Offshore drilling firm,
Pacific Drilling S.A.
) declared that it has signed an agreement with Star Deep Water
Petroleum Limited, an affiliate of the U.S. energy major Chevron
) for the contract extension of its drillship Pacific Bora.
Pacific Drilling added that this contract extension increases the
backlog of the drillship by about $439 million. As of Aug 22, the
company's total backlog stands at $3 billion.
The rig Pacific Bora can drill up to a water depth of 37,500 feet
and is capable of carrying out operations in water depths of 10,000
feet. It initially started operations in Nigeria in 2011 under a
three-year contract period with the Chevron affiliate.
Luxembourg-based Pacific Drilling provides ultra-deepwater drilling
services to oil and gas companies across the globe. Currently, the
company has a fleet of six operating drillships, five of which are
under contract and one is gearing up for contract commencement.
Pacific Drilling also has two drillships under construction. Apart
from Chevron, the company has ties with other major energy sector
firms like Petrobras (
) and Total S.A. (
Earlier this month, Pacific Drilling reported second-quarter 2014
earnings of 23 cents per share, beating the Zacks Consensus
Estimate of 20 cents. The results were primarily attributable to
strong operational performance and robust fleet growth. The company
has also fared well in the past few quarters, beating estimates
three out of four times in the trailing four quarters, with an
average positive surprise of 26.67%.
However, being a drillship services provider, the company's growth
prospects are tied to other energy firms. With near-term oversupply
in the rig market and multinational energy firms looking to reduce
their mounting capital expenses, offshore drilling companies may
have rough seas ahead.
In keeping with these views, Pacific Drilling currently carries a
Zacks Rank #3 (Hold), implying that it is expected to perform in
line with the broader U.S. market in the next one to three
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