By Donna Kardos Yesalavich Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- BP PLC's (BP, BP.LN) shares were boosted Monday after the embattled oil giant said it would begin the "static kill" procedure in its latest attempt to cap a damaged deep-water well in the U.S. Gulf of Mexico. BP's U.S. shares were recently up 2% at $39.23, putting the stock nearly 47% above the 14-year low to which it sank in late June. The stock has now recovered some 37% of its decline from the April 20 explosion of Transocean Ltd.'s (RIG, RIGN.VX) Deepwater Horizon drilling rig to the June low. In London, BP's shares closed 1.8% higher. Monday's activity in other markets also reflected improved sentiment toward BP. In the options market, there was higher volume in calls, which reflect the right to buy shares, than in puts, which convey the right to sell shares. Meanwhile, the annual cost of buying protection against default on $10 million in BP debt over a five-year period fell to $317,000, from $326,000 on Friday, according to Markit. The gains coincided with a rally across the rest of the energy sector as the price of crude oil climbed above $81 a barrel. Some of the top energy gainers Monday included oil-and-gas companies, including Denbury Resources Inc. (DNR), up 5.5% to $16.71, EOG Resources Inc. (EOG), up 4.4% to $101.78, and Pioneer Natural Resources Co. (PXD), up 4.5% to $60.55. BP said that, during the first phase, engineers will test whether they can push crude oil down the well and into the reservoir by injecting base oil at low rates. If that test succeeds, the oil company could begin injecting heavy drilling mud into the reservoir Tuesday. The flooding--which requires 2,000 barrels of drilling mud--could take all of Tuesday and go into Wednesday, after which the well will effectively be considered "killed." Success could significantly boost BP shares. BP's stock has been on a tear in recent weeks as speculation rose that BP would change its chief executive and sell some assets, while investors also grew hopeful that the company was nearing the killing of the well. The market got what it wanted regarding the CEO and the asset sales last week, when the company announced that CEO Tony Hayward will step down Oct. 1, to be succeeded by Robert Dudley, and said it plans to sell about $30 billion in assets. If BP can kill the well this week, it would complete the trifecta, marking a big turning point for the oil giant as it works to recover from the spill. -By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com (Angel Gonzalez contributed to this article.)
