Oil field services firm Oceaneering International Inc.OII has announced the procurement of an umbilical contract from Shell Offshore Inc. − an affiliate of integrated energy major Royal Dutch Shell plc RDS.A .
Per the agreement, Oceaneering is expected to provide umbilicals for the development of Appomattox and Vicksburg deepwater fields, situated in the Mississippi Canyon region of the U.S. Gulf of Mexico.
Oceaneering will likely start manufacturing umbilicals at its Panama City, FL-based facility by the fourth quarter of this year. The construction is anticipated to be completed by the third quarter of 2017.
Houston, TX based Oceaneering provides engineered services and products to oil and natural gas offshore players. The company boasts strong earnings which comfortably surpassed the Zacks Consensus Estimate in the second quarter of 2015. Moreover, Oceaneering surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average positive surprise of 6.83%.
U.K.-based Royal Dutch Shell is one of the largest integrated energy firms in the world with a strong and diversified portfolio of development projects that offer attractive long-term opportunities.
However, weakness in crude prices for more than a year will likely have a negative impact on the future earnings of both Oceaneering and Royal Dutch Shell.
Currently, both Oceaneering and Royal Dutch Shell carry a Zacks Rank #3 (Hold), which implies that the stocks will perform in line with the broader U.S. equity market over the next one to three months.
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