Halliburton Settles Majority Of Gulf Spill Claims For $1.1 Billion

(RTTNews) - Oilfield services provider Halliburton Co. (HAL) reached Tuesday a $1.1 billion settlement to resolve a major chunk of the plaintiffs' class claims against the company related to the April 2010 Macondo oil well spill accident in the Gulf of Mexico that was the worst offshore oil spill in U.S. history.

The settlement includes legal fees and is subject to approval by the U.S. District Court for the Eastern District of Louisiana.

The company noted that the settlement amount will be payable into a trust in three installments over the next two years until all appeals have been resolved. The company has already provided for $1.3 billion as accrued loss contingency provision relating to the multi-district litigation proceedings.

The settlement is related to the 2010 Deepwater Horizon accident in the Gulf of Mexico that claimed 11 lives and led to the worst offshore oil spill in U.S. history.

Halliburton, the contractor for the rig, was charged by plaintiffs of doing faulty cementing work on the Macondo well just before the accident happened. Meanwhile, Halliburton has accused Macondo well owner oil giant BP plc (BP.L, BP_UN.TO, BP) of faulty decisions. The rig is owned by Transocean Ltd. (RIG).

The Deepwater Horizon rig that was drilling the Macondo well sank two days after the April 20, 2010 explosion and led to an oil spill of about 200 million gallons that impacted beaches and the fishing sector. The well was finally capped on July 15 that year.

The settlement agreement includes claims against Halliburton that BP assigned to the settlement class in BP's April 2012 settlement, and punitive damages claims against Halliburton by a class of plaintiffs who allege damages to property or associated with the commercial fishing industry arising from the Deepwater Horizon Incident.

Meanwhile, it also includes an affirmation that Halliburton has no liability for compensatory damages to the members of the settlement class in the BP April 2012 settlement.

The company added that the settlement is subject to an agreed-upon level of participation by the current claimants which, if not achieved, allows Halliburton to terminate the agreement.

Earlier, BP has settled claims of more than $28 billion and expects tens of billions of further claims settlements. Meanwhile, Transocean made claim settlements of about $1.4 billion in 2013.

In Tuesday's regular trading session. HAL is currently trading at $66.54, down $1.07 or 1.58% on a volume of 2.65 million shares.