Texas-based Rowan Companies plc’s (RDC) share price rose by about 2% following the news of one of its subsidiaries having inked a two-year drilling contract for the fourth and final ultra-deepwater drillship in Rowan’s current construction program.
The drillship, Rowan Relentless, has been awarded a contract to operate in the U.S. Gulf of Mexico (GoM) by Freeport-McMoRan Oil & Gas LLC, a subsidiary of Freeport-McMoRan Copper & Gold Inc. (FCX).
The contract’s work is scheduled to begin in the third quarter of 2015 and will expectedly augment Rowan’s current contract backlog by about $425 million.
Rowan’s fleet of four ultra deepwater drillships is based on a GustoMSC P10,000 hull design, that can drill wells to a depth of 40,000 feet, in water depth of about 12,000 feet. The favorably positioned drillships are DP-3 compliant and will be fitted with retractable thrusters, two readily deployable seven-ram BOP systems, five mud pumps, dual mud systems and a maximum hook-load capacity of 1,250 tons. At present, all four of the company's ultra-deepwater drillships have secured long-term contracts.
Rowan is a provider of international and domestic contract drilling and aviation services. It also operates a mini-steel mill, a manufacturing facility that produces heavy equipment for the mining, timber and transportation industries and a drilling products group that designs or builds about one third of all mobile offshore jackup drilling rigs.
The company's fleet of 34 jackup rigs is located worldwide, including the Middle East, the North Sea, Trinidad, Southeast Asia and the GoM.
Rowan carries a Zacks Rank #3 (Hold). Investors interested in the same sector could consider stocks like Encana Corp (ECA) and Matrix Service Company (MTRX), both of which sport a Zacks Rank #1 (Strong Buy).