Oil drilling equipment maker
FMC Technologies Inc.
) entered into a deal with energy major
) for the manufacture and supply of subsea equipment.
Per the deal, FMC Technologies will supply 2 manifolds and
related control equipment to support water injection in the
Thunder Horse field. The field is located in water depths of
approximately 6,300 feet in the Gulf of Mexico Mississippi Canyon
area. FMC Technologies' scope of supply also includes numerous
pipeline end terminations, flowline and well jumper kits, and
umbilical termination assemblies. The subsea equipment is slated
to be delivered in first half of 2013.
Earlier in January, FMC Technologies won contracts from LLOG
Exploration Company, LLC and CNR International - a wholly owned
subsidiary of independent oil and gas explorer
Canadian Natural Resources Ltd.
) - for the supply of subsea equipment.
FMC Technologies shares currently retain a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one to three months. The company is
expected to release its fourth quarter earnings on Feb 12, before
the opening bell.
As is the case with other oil services and equipment suppliers,
the 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.
Additionally, FMC Technologies operates manufacturing facilities
in 15 countries outside the U.S., and approximately three-fourths
of its sales are generated internationally. The company's
operating areas include economically and politically volatile
regions such as North Africa, West Africa, the Middle East, Latin
America and the Asia Pacific. Instability and unforeseen changes
in these markets may have an adverse impact on FMC Technologies'
operations and earnings.
However, oilfield equipment maker
), with a Zacks Rank #2 (Buy), is expected to perform well in the
coming one to three months.
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