Tags: TX | Gulf | Oil | Spill | Transocean

Transocean Shares Fall After UBS Lowers Target

Wednesday, 02 Jun 2010 03:00 PM

Shares of Transocean Ltd. fell Wednesday and an analyst cut her target price on the stock, saying fallout from the oil spill and a moratorium on Gulf of Mexico drilling will hold down the shares.

UBS analyst Angie Sedita, who has a "Buy" rating on Transocean, cut the 12-month target for the stock to $82 from $90.

Transocean shares have fallen by nearly half since the April 20 explosion, and the Obama administration has launched civil and criminal investigations into the event.

BP PLC, Transocean, oilfield-services provider Halliburton Co. and Cameron Inc., which made the blowout preventer that apparently failed, have borne the brunt of criticism.

Company executives expressed confidence Friday that BP will honor a contract provision and reimburse Transocean for spill-related costs.

BP leased Transocean's Deepwater Horizon drilling rig, which exploded and sank, triggering the massive Gulf oil spill.

Sedita said however that the spill will hang over Transocean's stock "and that with the new six-month drilling moratorium it will be difficult for the stock to rise."

Shares fell $2.25, or 4.5 percent, to $47.79 in midday trading. Earlier, the shares hit a 52-week low of $46.63.

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