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Equinor (EQNR) Awards $253M Contract Extensions to Transocean

Equinor ASA EQNR awarded a contract extension to offshore drilling contractor Transocean RIG for a drilling program in the Norwegian Sea.

Equinor contracted the Transocean Spitsbergen semisubmersible to drill nine additional wells for two field developments in the Norwegian Sea. There is also an option for two more wells.

The contract’s value, which includes the options, is estimated to be $253 million. The estimated value involves drilling services like casing running, slop treatment, cuttings handling and two remotely-operated vehicles.

The firm part of the contract extension is expected to commence in October 2023 and end in April 2025. This would add $181 million to Transocean’s backlog, excluding revenues associated with performance incentives, additional services and option periods offered in the contract.

Transocean is the world’s largest offshore drilling contractor and a leading provider of drilling management services. Transocean Spitsbergen is a sixth-generation dual-derrick winterized semi-submersible drilling rig. It is capable of drilling high-pressure/high-temperature formations and is provided with an automatic drilling control system.

The rig is planned to start drilling in autumn 2022 for three production wells for the Haltenbanken West Unit, which is part of the Kristin South area in the North Sea. Following this, six production wells are planned for Halten East development, which will be tied to the Asgard field in the Norwegian Sea.

Since 2019, Transocean Spitsbergen has been drilling for Equinor on a continuous basis. The drilling program is expected to continue for a little less than two years and might help increase the reserves in the Norwegian Sea.

Company Profile

Headquartered in Stavanger, Norway, Equinor is one of the leading integrated energy companies in the world.

Zacks Rank & Other Stocks to Consider

Equinor currently sports a Zack Rank #1 (Strong Buy).

Investors interested in the energy sector might look at the following companies that also presently flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Valero Energy Corporation VLO is the largest independent refiner and marketer of petroleum products in the United States. VLO’s Gulf Coast contributed 60.5% to the total throughput volume in the first quarter of 2022.

Valero’s 2022 earnings are expected to surge 409% year over year. VLO currently has a Zacks Style Score of A for Growth and B for Momentum. Through the March-end quarter, Valero returned $545 million to stockholders as dividend payments.

Matador Resources Company MTDR is among the leading oil and gas explorers in unconventional resources in the United States. MTDR currently has a Zacks Style Score of A for Growth and Momentum.

Matador’s 2022 earnings are expected to surge 158.1% year over year. MTDR’s net cash from operating activities is increasing, reflecting strong operations. In first-quarter 2022, the metric was $329 million, which significantly increased from $169.4 million reported in the year-ago quarter.


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