Oil drilling equipment maker FMC Technologies Inc. ( FTI ) has inked a deal with Norway's Statoil ASA ( STO ), an integrated oil and gas company, for the supply of additional subsea tools. The order is estimated to have a value of $47 million.
Per the deal, FMC Technologies will supply subsea trees and choke modules for the development of the Tyrihans oil field. The field is situated at a water depth of 984 feet in the Norwegian Sea. The subsea equipment is slated to be delivered in 2014.
FMC Technologies shares a long-term relationship with Statoil and have been working together on the Tyrihans field since 2006.
Houston-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. The company operates 30 manufacturing facilities in 16 countries.
The company is engaged in the designing, producing and servicing of technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions and marine loading systems for the oil and gas industry. FMC Technologies conducts its operations in three segments: Subsea Technologies, Surface Technologies and Energy Infrastructure.
FMC Technologies 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 revenue.
Subsea products have witnessed an increase in interest and we expect earnings in this segment to strengthen - especially due to FMC Technologies' leading position in subsea production systems, including subsea trees, controls and manifold and tie-in systems.
However, FMC Technologies relies on its ability to develop and acquire essential products and technologies that drive its operational performance and growth. If the company's technologies or products become obsolete or can't be brought to the market in a timely and competitive manner, it may face severe operational and financial dilemmas.
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 one to three months.
Two oil field machinery and equipment makers, that are expected to outperform the broader U.S. equity market over the next one to three months, are Natural Gas Services Group Inc . ( NGS ) and Matrix Service Company ( MTRX ). Both of these stocks carry a Zacks Rank #2 (Buy).