SHOOT: It's easy to imagine the remedial expenditures doubling since the top spill failure. A conservative estimate is then $50 billion in expenses, bearing in mind that the ordinary running expenses for damage control are around $6 million per day. BP can also be sued for between $1000 and $4300 per barrel spilled by the Federal government. BP is likely to be sued by tens of thousands of other vested interests besides, from fishermen to ordinary property owners in the Gulf. Within 2 years from the present date BP ought to be technically bankrupt.
As mentioned, since the explosion on April 20, the BP Plc stock market cap has fallen from $187.3 billion to $137.6 billion - $49.9 billion, or 27 percent. That is $16.10 per share. In contrast, the average decline in BP’s peer group of Royal Dutch Shell, China Petroleum Ltd., Exxon-Mobil and Chevron is 15.1 percent.
Keeping the math simple presently, this suggests the market has assigned about half or $8.05 ($16.10/2) of BP’s share loss to expectations of its total reduction in value from the blowout. As the workout evolves, these expectations will likely fluctuate, and become more meaningful.
The $8.05 per share additional risk assigned BP common stock suggests the present value of future remedial expenditures is $25.0 billion ($8.05 x 3.1 billion shares outstanding). The stock market has become a prediction market, estimating the cost for the company will be $25.0 billion.