Thursday, February 03, 2005

oh, and about those "frivolous asbestos lawsuits"?

Asbestos Claims Make Halliburton Hazardous

A recent trio of asbestos-related verdicts may be enough to push Halliburton into a financial black hole. And, while few other oil service companies have Halliburton's potential level of exposure, the fear of costly litigation could be enough to push investors away from the sector.

Last Wednesday, a Baltimore jury verdict saddled Halliburton with $30 million in additional asbestos liability. While that alone may not seem terribly significant, as $30 million is pocket change for the company, the continued jury verdicts against the company are a real threat. Including the Baltimore case, Halliburton subsidiaries have lost three verdicts in three months, with liability pushing $125 million.

"Thirty million dollars, in the scope of things, is nothing," says Dan Pickering, director of energy research at Simmons & Co., a Houston energy investment firm, and a member of the TSC Energy Roundtable. "It's the data point and what it means that people are reacting to."

Halliburton shares lost 43% of their value Friday to close at $12, as news of the Baltimore verdict made the rounds.


Some still argue that Halliburton's core oil service business continues to lead the industry. While that may be true, it now seems irrelevant.

"This shackles Halliburton and its solid core business," says Pickering. "Right now, the direction of the business doesn't matter. The market has put a tight collar around the company's neck."


ooops, can't have halliburton discomfited, now, can we? better make sure there's legislation in place wot will keep their stock up. ayup.

(skippy's got a bit on this, too!)

thanks for the heads up from andy!

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