NEW YORK (TheStreet -- Stocks of offshore oil-driller stocks raced ahead in March when President Obama announced the end to a decades-old moratorium on new offshore drilling. Facing intensified political pressure about its decision to open up offshore oil and gas assets to new drilling, President Obama's administration said on Friday morning that no new offshore drilling will be allowed until the exact causes of the current oil spill are identified.
On Friday, the offshore oil driller stocks are retreating as surely as the oil spill in the Gulf of Mexico is advancing in the sensitive coastline areas in Louisiana, Mississippi and Alabama.
Transocean was down more than 7%, bringing its two-day share price loss between Thursday and Friday to 15%. The oil spill crisis worsened on Thursday and Friday as the original BP estimate for the rate of oil leaking out of the underwater well was quintupled by a government estimate, and the oil spill reached land on Thursday evening.For the week through midday Friday, Transocean shares had lost more than $14, to a share price near $74 -- a price that Transocean shares had not been as low as since the summer 2009. Transocean shares have lost about 20% of their value this week. Worse still, stormy weather on Friday was making it difficult for oil-spill containment efforts from BP and the U.S. Coast Guard -- including controlled burns and the use of booms to contain the spread of the oil spill and keep it from reaching land -- to be effective. The White House's latest words on offshore drilling sent all the offshore drillers into a Friday selloff, even as BP's share price stabilized on Friday, trading marginally positive at midday. For the week through midday Friday, BP shares had still lost approximately $7, to a midday Friday share price under $53, or a weekly loss of approximately 13% of market cap. Presidential advisor David Axelrod appeared on morning television to reassure Americans that just because President Obama lifted the moratorium on offshore drilling, it doesn't mean the government will be moving ahead and allowing offshore drilling without a full and satisfactory accounting of what went wrong with the BP and Transocean oil rig disaster. Hercules Offshore (HERO), the most leveraged of the offshore stocks, was down 7% on Friday at midday. The loss wasn't just about the oil spill in the Gulf of Mexico being in the national spotlight, though. Hercules also announced a first quarter loss on Thursday.
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