Halliburton Co.'s agreement to pay $1.1 billion to settle most of the lawsuits over its role in the biggest U.S. offshore oil spill helps it avoid billions more in potential penalties down the road.
The oilfield services company, accused of doing defective work on BP Plc's Macondo well before it exploded in 2010, killing 11 men and dumping millions of barrels of crude oil into the Gulf of Mexico, said today the agreement resolves "a substantial majority" of its liability in the disaster.
Halliburton's settlement comes as the federal judge overseeing oil-spill cases weighs fault for the accident, and averts the risk of a more costly judgment against the company in favor of some spill victims. The agreement removes much of the uncertainty that has plagued Halliburton for the past four years as investors waited to see how much the company might be hurt by payouts in the case. With its biggest piece of liability resolved, Halliburton can refocus its attention on developing new oilfield technology that will help it boost profits worldwide.
"It's actually a pretty decent settlement for them," said Rob Desai, an analyst at Edward Jones in St. Louis, who rates the shares a hold and owns none. "This eliminates an overhang."
Read more at Roff's: http://www.roffs.com/2014/09/halliburtons-1-1-billion-spill-agreement-avoids-bigger-payouts