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Out of plain curiosity after being Barred from Drilling Ahead website for posting the truth on Tony’s BP share sell off, I made a check on the London Stock Exchange on BP’s directors share transactions. Amazingly, there seems to be a pattern of massive share sell-off by BP directors just before the two major incidences at the Macondo well, Mississippi Canyon Block 252, 41 miles (66 km) off the Louisiana coast. See the recompiled information in a spreadsheet incorporating the key dates.
The Transocean Marianas commenced drilling on the Macondo Well location on 7 Oct 2009. Three weeks later on 28 Oct 2009, Tony Hayward sold 220,000 shares at 587.5p. Ten (10) days later, on 9th Nov 2009, the Transocean Marianas had to abandon the well due to damage by Hurricane Ida. It seems strange that Tony Hayward & Iain C Conn would want to buy 56 shares each at 595.2p on 10 Nov 2009, a day after the rig pulled out. Seven (7) days later, Byron E Grote sold 150,000 shares at 9.92 USD.
On 15 Feb 2010, the Deepwater Horizon reentered the abandoned Macondo Well and commenced drilling. The well was targeted for completion on 8 March 2010. There had been reports of numerous problems on the rig including an accident which damaged the gasket on the blowout preventer. On 17 March 2010, Tony Hayward sold 223,288 shares at 623.2p. Byron E Grote followed suit on 18th March 2010 by selling 58,536 shares at 9.74 USD and 17,064 shares at 9.73 USD (making a total of 57,600 shares). Andy Inglis followed 6 days later on 23 March 2010, selling a total of 219,500 shares at 630.6 in two transactions. The sell-out trend from 17 to 30th March 2010 was broken by George David who bought 112,890 shares at 568.9p at an intra-low price on 29 March. David Jackson managed to buy 13,073 shares at also the same price of 568.9p on 30 March, the same day Iain C Conn sold 13,073 shares at 625.36p.
Since his massive sell-off on 17 March, Tony Hayward had bought back BP’s shares 4 times: 50, 55, 83 and 85 shares at prices of 641.1, 553.9, 391.55 and 364.8p respectively. Strangely, from 12 April till 12 July no directors sold their shares but they bought back token shares (50 to 85 shares). Only Carl-Henric Svanberg buck the trend by buying 175,000 shares at 618.96p on 28 April, 8 days after the blowout incident.
It is very clear Car-Henric Svanberg and George David are both caught in the wrong trend while Tony Hayward, Iain C Conn, Byron R Grote and Andy Inglis were the directors right on the money.
Ida was a late season hurricane that had a large impact on the east coast of Nicaragua and the adjacent islands. It was the first November hurricane in the Gulf of Mexico since Kate of 1985. Ida's genesis was associated with a poorly defined tropical wave that reached the western Caribbean Sea on 1 November. It was the strongest landfalling tropical cyclone during the 2009 Atlantic hurricane season with winds of 85 mph (140 km/h).
With the Transocean Marianas having problems 3 weeks into the drilling and the brewing hurricane, Tony Hayward apparently made the right choice of selling off his shares (220,000) before the impending hurricane. He was right when the well had to be abandoned 10 days later. No other directors followed him in the sell-off.
Tony’s sell-off on 17th March 2010 (2283,228 shares) was made after the well had numerous problems and missed its targeted completion date of 8 March 2010. This time 3 other directors (Conn, Grote & Inglis) followed suit. A total of 531,461 shares were disposed by the 4 directors in the period 17 – 30 March 2010. From 12 April till 12 July 2010, Tony Hayward and Iain Conn were seen to be buying miniscule shares (total 491 shares) in an apparent bid to throw off the sense; 50 shares each at 641.1p (losing 18p) on 12th April.
After the Deepwater Horizon missed its targeted 8th March completion date, it seems that at least some directors knew of something that might cause the share prices to fall. Four directors selling off 531,461 shares within 2 weeks is no coincidence.
The moral question is, did they allow “the speeding train to continue on its collision course” as pointed out in “The root causes of BP's oil spill & the imminent threat of more oil-related disasters. Part 1”, so that they could personally profit from a “limited disaster”. Obviously, they did not expect the disaster to spread that far and wide.
