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It’s getting ugly for BP (NYSE:BP). The company’s latest attempt to plug the well that’s gushing oil into the Gulf of Mexico has failed. And the "back-up plan" – a relief well drilled to relieve the pressure from the leaking well – will take two months to complete. That’s two more months of oil gushing unfettered in to the Gulf waters, two more months of damage to Gulf Coast businesses, two more months of damage to BP’s reputation and share price.
BP has already spent nearly $1 billion trying to contain the oil leak and accounting for environmental damage. Analysts now expect that by the end of 2010 BP will spend $6 billion in expenses related to the spill. And several billion more will certainly have to be spent in 2011 to compensate Gulf Coast residents.
It’s likely that BP will also be heavily fined. And the future of drilling for oil in the Gulf of Mexico is now threatened. Moratoriums are already in place.
At some point, lost production from the Gulf of Mexico will push oil prices higher. And land-based oil production companies will benefit. Not only will these companies make more money with higher oil prices, it’s likely that they will enjoy higher valuations as oil investors flock to companies that have less perceived political risk.
"I’ve been recommending top-quality, land-based oil stocks to my readers," said energy investment guru Ian Wyatt. "I expect these stocks to make strong moves higher as investors realize they are the safest oil plays to make."
Wyatt just released a Special Report on 3 companies producing oil in North Dakota’s Bakken oil pool. With 5 billion barrels of verified reserves, and potentially much more, the Bakken is the biggest oil play in the continental Untied States.
Click here to access this report and discover how to buy into Bakken for less than $4 a share.