Positive Speculation Boosts BP Shares

Shares of BP plc (NYSE: BP) are jumping in overseas and early U.S. trading on takeover speculation and speculation that the relief wells could be completed much sooner than expected.

A research note yesterday from JPMorgan sparked the renewed takeover speculation. The firm discussed the possibility of ExxonMobil (NYSE: XOM) or Royal Dutch Shell (NYSE: RDS) bidding for BP, which has lost more than half of its market value since the oil spill. The JPMorgan analyst argues that any deal would likely have to be made through a cash and share offer.

Shares of BP are up 5.6 percent to $29.29 in pre-open U.S. trading after gaining 2.3 percent in U.S. trading yesterday. The stock rose over 9 percent in London trading today.

In addition to the takeover speculation, there is speculation that BP's two relief wells, which is considered by most as the company's best chance to stop the gushing well, could be completed much sooner than was expected.

A mid-August date has been discussed as the time the relief wells will be complete, but some are much more optimistic. Pritchard Capital analyst said in a note to investors Tuesday the relief well could reach its target in eight to 10 days. Darryl Bourgoyne of Louisiana State University said two-weeks might be "reasonable," according to reports from the Houston Chronicle.

Newly named Hurricane Alex has not impacted drilling of the relief wells, and the company said in a technical briefing Monday that drilling was 900 feet away from its intended target.

While BP's total liability from the spill is still unknowable, stopping the gushing well would make this number easier to estimate for investors and potential suitors.

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