British Petroleum (LON:BP) oversold relative to cost of oil spill clear up?
The share price of BP has been badly hit by the terrible oil spill in the Gulf of Mexico.
Since announcing news of the explosion on 21st April 2010 (Share price c647p) BP’s share price has fallen 16% wiping more than £19bn (cUS$15bn) off its market value. Many leading commentators consider that despite the implications the sell off looks overdone. Richard Griffiths of Evolution commented that the “Drop in market cap is way beyond the likely cost of the accident” His estimate is of a total net cost to BP of US$845m. Even after adding in US$2.5bn of punitive damages (similar to the sum for the Exxon Valdez disaster agreed in 2006) the numbers do not add up to…