Rowan's Ralph Coffman Rig Gets Award To Operate In Guyana

Rowan Companies plc (NYSE:RDC) recently received a contract from CGX Resources for the Ralph Coffman rig. The 240-C Class jack-up, with the capacity to perform in harsh environments, will operate one well for roughly 60 days in Guyana.

Currently, the jack-up is hired in the Gulf of Mexico by oil and natural gas explorer GulfSlope Energy. Rowan expects Ralph Coffman to start activities under the new contract in second-quarter 2019.

December seems to be a good time for Rowan as early this month, Exxon Mobil Corporation (NYSE:XOM) showed interest to use another drillship — Rowan Relentless — of the offshore contract driller for an extended period. The largest publicly traded energy player exercised options so that it will be utilizing the R-Class ultra-deepwater drillship of Rowan in the U.S. Gulf of Mexico for 60 more days.

Apart from the awards, Rowan already has a healthy contract backlog. Notably, the company’s recent merger agreement with Ensco plc (NYSE:ESV) will strengthen the backlog position which has been estimated by the companies at roughly $2.7 billion. Overall, Rowan is well placed to boost cashflows, given its contract awards and revenue backlog.

Despite the positives, Rowan has lost 36.9% in the past year against the 33.7% decline of the stocks belonging to the industry.

Currently, Rowan carries a Zacks Rank #3 (Hold). A better-ranked player in the oil and gas drilling space is Noble Corporation (NYSE:NE) , with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Noble beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 4.1%.

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