Energy-focused engineering and construction firm
McDermott International Inc.
) announced that two of its subsidiaries have won contracts for two
different offshore projects across the globe. The company will
include both the contracts' value in its second quarter 2012
The first contract was awarded by Heerema Marine Contractors
Nederland BV for a fabrication work to be used in a deepwater
platform that is located 225 miles south of New Orleans in the Gulf
of Mexico. The work, which is slated to begin during the second
quarter of 2012, involves the construction of 16 tendon buoyancy
modules (TBMs). McDermott will conduct the procurement, fabrication
and loadout of the TBM facilities from its Morgan City facility in
As for the second contract - awarded by VAALCO Gabon Inc, an
Vaalco Energy Inc
) - McDermott will execute a design, engineering and procurement
management work for the Etame platform. Houston, Texas-based
McDermott will also carry out a design engineering contract for a
potential Southeast Etame/North Tchibala (SEENT) platform. Both
these projects are located offshore Gabon, West Africa. As per the
contract details, McDermott will set up a safe, reliable and
conventional production facility that will have low operational and
Supported by efficient manpower and a high technological base,
the projects are expected to show profitable results.
McDermott currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating.
Given its geographic footprint in high-growth regions,
technology leadership and efficient execution skills, the company
is poised to benefit from strong industry fundamentals for offshore
construction activities through 2012 and beyond.
However, the transfer of the 'Power Generation Systems' and
'Government Operations' segments into a separate, independent and
publicly traded entity
The Babcock & Wilcox Company
) has left McDermott with a less diversified business, thereby
heightening its risk profile.
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