BP appears to have successfully plugged the well

[dan_s]

NEW YORK (Dow Jones)--Uncertainty about BP PLC's (BP) latest effort to plug the Gulf of Mexico oil spill, along with a government halt to much of the planned exploratory drilling off U.S. coasts, weighed heavily on shares of offshore-energy companies Friday.

The group had made significant gains Thursday morning after a U.S. Coast Guard official said BP's "top kill" maneuver had successfully prevented oil and gas leaking from the well.

But the stocks fell Friday on a combination of more cautious language from BP, along with President Barack Obama's announcement Thursday afternoon that he was halting much of the planned or current drilling off U.S. coasts, including all 33 rigs developing exploratory wells in the deep waters of the gulf. Obama will also cancel or temporarily suspend pending lease sales and drilling in Virginia and the Arctic.

BP shares were recently down 4.8% to $43.21, as Transocean Ltd. (RIG, RIGN.EB), the owner of the rig that BP leased, declined 4.4% to $57.10. Meanwhile, shares of Halliburton Co. (HAL), which did cementing work on the rig, dropped 8% to $24.83, as Cameron International Corp. (CAM), which designed a part meant to prevent a blowout, fell 3.1% to $36.90.

Offshore drillers were broadly lower, including Pride International Inc. (PDE), down 4.8% to $25.01, and Noble Corp. (NE), down 6.3% to $28.20.

Several energy companies with heavy exposure to deepwater drilling operations in the Gulf of Mexico had already begun falling Thursday afternoon, amid worries about the ban on new permits and drilling.

Among the stocks taking the biggest hit were Hornbeck Offshore Services Inc. (HOS), recently down 6% to $15.55, and ATP Oil & Gas Corp. (ATPG), down 5.6% to $11.38.

Tudor Pickering said the drilling halt is generally bad for near-term financial performance and/or value creation for all exploration-and-production and oilfield service companies involved in deepwater. But unless deepwater is never drilled again--a very unlikely scenario--things are just being delayed, the firm said, adding the true impact on stock values isn't big.

The halt is good news for onshore drillers, the firm added, a point that investors appeared to agree with Friday.

Several companies focused on onshore drilling were gaining recently, with Helmerich & Payne Inc. (HP) up 1.4% to $37.22 and Nabors Industries Ltd. (NBR) up 3.8% to $19.09.

Meanwhile, BP's Chief Executive Tony Hayward said the company's "top kill" method, in which drilling fluid called mud is pumped into the leak to try to overcome the leaking oil, is now being supplemented by a so-called "junk shot." That involves pumping "loss control material...to attempt to create a bridge against which we could pump more mud," he said.

But he cautioned it was too early to tell whether either method was having any success. He said it is probably at least 48 hours before the company could have confidence that it succeeded, he said. BP officials said late Thursday that much of the injected kill mud was flowing out into the ocean instead of going down the well.

"Yesterday's euphoria wearing off a bit as it feels like BP's commentary is getting a bit more wary," Tudor Pickering analysts wrote in a note.

-By Jennifer Cummings, Dow Jones Newswires; 212-416-2474; jennifer.cummings@dowjones.com

(END) Dow Jones Newswires