Exxon Mobil is Not BP - Trade on Weakness
Thanks to BP (NYSE:BP) just about every oil/gasoline/offshore drilling company has been hit and the jewel of the bunch Exxon Mobil (NYSE:XOM) has watched its shares drop $9 or around 12% since the oil spill madness started. Could this be a gift from Wall Street and should investors be eyeing XOM shares?
EXXON IS NOT BP
Exxon Mobil (XOM) volunteered to pay Alaskans, as well as businesses $300 million right away after their oil spill. Courts ended up ordering Exxon Mobil to pay an additional $25 million to some groups that had been overlooked. The total amount that the U.S. Supreme court ordered Exxon Mobil to pay was $507 million, plus interest in the amount of $470 million in 2009. Keep in mind it took 20 years for Exxon's litigations to end, BP is just getting started and their costs have yet to be determined but its likely to be in the billions.
BP has already paid out 18,000 of the 36,000 claims that have been filed against them, totaling close to $48 million. BP is focusing on the claims whose livelihoods have been effected. As well as the families of the 11 victims who died and the additional 17 people who were injured.
Exxon Mobil has been through this mess before and BP may not survive as a company, but guess who will? Exxon Mobil. This week Exxon Mobil announced that Fitch Ratings has affirmed the company a Default Rating (IDR) at AAA; Senior unsecured debt at AAA; Commercial paper at F1+; Short term IDR at F1+; The Rating Outlook is Stable.
Feel like buying yet?
CHARTS FOR XOM:
Disclaimer: No positions in any of the securities mentioned in this publication.