Today’s Agenda

BP Oil Spill and Financial Impact

Jaltarang Elimination Round
Main Points
 Effect on BP’s Balance sheet
 Effect on BP’s Stock prices
 Managing Cash flow and charges
 Major Sufferers of BP Spill
 Stock Activity
 2nd and 3rd Quarter Financial Results
Sale of Assets
 BP Plans to sell its assets worth $30bn over
next 18 months.

 Net debt level to be reduced from $23bn to

$10bn in next 18 months.
Effect on Stock prices
 Stock prices fell by 52% in 50 days from $61
to $29 on NYSE.

 Shareholding pattern
 40%- UK Shareholders
 39%- US Share holders
 BP UK dividend payment forms a basis for

pension schemes.
Some facts
 On June 2, Credit Suisse estimated BP would
end up paying about $37 billion in total costs
for the spill, including $15.6 billion in clean-
up costs and $14.4 billion of liability claims.
This would absorb three years of BP’s free
cash flow after dividend payments and annual
capital expenses of $21.5 billion (at an
average price of $80 oil), according to in-
house analysts.
Will BP survive this Crises?
 Strong balance sheet
 Cash equivalent of $6.8bn as on 31Mar ’10
 Cash flow from operations in 09: $27bn but it

is expected to go up as economy recovers

and oil prices rises above $100. This can pay
the oil spill cost.
Financial Strength and Dividend
Policy
 Real oil and gas assets to use as collateral for
buying capacity.
 Dividend paid in 2009 were $10bn, cut to

large extent in 2010.

Stock price movement
Stock Activity
 Last Price 41.00
 52 Week High 62.38
 52 Week Low 26.75
 Volume 6.96 Mil
 Average Daily Volume (13wk) 9.47 Mil
 50 Day Moving Average 40.94
 200 Day Moving Average 43.98
 Volatility (beta) 1.10
Quarterly Results