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BP's (NYSE: BP ) woeful failure to stem the flow of hydrocarbons into the Gulf of Mexico has now truly begun to cascade into plummeting stock prices for other Gulf-heavy producers like Anadarko Petroleum (NYSE: APC ) .
Although Anadarko's 25% stake in the offending BP-operated well may account for a portion of Tuesday's 16% intraday free fall from the preholiday close -- which punctuates a 40% overall share-price decline since the tragedy began -- some of this weakness undoubtedly peers forward into the abyss of the vast unknown.
The entire oil industry has been forced to confront its undeniable and collective lack of preparedness for addressing a major deepwater catastrophe, and reasonable folks around the world find themselves wondering just what the heck we've been thinking by allowing deepwater production to flourish as it has without the necessary capabilities in place.
When a company resorts to seemingly silly measures like deploying golf balls and old tires to plug a gushing geyser of subsea oil and gas, it highlights an apparent ocean of disconnect between modern society's unwavering thirst for oil and our capacity to safeguard entire ecosystems from the risk of catastrophic spills.
Just as the Exxon Valdez disaster precipitated the Oil Pollution Act of 1990 (OPA), the present disaster will undoubtedly yield a regulatory response that will alter the operating landscape for the deepwater drilling industry in fundamental ways. Already this week, we've seen President Obama's six-month moratorium on Gulf of Mexico deepwater permits lead explorer Cobalt International Energy (NYSE: CIE ) to declare force majeure on a rig leased from Diamond Offshore (NYSE: DO ) .
Reflecting these sweeping implications for the deepwater segment at large, and the considerable uncertainty created thereby, the cost of insuring against a default on debt by even an energy services behemoth like Halliburton (NYSE: HAL ) rose sharply on Tuesday. Halliburton shares cratered by more than 11% in response.
At a time when the entire world is grappling with the appropriate questions that are triggered by an environmental disaster of this magnitude, tracking the investment implications can leave a strange taste in the mouth. Nonetheless, real people have real money tied up in these stocks and must continue to make informed decisions.
I believe that plenty of companies are receiving deserved revaluations to account for the calamity, even dry bulk operator DryShips (Nasdaq: DRYS ) -- which is on the hook for four deepwater drill ships presently under construction -- is vulnerable under the circumstances.
On the other side of the spectrum, I believe the market could potentially be exacting a disproportionate toll upon shares of Anadarko Petroleum. As the leading independent producer in the Gulf of Mexico, this company is certainly exposed, but Anadarko also boasts an impressive onshore natural gas asset portfolio with enviable positions in coveted shale plays like the Marcellus and the Haynesville. As I mentioned some time ago, China has tapped Anadarko and Devon Energy (NYSE: DVN ) as strategic development partners in Chinese offshore assets, which provides further protection from an extended moratorium on deepwater drilling in the Gulf.
As we struggle to adapt to this tragedy, both as investors and as human beings, I encourage Fools to communicate with one another to share their diverse and valuable perspectives. Your fellow readers look forward to hearing your thoughts in the comments section below.