American depositary receipts of Petrobras rose 1.3% in early-afternoon trading on high volume.
Petrobras said it will pay Brazil $42.5 billion in new stock in exchange for being allowed to develop 5 billion barrels of oil in offshore fields below the Atlantic Ocean, off the coast of Rio de Janeiro.
S&P Equity Research upgraded the firm's U.S.-listed shares to buy from hold. It said even though Petrobras' stock-for-oil deal came in at the high end of expectations and is likely to add near-term pressure to its stock, the deal is still viewed in a positive light because of its strong long-term growth potential.Petrobras' offering is one of the largest stock offerings this year, and is part of its overall plan to invest $224 billion by 2014. The deal is expected to close Sept. 30. Petrobras investors such as billionaire George Soros, BlackRock (BLK) and Banco BTG Pactual have been part of a recent sell off in Petrobras shares, Bloomberg News reported. Elsewhere in the energy sector, shares of Mariner Energy were among the most widely-traded shares on Thursday after a fire broke out on an offshore platform it owns in the Gulf of Mexico, a region still reeling from the aftereffects of the catastrophic BP (BP) oil spill. Early reports of the explosion seemed to be either mistaken or exaggerated. Workers were sandblasting the platform when the fire occurred, and production had been halted.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV