McDermott Wins Angelin Field Development Contract From BP

Engineering and fabrication giant McDermott International Inc. (NYSE:MDR) was recently awarded an engineering, procurement, construction, installation and commissioning (EPCIC) contract by energy giant BP (LON:BP) p.l.c.’s (NYSE:BP) associate company BP Trinidad & Tobago for the development of Angelin gas field development, off Trinidad and Tobago.

A week ago, BP sanctioned the development of Angelin gas field and the drilling is expected to begin in the third quarter of 2018. The production is likely to begin from first-quarter 2019.

Per the contract, McDermott will design, procure, fabricate, transport, install, and commission a six-slot wellhead platform and 26 inch subsea pipeline. The platform and pipeline are scheduled to be installed by McDermott’s DLV 2000 vessel. BP has estimated the development costs of the project to be approximately $500 million.

The contract will help BP to strengthen its relationship with the energy services giant after the successful completion of the multi-phase engineering contract. The phases include pre-front end engineering design, front-end engineering design and pre-execution engineering for the initial design and execution planning of the Angelin gas field.

The contract award will be reflected in McDermott’s second-quarter 2017 backlog. The company currently has backlog of $3.9 billion, reflecting steady demand from customers and long-term earnings and cash flow visibility in the challenging crude environment.

Zacks Rank & Key Picks

Headquartered in Houston, McDermott is a leading global engineering and construction firm that has a diversified product portfolio, specialty manufacturing and service capabilities, and proprietary technological expertise.

Unlike other engineering and construction companies, McDermott is well-entrenched in major offshore energy projects and is one of the few global contractors that can provide a complete array of services – from design to construction.

The company, under the Zacks categorized Oil & Gas Mechanical and Equipment industry, currently carries a Zacks Rank #2 (Strong Buy).

McDermott International, Inc. Price

Some top-ranked stocks in the broader energy space include Canadian Natural Resources Limited (TO:CNQ) and Braskem S.A. (NYSE:BAK) . Both the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural Resources is expected to witness 47.41% year-over-year growth and 702.38% in its revenues and earnings respectively in 2017.

Braskem reported positive average earnings surprise of 107.79% in the preceding four quarters.

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