Halliburton rises on plea deal, stock buyback

NEW YORK (AP) -- Shares of Halliburton Co. rose Friday after the company agreed to settle a federal investigation into allegations it destroyed evidence connected to the 2010 Gulf oil spill and said it will buy back more than $3 billion in stock.

THE SPARK: On Thursday the U.S. Department of Justice said Halliburton Energy Services will plead guilty to one misdemeanor count of destroying evidence in connection with the oil spill. It will continue cooperating with the government's investigation and accept three years of probation. Halliburton said the maximum fine is $200,000 and said it will also make a voluntary $55 million contribution to the National Fish and Wildlife Foundation.

The Justice Department said it won't pursue further prosecution of Halliburton. The agreement is subject to court review.

The company also said it will buy back up to $3.3 billion in stock through a "Dutch auction" valuing the shares at $42.50 to $48.50 each. In a Dutch auction, shareholders can decide how many shares they want to tender and at what price within a specified range. The company then determines the lowest price per share within the range that lets it buy the amount of shares that it wants.

THE BIG PICTURE: Halliburton was British oil giant BP's cement contractor on the Deepwater Horizon drilling rig, which exploded after a well blowout. The disaster killed 11 workers and spilled millions of gallons of oil into the Gulf. The company acknowledged Thursday that it destroyed evidence from computer simulations of the final cementing job on the Macondo well. The simulations were run after the explosion and before the undersea gusher was capped.

Halliburton and BP have blamed each other for the failure of the cement job to seal the Macondo well.

THE ANALYSIS: Raymond James analyst J. Marshall Adkins said the stock buyback could add 20 cents per share to Halliburton's net income in 2014 by reducing the number of shares left outstanding. He said the repurchase would have a bigger impact than the settlement on the company's shares. He noted that civil litigation is ongoing.

Sterne Agee analyst Stephen Gengaro said the plea "in no way admits guilt to the actual cause of the disaster."

Adkins rates Halliburton shares as "Market Perform," and Gengaro has a "Buy" rating on the stock.

SHARE ACTION: Shares of Halliburton rose $1.67, or 3.8 percent, to $46.01 in afternoon trading. The stock is trading near its highest prices in almost two years after peaking at $46.66 on Monday.