LONDON - Shares in BP PLC have hit their highest level in over a year in the wake of the oil company's announcement that it had reached a settlement with victims of the massive Gulf of Mexico oil spill.

BP shares were up 1.6 percent at 504.4 pence in midday trading in London Monday. The company's share price had earlier struck a high of 512 pence, its highest level since January 2011.

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BP said Friday it expects to pay out at least $7.8 billion as part of the settlement. It expects the money to come from the $20 billion compensation fund that it has set up.

Jonathan Jackson, head of equities at Killik & Co. in London, says the news isn't the end of BP's problems but that "it does provide increased visibility over its potential liability and significant progress toward resolving the issues."