McDermott Wins Malaysian Deal - Analyst Blog
17 Mai 2012 - 12:15PM
Zacks
Recently, energy-focused
engineering and construction firm McDermott International,
Inc. (MDR) received a major subsea contract from Murphy
Sabah Oil Co., Ltd. Although none of the companies disclosed the
financial terms of the deal, McDermott has included the contract’s
value in its first quarter 2012 backlog.
Per the deal, McDermott will
provide engineering, procurement, construction, transportation,
installation and commissioning services to be utilized for the
subsea infrastructure of the Siakap North - Petai ("SNP")
Development Project in Malaysia. McDermott will execute the deal
through its Malaysian arm – Berlian McDermott Sdn. Bhd
The scope of the contract includes
works of rigid flowlines, flexible risers, an umbilical and subsea
hardware and controls. McDermott will also set up five water
injection and eight production wells that will be drilled from the
manifolds at each of the four drill centre units.
Located in proximity to the Kikeh
field, northwest of Labuan Island the SNP field is at a water depth
of 3,900 - 4,900 feet and is operated by Murphy Sabah Oil Co. Ltd.
The SNP field comprises two rigid, insulated, pipe-in-pipe
production flowlines as well as one rigid water injection flowline.
There is also one main umbilical system that connects eight new
manifolds and subsea distribution units to existing riser slots on
the Kikeh Floating Production, Storage and Offloading(FPSO)
facility.
Extensive engineering and
procurement works for the project are on track. Other works
including fabrication of PLETs, jumpers and other installation aids
is slated to start in the third quarter of 2012.
McDermott management stated that
in-depth knowledge about subsea engineering and construction
vessels along with track record of fabrication activity at the
Batam Island facility aided the contract win.
McDermott currently retains a Zacks
#3 Rank, which translates into short-term Hold rating. We are also
maintaining a long-term Neutral recommendation on the stock.
We think McDermott’s improving
award activity, geographic footprint in high-growth regions, and
continued strong project execution provide solid visibility into
its earnings for 2012 and 2013.
However, the transfer of the ‘Power
Generation Systems’ and ‘Government Operations’ segments into a
separate, independent and publicly traded entity The
Babcock & Wilcox Company (BWC) has left McDermott with
a less diversified business, thereby heightening its risk
profile.
BABCOCK&WILCOX (BWC): Free Stock Analysis Report
MCDERMOTT INTL (MDR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
McDermott (NYSE:MDR)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
McDermott (NYSE:MDR)
Historical Stock Chart
Von Jul 2023 bis Jul 2024