The Impact of the Deepwater Horizon Oil Spill on U.S. Drilling Companies

The purpose of this thesis is to examine the impact of the accident on the Deepwater Horizon rig in the Gulf of Mexico on the stock prices of the U.S. drilling companies. We formed a sample consisting of 11 exposed and 23 non-exposed U.S. drilling companies. By investigating the event and reviewing the existing literature we constructed a framework based on which we analyzed the stock prices of the companies in our sample. Our findings indicate that the event had a significant negative effect on the share price of the exposed companies of our sample for the long-term event period and we were able to confirm the findings of previous studies, indicating that the investors’ reaction was delayed. Finally, our results specify that the magnitude of the effect of the event on the stock prices was impacted by the level of exposure to the accident for each company.