Rowan Companies plc
) has inked a three-year contract with
Cobalt International Energy, L.P.
) for one of Rowan's new ultra-deepwater drillship - Rowan
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Rowan Reliance is under construction at the Hyundai Heavy
Industries Co. Ltd. shipyard in Ulsan, South Korea. The drillship
is scheduled for delivery at the end of Oct and is likely to
operate in the U.S. Gulf of Mexico.
Upon mobilization, the contract is expected to be effective in
late Jan 2015. Rowan Reliance will have an effective dayrate of
$602,000, including mobilization revenues. The contract is
estimated to add $660 million to its revenue backlog.
HHI is constructing four ultra-deepwater drillships for Rowan,
Rowan Reliance being one of them. All four drillships are based
on a GustoMSC P10,000 hull design which will enable drilling up
to a depth of 40,000 feet in water depths of about 12,000 feet.
The DP-3 compliant, dynamically positioned drillship will be
fitted with retractable thrusters, two readily deployable
seven-ram BOP systems, five mud pumps, dual mud systems and a
maximum hookload capacity of 1,250 tons.
With this latest award for Rowan Reliance, Rowan has three of its
four ultra-deepwater drillships under construction at HHI under
contract. Rowan Relentless, the fourth uncontracted drillship, is
expected to be delivered from the shipyard at the end of Mar
Rowan's premium high-specification rig fleet enjoys greater
utilization than most other shallow-water fleets. We believe that
the company, with its improved rig execution level, stands to
benefit from the upward trend in the high-spec jackup market and
mining equipment orders.
Rowan holds a Zacks Rank #3 (Hold), which is equivalent to a
short term hold rating. However, there are other stocks in the
oil and gas sector -
Cabot Oil & Gas Corp.
) - which hold a Zacks Rank #1 (Strong Buy) and are
expected to perform better.