T. Boone: BP a good buy

T. Boone Pickens, the billionaire energy investor, said that BP Plc is a good investment as the shares rebound after losing more than half their value following the Gulf of Mexico oil spill. “You're going to have to stand a little more heat, but I think they'll kill the well by mid-August,” Pickens, chairman of Dallas-based BP Capital LLC, said in an interview with Kathleen Hays on Bloomberg Radio's “The Hays Advantage” program yesterday. “They will further damage their image when they start the investigation, but today BP is good buy.” BP has lost 48 billion pounds ($73 billion) of its market value since the Deepwater Horizon drilling rig exploded in the Gulf of Mexico on April 20, causing the biggest oil spill in U.S. history. The company agreed last month to set aside $20 billion for cleanup and litigation costs, and said it will sell assets, reduce spending and cancel its dividend for three quarters to raise cash. The shares fell 9.35 pence, or 2.3 percent, to 401 pence in London yesterday after BP suspended tests to determine if it can halt the leak before efforts to permanently plug it are completed next month. BP, based in London, reached a five-week high July 13 of 410.4 pence. The company's American depositary receipts fell 70 cents, or 1.9 percent, to $36.18 in composite trading on the New York Stock Exchange yesterday. One receipt represents six ordinary BP shares. Pickens's fund held no shares in BP as of the end of March, according to a regulatory filing. The fund held shares of Transocean Ltd., which leased the Deepwater Horizon rig to BP. It also owned shares of Anadarko Petroleum Corp., a partner in the well, and Halliburton Co., which was contracted to do work on it. Adding Transocean “We still have the Transocean, I think we added to them,” Pickens said of the shares. BP said this week that it may be able to stop the leak with a newly fitted cap while relief wells are completed that will permanently kill the well. The company said yesterday it delayed pressure testing of the cap to give scientists more time to study the process.