Oceaneering Wins Appomattox Development Contract From Shell

Oilfield services provider Oceaneering International, Inc. (NYSE:OII) was recently awarded a contract by a leading petroleum product company, Shell (LON:RDSa) Offshore, Inc., a subsidiary of Anglo Dutch oil giant Royal Dutch Shell PLC RDS.A.

Under the contact, the Houston-based contractor will provide services and products for the development of Shell’s Appomattox project. This is the second contract won by Oceaneering for this project. In 2015, the company secured a contract to supply umbilical for the Appomattox development. Appomattox is a deepwater oil and gas project in Gulf of Mexico. Shell owns a 79% stake in the deepwater fields and the remaining 21% interest is held by Nexen Petroleum Offshore, Inc., a wholly owned subsidiary of CNOOC Limited (NYSE:CEO) .

Per the contract, Oceaneering will support the design and installation of ancillary flowline hardware for the Appomattox development. The company will procure and set up pre-lay and post-lay crossing mattresses, flowline jumper fabrication and installation and manifold installation. The company also will design, procure, fabricate, and install subsea buoyancy for flowline thermal expansion.

Oceaneering is also expected to provide project management, engineering, subsea tooling and other required services to Shell. Further, Oceaneering has also planned to deploy its latest multi-service vessel – Ocean Evolution – for installation services. The company is likely to take delivery of the Ocean Evolution in late 2017. The work on the Appomattox project is expected to begin late this year and get completed in 2019.

Zacks Rank and Key Pick

Oceaneering is a global provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications.

The company has underperformed the Zacks categorized Oil and Gas Field Services industry over the last one year. During the aforesaid period, shares of Oceaneering declined almost 18% while the broader industry fell 0.18%.

However, the company has reported positive average surprise of 115.67% in the preceding four quarters.

Oceaneering currently carries a Zacks Rank #3 (Hold).

Flotek Industries, Inc. (NYSE:FTK) is one of the better-ranked stock within the same industry carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Flotek Industries is expected to post year-over-year growth of 181.08% on its earnings in 2018.

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