Halliburton Company (NYSE: HAL) accepts tinkering with evidence in the Gulf of Mexico fiasco

Denver, CO, 07/29/2013 (Avauncer.com) – Shares of  Halliburton Company (NYSE: HAL) rose 3.70% to close at $45.98 in its last trading session. This was however close to the higher end of its 52-week price range of $29.83 to $46.66. Shares remained heavily traded with 23.51 million shares exchanging hands, as against an average volume of 8.69 million shares.

This was despite the recent news in which the controversial oil player admitted of destroying evidence in the massive destruction that took place in 2010 in Gulf of Mexico. This has brought an end to three years if probation, with a fine of $200,000. This also includes a voluntary contribution of $55 million of voluntary contribution to the National Fish and Wildlife Foundation. This is the maximum allowable fine which was purported to be slapped on the company. However, this is not the end to litigations, where a federal judge is still looking for further payments for damages to businesses and residents. The company, apart from the financial crunch the fine will put, has also announced of buying back an additional $3.3 billion worth of stock, which is up to 8% of its outstanding shares.

The company seems to dominate investor’s preferences, despite such news of fine, because of the fact that new reserves of oil and gas are situated in places which are difficult to access, which makes services of Halliburton and its likes more rare and valuable.

What is to be factored is the need and urgency of the company to make such a buy back in such turbulent times. Moody’s Investors Service has cut its outlook on the company’s debt down from stable to negative. This is because of the fact that its magnanimous buy back will be funded by debt. This leverage may improve its EPS, only at the cost of its capital structure, which shall be seen uncertain in tough times.

rose 3.70% to close at $45.98 in its last trading session. This was however close to the higher end of its 52-week price range of $29.83 to $46.66. Shares remained heavily traded with 23.51 million shares exchanging hands, as against an average volume of 8.69 million shares.

This was despite the recent news in which the controversial oil player admitted of destroying evidence in the massive destruction that took place in 2010 in Gulf of Mexico. This has brought an end to three years if probation, with a fine of $200,000. This also includes a voluntary contribution of $55 million of voluntary contribution to the National Fish and Wildlife Foundation. This is the maximum allowable fine which was purported to be slapped on the company. However, this is not the end to litigations, where a federal judge is still looking for further payments for damages to businesses and residents. The company, apart from the financial crunch the fine will put, has also announced of buying back an additional $3.3 billion worth of stock, which is up to 8% of its outstanding shares.

The company seems to dominate investor’s preferences, despite such news of fine, because of the fact that new reserves of oil and gas are situated in places which are difficult to access, which makes services of Halliburton and its likes more rare and valuable.

What is to be factored is the need and urgency of the company to make such a buy back in such turbulent times. Moody’s Investors Service has cut its outlook on the company’s debt down from stable to negative. This is because of the fact that its magnanimous buy back will be funded by debt. This leverage may improve its EPS, only at the cost of its capital structure, which shall be seen uncertain in tough times.