1 per share = $1 trillion
A company with 10 shares at $1 billion per share = $10 billion.

Is the first company more of a takeover target because of it's $1 share price? Starting to see the point?

Saying some magic number on the share price determines takeover risk for all stocks is silly. It is like saying I am richer than you because I have 1 $100 bill and you have "merely" 10 $10 bills.

I never said that BP doesn't face a takeover risk. Any company with good assets and a "trauma" faces that risk. I was simply saying the share price has no meaning.

Tomorrow BP could do a 10 to 1 split and the share price would be roughly $3.80 per share. Would takeover risk go up or down?
Tomorrow BP could do a 10 to 1 reverse split and the share price would be roughly $380 per share. Would takeover risk go up or down?

Still I doubt regulators (both in UK and US) would ever allow a takeover. Simply too much consolidation. Our regulators may be bought but I doubt UK will go for it.

[Junkdrawer]

12. What on earth would make you believe I didn't understand that?

Of course I'm looking at BP's stock price at BP's current number of outstanding shares. The financial news was rife with takeover speculation in the past few weeks and the $30/share mark has been mentioned several times as the danger point.

[Statistical]

13. At $30 per share BP has an enterprise value of roughly $130 billion.

That is a huge pill to swallow and number of companies that could do that can be counted on one hand.

Even for (the second largest company in the world) the combined company would represent an increase in market cap by over 50% and put the company close to half trillion mark.

Any company big enough to handle that kind of a merger is likely to big to be a approved for that kind of merger. Any company small enough for approval simple couldn't afford that kind of a takeover.

Nobody is acquiring BP unless the company becomes much much much cheaper and in a far more desperate situation (cap blows, stock tanks another 50%, inability to raise funds, unable to pay escrow, etc).

[Subdivisions]

5. Whoaaaaa-nelly! Look at all the productions peaks in that

imports article. Here is the most important to us:



Google: Export Land Model.

Someone once said: "The American way of life is non-negotiable." So, will we let exporting countries get away with sending us less and less oil each month?

[SidDithers]

6. K&R...

thanks for the links, profgoose

Sid

[pscot]

8. K&R

n/t

[Scurrilous]

11. K & R

:thumbsup: