GREY:NKRSF - Post by User
Post by
Bigwhiskeyon Mar 13, 2016 10:31am
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Post# 24652900
3 years of “diligence”
3 years of “diligence”April 20, 2010: Explosion on Deepwater Horizon drill rig results in major oil spill at BP’s Macondo prospect in the Gulf of Mexico BP announces plans to divest $30 billion in assets to meet the costs of spill Amidst divestitures, BP announces one major acquisition: a 30% interest in D6 and the rest of Reliance’s offshore India assets − Committing $20 billion in upfront and future capital to the assets Despite Macondo, BP among savviest deepwater players in the world − Rumors of BP interest in D6 surfaced in 2008, indicating >3 years of “diligence” − BP’s major commitment amidst all the negative headlines reconfirms our view that the current problems are short-term in nature An assets worth can be determined by what a private market participant would be willing to pay for it − BP’s 30% purchase implies a $47-59/share value for Niko’s 10% interest plus $72/share in future capital spending commitments − While there were other assets in the deal, we believe >75% of the transaction value resides in Niko’s D6, NEC-25, and D4 assets