Oil drilling equipment maker
Cameron International Corp.
) has entered into a subsea supply deal with Chinese oil producer
Per the terms of the agreement, which is valued at approximately
$100 million, Cameron will deliver subsea production systems to
CNOOC. These systems will be utilized for the development of the
offshore "Panyu 35-1/2" gas field in the South China Sea.
The contract, which will likely be executed in 2013, involves
the supply of six subsea production trees, production controls, one
manifold, associated subsea equipment, rental tooling and service
support. Cameron's new CAMSERV™ Aftermarket facility in Shekou,
China will lend support to the deal.
This is Cameron's second venture in the China waters, after the
Liwan 3-1 project. Cameron management is hopeful that this deal
will strengthen its footing in the Chinese oil market and will look
forward to further investment opportunities.
Houston, Texas-based Cameron is a leading manufacturer of
pressure control equipment used in onshore, offshore, and subsea
applications for oil and gas drilling, production, and
transmission. The company operates through three segments:
Drilling & Production Systems; Valves & Measurement; and
Process & Compression Systems.
Cameron currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. Longer-term, we maintain our Neutral
recommendation on the stock.
We believe that Cameron has a diversified product portfolio,
specialty service capabilities and proprietary technological
expertise. The company also enjoys a dominant market position and
its strong backlog of $6.7 billion offers ample visibility to its
earnings growth and cash flow prospects.
Cameron is also well poised to benefit from the improving subsea
activity levels through 2012 and beyond. In this regard, the
company has signed numerous subsea equipment deals with industry
Petroleo Brasileiro S.A.
However, shares of the company are fairly valued at current
levels, considering the sensitivity of Cameron's business to
gas/oil price volatility, as well as exploration and production
spending patterns, costs, geo-political risks, competition and the
advent of new technologies.
BP PLC (BP): Free Stock Analysis Report
CAMERON INTL (CAM): Free Stock Analysis Report
CNOOC LTD ADR (CEO): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
PETROBRAS-ADR C (PBR): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
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