Per the framework agreement, Equinor ASAEQNR has awarded a six-well drilling contract in the Norwegian continental shelf (NCS) to Transocean Ltd RIG . The value of the contract is estimated at about $89 million.
According to the terms, Transocean Spitsbergen was the first rig to be included by the company. Transocean Norge is the second rig to be included, which is expected to commence operations in the summer of 2019. Also, the rig has received a contract option for drilling four additional wells and is intended for subsequent continuing options.
The contract comprises providing drilling services such as slop treatment and cuttings handling, as well as part of the mobilisation fee. The six wells will be drilled acrossTordis/Vigdis, Visund, Bauge and Snorre licenses.
Owned by Hayfin Capital Management and Transocean, Transocean Norge is designed for operating in the NCS. It is winterized to endure Norwegian weather conditions.
Recently, Equinor awarded a drilling contract to Seadrill Norway Operations Limited, a subsidiary of Seadrill Limited SDRL , for the use of semi-submersible rig West Hercules. The contract is related to the drilling of two exploration wells in the Barents Sea with options for drilling nine additional wells. Operations are anticipated to commence in the spring of 2019.
Equinor's focus on improving resources recovery in mature fields bodes well. The company operates in all major hydrocarbon-producing regions of the world, with an emphasis on the NCS. We believe that Equinor is well positioned to sustain steady production growth in the next few years on the back of large resource base at NCS.
In the past year, Equinor's shares have rallied 30.8% compared with the industry 's 21.1% increase.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zacks Rank #3 (Hold).
Another better-ranked player in the same sector is Petroleo Brasileiro S.A. PBR or Petrobras SA and TC Pipelines, LP TCP . Both these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.
TC Pipelines purchases, owns and actively participates in the management of U.S.-based natural gas pipelines and related assets. The company delivered an average positive earnings surprise of 3.7% in the last four quarters.
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