Oil drilling equipment maker
FMC Technologies Inc.
) entered into a deal with LLOG Exploration Company, LLC for the
supply of subsea equipment. The estimated value of the contract
is $114 million.
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Per the deal, FMC Technologies will supply nine subsea trees,
four subsea manifolds, five multiphase meters, and related
topside control and subsea distribution systems for LLOG's Delta
House project. The project is placed in water depths of
approximately 5,000 feet in the Gulf of Mexico Mississippi Canyon
FMC Technologies is well positioned in the subsea systems market
and has received numerous attractive subsea contracts in the
recent past. Earlier, in December last year, the company signed a
$33 million subsea equipment supply contract with Norwegian oil
and gas company
Incorporated in 2000, Houston, Texas-based FMC Technologies, Inc.
is a leading manufacturer and supplier of technology solutions
for the energy industry. The company, which operates 27
manufacturing facilities in 16 countries, is engaged in
designing, producing and servicing technologically sophisticated
systems and products such as subsea production and processing
systems, surface wellhead production systems, high pressure fluid
control equipment, measurement solutions, and marine loading
systems for the oil and gas industry.
Subsea products have seen an increase in interest and we expect
earnings in this segment to strengthen - especially due to FMC
Technologies' leadership position in subsea production systems,
including subsea trees, controls and manifold and tie-in systems.
However, as is the case with other oil services and equipment
suppliers, results for FMC Technologies are directly exposed to
oil and gas prices, which are inherently volatile and subject to
complex market forces. A potential drop in prices could curtail
deepwater drilling and subsea equipment demand, thereby affecting
the company's revenues, earnings and cash flow.
FMC shares currently retain a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on the stock.