Oil drilling equipment maker
FMC Technologies Inc.
) entered into an agreement with clean technology company
LiqTech International Inc.
) for the use of silicon carbide membrane technology in oil and
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Upon testing the silicon carbide membrane technology, FMC
Technologies found it suitable for the development of water
treatment systems and other services in the unconventional shale
oil and gas sector.
In the hydraulic fracturing process, huge amounts of water and
sand are injected into a well to increase the cracks in dense
formations. Following this, a considerable amount of water
returns to the surface that is to be injected into deep
underground dumping wells. The silicon carbide membrane
technology with its superior filtration capabilities will
facilitate the treatment and reuse of this produced water.
LiqTech has granted FMC Technologies permission to use its
membranes in oil and gas applications so that these can be
converted into systems for further development.
FMC Technologies currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next 1 to 3 months.
The company is particularly well positioned in the subsea systems
market. It is the company's largest and fastest-growing business,
accounting for about two-thirds of its revenue.
Additionally, FMC Technologies' strong backlog, which now stands
at more than $5 billion, not only reflects steady demand from its
customers but also offers long-term earnings and cash flow
visibility. This enables the company to navigate uncertainty
better than many of its peers.
However, FMC Technologies has historically used bolt-on
acquisitions to plug holes in its product/service portfolio. The
company may find it difficult to complete accretive transactions
in the future, which could negatively impact its growth rate.
Meanwhile, oilfield equipment makers
Natural Gas Services Group Inc.
) as well as
Matrix Service Company
) with a Zacks Rank #2 (Buy), are expected to perform well in the
coming 1 to 3 months.