FMC Tech Wins Subsea Contract - Analyst Blog
06 February 2013 - 2:20AM
Zacks
Oil drilling equipment maker
FMC Technologies Inc. (FTI) entered into a deal
with energy major BP Plc (BP) for the manufacture
and supply of subsea equipment.
Per the deal, FMC Technologies will supply 2 manifolds and related
control equipment to support water injection in the Thunder Horse
field. The field is located in water depths of approximately 6,300
feet in the Gulf of Mexico Mississippi Canyon area. FMC
Technologies’ scope of supply also includes numerous pipeline end
terminations, flowline and well jumper kits, and umbilical
termination assemblies. The subsea equipment is slated to be
delivered in first half of 2013.
Earlier in January, FMC Technologies won contracts from LLOG
Exploration Company, LLC and CNR International – a wholly owned
subsidiary of independent oil and gas explorer Canadian
Natural Resources Ltd. (CNQ) – for the supply of subsea
equipment.
FMC Technologies shares currently retain a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one to three months. The company is
expected to release its fourth quarter earnings on Feb 12, before
the opening bell.
As is the case with other oil services and equipment suppliers, the
results for FMC Technologies are directly exposed to oil and gas
prices, which are inherently volatile and subject to complex market
forces. A potential drop in prices could curtail deepwater drilling
and subsea equipment demand, thereby affecting the company’s
revenues, earnings and cash flow.
Additionally, FMC Technologies operates manufacturing facilities in
15 countries outside the U.S., and approximately three-fourths of
its sales are generated internationally. The company’s operating
areas include economically and politically volatile regions such as
North Africa, West Africa, the Middle East, Latin America and the
Asia Pacific. Instability and unforeseen changes in these markets
may have an adverse impact on FMC Technologies’ operations and
earnings.
However, oilfield equipment maker McDermott
International (MDR), with a Zacks Rank #2 (Buy), is
expected to perform well in the coming one to three months.
BP PLC (BP): Free Stock Analysis Report
CDN NTRL RSRCS (CNQ): Free Stock Analysis Report
FMC TECH INC (FTI): Free Stock Analysis Report
MCDERMOTT INTL (MDR): Free Stock Analysis Report
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