Louisiana (Reuters) - BP Plc stock hit a 14-year low on Friday and its credit weakened sharply on talk it needs extra cash to fund the clean-up and compensation bill for the worst oil spill in U.S. history.
Total share losses for the embattled oil major since the ecological disaster began on April 20 stand at around $100 billion, more than halving its pre-spill market value, and analysts at Nomura said it needed to assure the market of its liquidity.
"A heavy inversion of both credit yield and equity volatility suggests the market is concerned about a near-term credit event around BP," they said in a note.
"With debt expensive and asset sales taking time, we consider that equity-linked financing -- perhaps backed by Sovereign Wealth -- could prove the attractive short-term solution," they added.
A spokesman for BP -- whose chief executive, Tony Hayward, is currently on a UK investor roadshow -- said it had "considerable firepower" to meet the costs and denied market talk that the company was seeking bankruptcy protection.
BP's London shares, which earlier hit a low of 296 pence a share, pared losses slightly but were still down 5.2 percent at 308.3 pence by 1154 GMT (7:54 a.m. ET), while five-year credit default swaps were 40 basis points wider at 575, according to Markit. The 2015 3.875-percent U.S. dollar bond widened 16.9 basis points to 529, according to Tradeweb.
The firm's American Depositary Receipts were down 4 percent ahead of the U.S. open a day after stock exchange data showed the short interest in BP rose 290 percent in early June.
To date, clean-up and compensation costs for the ecological disaster, which has devastated the region, hit President Barack Obama's poll ratings and led to a contested ban on deepwater drilling, were $2.35 billion, BP said.
As concern grows that bad weather could hamper clean-up operations, it said a relief well had successfully detected the MC252 well and would continue to a target intercept depth of 18,000 feet, when "kill" operations would begin.
BP said 37,000 people, 4,500 vessels and 100 aircraft were currently helping the response effort.
