- BP "can now focus on future growth and moving on," CFO Brian Gilvary said after news of the $18.7B deal to settle all federal and state claims from the 2010 Gulf of Mexico oil spill.
- "This settlement brings clarity and certainty for the future payments, so that is sort of a relief," said an analyst at Liberum brokerage, a relief that sparked a 5% rally in the stock today.
- The $18.7B is considerably less than the worst-case scenario, and BP used lower oil prices - which cut its ability to pay a huge fine - to win a payout plan that stretches out over several years.
- The settlement also puts BP on solid ground that will allow it to increase its dividend and expand, says Morningstar's Stephen Simko.
- But BP is a much different company than it was before the disaster - it sold about a third of its assets to pay liabilities and its production slumped by ~1M bbl/day - and it is a difficult time for a repositioning in a time of low oil prices.
- BP could become an acquisition target since one of its major liabilities is now addressed, but with a market cap still at ~$120B, will keep away all but a select few potential suitors.