Potash (POT) (RIG) (CCJ) (CHK) (EPL) (UDRL) (AGU) Ratings Changes and Initiations

Shares of Potash Corp (POT), Transocean (RIG), Cameco Co. (CCJ), Chesapeake Energy (CHK), Energy Partners, Ltd. (EPL), Union Drilling, Inc. (UDRL) and Agrium (AGU) had ratings on them adjusted or initiated by analysts.

Goldman Sachs (GS) upgraded Transocean (RIG) from a "Sell" rating to a "Neutral" rating. They have a price target of $54.00 on the company.

TD Securities downgraded Cameco Co. (CCJ) from a "Buy" rating to a "Hold" rating. They have a price target of $24.00 on the company.

Stifel Nicolaus downgraded Chesapeake Energy (CHK) from a "Buy" rating to a "Hold" rating. They have a price target of $22.00 on the company.

Stifel Nicolaus downgraded Energy Partners, Ltd. (EPL) from a "Buy" rating to a "Hold" rating.

Gabelli downgraded Union Drilling, Inc. (UDRL) from a "Buy" rating to a "Hold" rating.

Dundee Securities initiated coverage on Agrium (AGU). They placed a "Buy" rating on the company.

Dundee Securities initiated coverage on Potash Corp. (POT). They placed a "Buy" rating on the company.

Trina (TSL) (AKS) (KGI) (RIG) (EPL) Ratings Changes

Trina Solar (TSL), AK Steel Holding Co. (AKS), Kirkland Lake Gold Inc. (KGI), Transocean (RIG) and Energy Partners, Ltd. (EPL) had ratings on them changed or initiated by analysts.

Credit Agricole downgraded AK Steel Holding Co. (AKS) from an "Underperform" rating to a "Sell" rating.

CIBC downgraded Kirkland Lake Gold Inc. (KGI) from an "Outperform" rating to a "Sector Perform" rating.

Guggenheim downgraded Transocean (RIG) from a "Buy" rating to a "Neutral" rating. They have a price target of $50.00 on the company.

Raymond James downgraded Trina Solar (TSL) from a "Market Perform" rating to an "Underperform" rating.

Brean Murray initiated coverage on Energy Partners, Ltd. (EPL). They placed a "Buy" rating on the company.

Transocean (RIG) (SGEN) (SD) (PCG) (MED) Downgraded

Transocean (NYSE: RIG), Seattle Genetics, Inc. (NASDAQ: SGEN), SandRidge Energy Inc. (NYSE: SD), PG&E Co. (NYSE: PCG) and Medifast, Inc. (NYSE: MED) were downgraded by analysts.

Transocean (RIG) was downgraded by Macquarie from a “Neutral” rating to an “Underperform” rating.

Seattle Genetics, Inc. (SGEN) was downgraded by Piper Jaffray (NYSE:PJC) from an “Overweight” rating to a “Neutral” rating.

SandRidge Energy Inc. (SD) was downgraded by Stifel Nicolaus from a “Buy” rating to a “Hold” rating.

PG&E Co. (PCG) was downgraded by Caris & Company from a “Buy” rating to a “Hold” rating.

Medifast, Inc. (MED) was downgraded by Janney Montgomery Scott from a “Buy” rating to a “Neutral” rating.

Transocean (NYSE:RIG) Facing Near-Term Challenges

JPMorgan (NYSE:JPM) and Wedbush maintained their ratings on Transocean (NYSE:RIG), but both see in the near term that they have challenges which will weigh on the stock.

"We believe this discount is warranted given 1) the medium-term view for lower offshore dayrates across all asset class, 2) costs will likely rise with greater safety requirements and more frequent maintenance, and 3) that liability from the Macondo incident remains highly uncertain," said JPMorgan.

Wedbush said, "Despite significant upside to our target price, we are maintaining our HOLD rating on RIG as overhang from current GOM offshore drilling moratorium persists. With a premium fleet, strong secular growth in deepwater and primarily oil leverage, we would expect RIG to rise in absolute terms. Given the defensive nature of its backlog in what has become a market increasingly seeking a return to risk, however, we would not expect RIG to outperform more operationally leveraged jackup names in the near-term."

JPMorgan maintained an "Underweight" on Transocean, while Wedbush kept a "Hold" on them.

Transocean closed Wednesday at $63.96, gaining $0.36, or 0.57 percent. Wedbush has a hefty price target of $97 on the shares of the company, JPMorgan is far below that at $55 a share.

Transocean (NYSE:RIG) Slashing Pay for Injured Workers to $25 a Day

In a recent court filing, Transocean (NYSE:RIG) notified its workers injured from the BP (NYSE:BP) oil rig explosion that they would be having their pay cut to $25 a day as of December 15, although they said the offer is on the table until December 31.

Of the 126 people working on the Deepwater Horizon rig, most worked for Transocean, with 9 out of the 11 workers who perished working for the company.

According to Transocean, only 17 members of their crew working on the oil rig were injured.

Most of those asserting they were injured made between $10,000 to $15,000 monthly working for Transocean, according to an attorney representing over 20 of the alleged injured.

Attorneys for the alleged injured say the pay cut will pressure their clients to settle more quickly than they otherwise would have. But of course to keep non-working employees on the payroll at the wages mentioned above is a recipe for economic disaster, and an unrealistic expectation.

Transocean made an offer to other rig workers in September, offering them lump sum payments equal to six months' salary.

Survivors of the workers who perished in the accident continue to receive full salary and benefits, along with those severely injured.

BP (NYSE:BP) Will Waive Liability Cap

Last week when BP (NYSE:BP) would go on record at a court hearing about waiving the liability cap instituted via the Oil Pollution Act of 1990, it caused a mini uproar and confusion after they had publicly stated in the past they would waive the restrictions.

That changed today and clarity was brought to the situation as BP said in a court filing they would indeed waive the liability cap.

Also per the filing, BP was generous with their advice for other major players in the Gulf spill, encouraging Transocean Holdings LLC (NYSE:RIG), Anadarko Petroleum Corp (NYSE:APC) and MOEX Offshore 2007 LLC to also waive the cap.

MOEX is the majority owner of Mitsui (Nasdaq:MITSY), which has a 10 percent stake in the Macondo oil well. Anadarko has a 25 percent stake and BP the remaining 65 percent. Transocean owned the Deepwater Horizon oil rig which was leased by BP from them.

Also in the filing BP stated it has reserved the right to go after reimbursement for money it has already paid from its partners. Much of that remains to be decided based on whether they are designated as being grossly negligent in the matter.

If they are, the other participants and owners probably won't have to pay damages to BP.

Transocean (NYSE:RIG) Bonds Surge After BP (NYSE:BP) Issue Generates Optimism

Transocean Ltd. bonds (NYSE:RIG) took off after the recent issuance by BP (NYSE:BP) engendered optimism in the oil companies connected to the oil spill in the Gulf of Mexico.

Trading on Transocean bonds was the highest in the U.S., which were valued at $900 million for the 6.5 percent securities, which are due in 2020.

BP issued $3.5 billion of bonds on September 28, which broke par since then, generating the interest in Transocean bonds, which were issued on September 16.

Transocean owned the Deepwater Horizon oil rig which went down, leasing it to BP.

BP (NYSE:BP), Transocean (NYSE:RIG), Halliburton (NYSE:HAL) Sued by Three Mexican States

Lawsuits have been filed by three Mexican states against BP (NYSE:BP), Transocean (NYSE:RIG) and Halliburton (NYSE:HAL), asserting the alleged oil plume has reached their shores.

The lawsuits were filed by Tamaulipas, Veracruz and Quintana Roo in a San Antonio court. The beaches of the three Mexican states are popular with tourists and locals.

Damages sought from the Mexican states weren't specified.

There was no comment from BP on the lawsuits. Halliburton said through spokeswoman Teresa Wong that the allegations were without merit, and Transocean said they'll let their position be known during the legal process.

BP (NYSE:BP) Claims Can be "Bundled" says Barbier

U.S. Disrict Judge Carl Barbier has given the go ahead to allow claims against BP (NYSE:BP) to be placed in what are being called "pleading bundles," which both the defense and plaintiff lawyers agreed to.

Another agreement was made concerning the complaint process itself, which will be simplified in order to make the filing go quicker.

How that will work is the lawyers of the oil companies will put together a "master" complaint which includes all the causes of action brought against Transocean (NYSE:RIG), Halliburton (NYSE:HAL) and BP, or other oil companies connected to the oil spill.

After the plaintiffs file the master complaint, defense attorneys will be able to respond with a "master" answer.

From there, anyone who wants to file a lawsuit can simply check off every cause of action against the oil companies they want to go after.

An example of what a pleading bundle would entail is a grouping of those claiming economic losses, such as hotels and restaurants.

Transocean (NYSE:RIG) Issue with Blowout Preventer Resolved with Government

A battle had been heating up between Transocean (NYSE:RIG) and other oil companies over the major piece of evidence in the Macondo oil well disaster.

The blowout preventer was the center of the dispute, where concerns over the proper care of it and the potential compromising of its condition were at issue.

For some reason the government said it wasn't going to flush seawater and other fluids out of the control pods. Transocean said if that wasn't done, corrosion could easily set in, causing problems which could lead to malfunction as a result.

To settle the issue, the government did a turnaround and said they'll flush the control pods on the blowout preventer to keep it from corroding before it's examined to see why it failed.

Judge Barbier consequently denied a motion by Transocean to compel the government to protect the device while it was the target of the investigation because of the problem being resolved.

BP (NYSE:BP), Transocean (NYSE:RIG), Cameron (NYSE:CAM) Want Judge to Require Claimants to Go Through Fund First

As pressure to begin lawsuits against companies involved with the Gulf of Mexico oil spill like BP (NYSE:BP), Transocean Ltd. (NYSE:RIG), Cameron International Corp. (NYSE:CAM) mounts, the companies are seeking to have Judge Carl Barbier, who is overseeing the cases, require almost all of them first go through the process of seeing if the qualify to be paid from the compensation fund set up by BP and administered by Kenneth Feinberg.

Even though it seems slow at this time receiving money from the funds, the idea is it would still be much quicker than using lawsuits, and it would probably pay more when considered the approximate 30 percent lawyers get for whatever judgements they win.

The only downside is if claimants don't qualify, which they will have then put off beginning legal proceedings for months.

Either way, the trials will take time, and it seems worth the attempt to see if they qualify for compensation funds, especially for those making claims who live near the Gulf coast, who are getting the priority treatment from the fund as far as who qualifies.

BP (NYSE:BP) Should Have Managed Transocean (NYSE:RIG), Halliburton (NYSE:HAL), and Weatherford (NYSE:WFT) Better Says Hayward

Among the numerous comments made before a hearing of British lawmakers, BP (NYSE:BP) outgoing CEO Tony Hayward said the company should have been more aggressive in managing contractors like Transocean (NYSE:RIG), Halliburton (NYSE:HAL), and Weatherford (NYSE:WFT).

According to FT, Hayward said, “What we have is a lack of rigour and a lack of oversight of contractors. The contractors here were world class and you might have thought they wouldn’t have needed that level of oversight, but it was clearly something that was found wanting.”

With few significant incidents in deepwater drilling over the last 20 years, Hayward added it left the industry unprepared to respond to a major accident like the one they experienced with the Deepwater Horizon, which had the added challenge at being at a depth of about 5,000 feet.

When asked about reported violations in the North Sea from the Financial Times, Hayward said the news outlet offered no revelation of any fundamental problems related to their operations there.

BP's (NYSE:BP) Outgoing CEO Tony Hayward Denies Cutting Safety Corners

Giving testimony before a British parliamentary committee, the outgoing CEO at BP (NYSE:BP) said concerning safety at UK North Sea operations that the company hasn't cut corners.

Being pressed by committee chair Tim Yeo, who reminded Hayward that he said three years ago that he was going to focus "laser-like on safety,"
and that "On your watch as chief executive, in that three years, now we've had the biggest ever oil spill in U.S. waters," Hayward responded, saying that the record of BP was "better than the industry average."

Hayward added that the oil industry will be better concerning safety as a result of the Gulf of Mexico oil spill, especially in regard to the testing of blowout preventers.

He said they will "significantly enhance the testing protocols of blowout preventers."

Concerning the calls by some for deepwater drilling to be banned, Hayward implied that was an over-response to the situation.

He added that there were failures on the part of all parties involved, including Halliburton (NYSE:HAL) and Transocean (NYSE:RIG), who owned the rig.

The British committee is gathering information in order to make a decision on whether or not to add any more regulations for drilling off the coasts of the UK.

Halliburton (NYSE:HAL), Transocean (NYSE:RIG), BP (NYSE:BP) Say Victims May Not Have Right To Sue

Saying alleged victims of the oil spill should go through the process of making claims through the BP (NYSE:BP) compensation fund, BP (NYSE:BP), Halliburton (NYSE:HAL) and Transocean (NYSE:RIG) say they may not have the right to sue until that happens.

Most of this is surrounding those claiming they incurred economic losses from the disaster.

It is hard to understand why anyone would hire a lawyer before going through the claims process first, as if they're denied, they can then hire a lawyer to file a lawsuit if they choose.

Lawyers are obviously talking them out of that so they can get their piece of the action.

Most will find out they're going to get less and take much longer if they go the lawsuit route.

The oil companies say they want a decision to be made concerning whether or not some of the individuals and businesses claiming economic losses must go through the claims process first.

With lawsuits reaching the discovery stage, they want that to be determined before handing over documents and electronic communication reports to the plaintiffs.

Those making claims against the BP compensation fund can find out within a 90-day period whether or not they've been accepted or denied.

FBR on Transocean (NYSE:RIG), BP (NYSE:BP) Indemnity Battle

With the stock of Transocean (NYSE:RIG) discounting $6 to $7 billion in relationship to potential liabilities in the BP oil spill, FBR Capital said it's probably going to be far lower than that.

FBR stated, "The primary conclusions from our recent series of meetings with legal experts in the Gulf Coast are that Transocean's legal liability is likely to be far lower than the $6 billion to $7 billion presently discounted in the stock, but that the issues are incredibly complex. Transocean seems to be protected both by the law and by its contract with BP from bearing substantial liability for the spill. Under OPA, Transocean is not a responsible party for pollution emanating from the well."

Even so, the contract between BP and Transocean may not protect them, as there have been court cases in the past where indemnification has been disallowed. If BP chose to, they could attempt to legally penetrate Transocean’s indemnity.

The question is whether the financial incentive is worthwhile taking the action.

FBR concluded: "However, we do not believe that BP has enough financial incentive to pursue Transocean for contribution claiming gross negligence as this could open BP up to an additional $16 billion in fines under the Clean Water Act (CWA). With Transocean having a book value of $21 billion and a market capitalization of $18 billion, it could hand over the keys to BP and it would not offset the financial risk to BP that it might be found to be grossly negligent under the CWA."

In other words, it's highly unlikely BP and Transocean will ever go to court over this.

Transocean (NYSE:RIG), Anadarko (NYSE:APC) Jump on FBR Capital Comments

Comments from analysts at FBR Capital concerning the liability of Transocean (NYSE:RIG) Anadarko Petroleum Corporation (NYSE:APC) in the BP (NYSE:BP) oil spill, caused the share prices of the companies to move up, with Transocean exploding upward.

In the case of Transocean, the big move seems to be related to the share price being discounted too much, with investors thinking they would be liable for up to $7 billion.

FBR believed they're more likely to come to a settlement with BP for somewhere from $1 billion to $2 billion at top, which grabbed the attention of investor who stampeded to the stock, which is already far above the 3-month trading volume average.

"...we believe it seems reasonable to assume that Transocean might settle with BP for between $1 billion and $2 billion," said FBR Capital analysts.

In the case of Anadarko Petroleum, which owns 25 percent of the Macondo oil well, FBR said they think they'll settle with BP from between $2 billion to $4 billion.

JP Morgan's (NYSE:JPM) Analysis of BP (NYSE:BP) Report

Several financial institutions responded positively to the BP (NYSE:BP) report, not necessarily to its content, but to its purpose, and JP Morgan (NYSE:JPM), along with others, believe BP made a solid move toward defining the narrative.

Morgan said, “In a stock market that has been critically short accurate information on a highly technical event, today’s report is another important step forward (along with capping the well on 15 July). We believe Chapter 1 of this event was trying to quantify the total gross liabilities. In our view, Chapter 2 is about understanding cause and apportioning responsibilities. We will then reach Chapter 3 – settlements.”

Chapter 2, as defined by JP Morgan, is where BP is at now, and if they're successful, they will have moved billions of dollars in responsibility from themselves and spread it to partners and contractors who were part of the operations leading to the failed oil rig.

The major hurdle is positioning themselves as strongly as they can to avoid being designated as being grossly negligent in the accident. The report was directly aiming at that, as well as the secondary issue of pointing the finger at others without seeming to accuse them of anything; they used the technical evidence and reports on other failures to do the job.

Halliburton (NYSE:HAL) and Transocean (NYSE:RIG) went on the offensive almost immediately, as they were specifically singled out as failing at their jobs in specific points leading to the explosion.

BP (NYSE:BP) Didn't Make Claims Decision, Feinberg Says

Rumors circulating that BP (NYSE:BP) was behind the decision to force those accepting final settlements from the compensation fund were cut down by fund administrator Kenneth Feinberg, who said he made that decision and not the oil giant.

This centers around those who agree to the decision by Feinberg and his team about getting paid a one-time payment for the entirety of what is owed them from BP.

If it is accepted, those receiving the claims money will have to waive the right to sue BP in the future.

Feinberg has yet to make a decision on whether or not to extend that to other companies like Halliburton (NYSE:HAL), Transocean (NYSE:RIG) and Cameron International (NYSE:CAM), who were also connected to the accident to one degree or another.

Those receive emergency funds for short-term periods will still be eligible to sue BP if they choose to.

BP (NYSE:BP) Shocker: Says Transocean (NYSE:RIG) Changed Lock on Blowout Preventer

BP (NYSE:BP) executive vice president Harry Thierens said in a hearing today that Deepwater Horizon owner Transocean (NYSE:RIG) changed a locking mechanism on the blowout preventer which caused up to 24 hourse of delay.

The blowout preventer is what is used to prevent oil from leaking from a well if something fails. It took a minimum of twelve hours, and up to a full day to figure out what changes Transocean had made to the device and to receive drawings of those changes.

Thierens testified he had been immersed in the efforts to shutdown the oil well after the April 20 explosion.

BP is now trying to secure the failed device at the well without damaging it so a determination as to why it failed can be made, along with who is liable for the failure.

Cameron International (NYSE:CAM) provided the blowout preventer for the oil rig.

BP (NYSE:BP) Gave Okay to Deepwater Horizon Use with 390 Overdue

When BP did an internal audit of the Deepwater Horizon oil rig, it found about 390 overdue maintenance problems, yet still decided to go ahead and let it begin operations, leading to the explosion and ultimate consequences associated with it.

The 390 overdue maintenance problems were revealed by BP’s Gulf of Mexico marine authority, Neil Cramond, when talking to investigators from the Bureau of Ocean Energy Management and U.S. Coast Guard.

BP’s audit said: "With excessive overdue maintenance and the recent introduction of more maintenance routines, it would appear that the
maintenance department is struggling to stay in touch with the planned maintenance schedule."

Even so, the final decision on whether or not to put the rig into
operation was BP's, as Cramond admitted and confirmed when queried by a lawyer from Transocean (NYSE:RIG) at the hearing.

Much of this is being done to determine, what, if any, liability
Transocean and others may have in relationship to the damage done from the explosion of the oil rig, which killed 11 workers and gushed oil into the Gulf of Mexico.

One of the most important pieces of evidence, the blowout preventer, is still on the Gulf floor, and is being worked on now to detach from the pipe in order to bring it to the surface as it was when it went down with the Deepwater Horizon.

At that time a lot more clarity will be added to the situation to make decisions on overall liability and how far it will extend beyond BP.