) has awarded a five-year global frame agreement to BP
International Limited, a subsidiary of
BP PLC (BP): Free Stock Analysis Report
DRIL-QUIP INC (DRQ): Free Stock Analysis
LINN ENERGY LLC (LINE): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
To read this article on Zacks.com click here.
The pact between the two parties relates to the supply of subsea
wellhead equipment and related services by BP. The contract
states the terms and conditions for worldwide call-off orders
placed by BP for Dril-Quip's Big Bore II-H series subsea wellhead
systems. Orders already placed by BP this year will also be
administered by the terms stipulated in this contract.
Under the contract, subsequent orders will be treated as part of
Dril-Quip's backlog. BP holds an option on the basis of which the
contract can be extended for five years.
Dril-Quip manufactures highly engineered offshore drilling and
production equipment for deepwater severe-service applications
and harsh environmental conditions. The company designs and
manufactures subsea and surface wellheads, subsea and surface
production trees, mudline hanger systems, specialty connectors,
and associated pipe, drilling and production riser systems,
wellhead connectors and diverters, which are used in offshore rig
The company's products are used by major integrated, large
independent and foreign national oil and gas companies in
offshore areas throughout the world. Dril-Quip also provides
installation and reconditioning services and rents tools for use
in the installation and retrieval of its products.
A sequential increase in Dril-Quip's backlog and its debt-free
balance sheet position it favorably. We also expect large orders
in 2013 from the Gulf of Mexico and Brazil, with rising demand
and activity levels in these regions. This gives it the financial
flexibility to take advantage of growth opportunities while
returning capital to shareholders.
Dril-Quip carries a Zacks Rank #3 (Hold). However, Zacks Ranked
#1 (Strong Buy) stocks -
Stone Energy Corp.
Linn Energy LLC
) - are good buying options for the short term.