Transocean shares jump on Gulf settlement reports
Transocean shares soar on reports it will settle Gulf oil spill claims with Justice Department
NEW YORK (AP) -- Transocean Ltd. shares soared to their highest level in almost a year and a half Thursday on reports the oil drilling company will pay $1.4 billion to resolve the Justice Department's civil and criminal investigation into its role in the Deepwater Horizon disaster.
Transocean was the owner of the drilling rig that sank after an explosion killed 11 workers and spawned the massive 2010 oil spill in the Gulf of Mexico. A formal announcement of the settlement is expected later Thursday.
Shares jumped $3.44, or 7.4 percent, to $49.68 in afternoon trading. The last time the shares gained more than 7 percent was in August of 2011.
Wells Fargo analyst Matthew D. Conlan said investors are likely relieved that the settlement amount wasn't higher. Transocean has reserved $2 billion for the federal claims, as well as claims filed on behalf of workers who were killed or injured when the rig exploded that remain to be settled.
Transocean shares were trading around $90 just before the Deepwater Horizon sank in April 2010. They've traded between $43 and $50 over the past six months.
"The settlement removes a major uncertainty surrounding the stock," Conlan wrote in a note to clients.
