Oil drilling equipment maker FMC Technologies Inc. (FTI) announced the receipt of a $96 million contract from Norway’s Statoil ASA (STO), an integrated oil and gas company.
Per the deal, FMC Technologies will provide subsea trees, wellheads, a manifold, control systems and other related tools for the development of the Smorbukk South Extension Project. The subsea equipment is slated to be delivered in 2014.
The Smorbukk South development is a portion of the Asgard oil field project, situated in the Norwegian Sea. Since 1996, FMC Technologies has been supplying subsea tools for the development of the Asgard oil field.
Management reveals that this award is FMC Technologies’ third order from the fast-track portfolio contract declared in 2012.
Houston, Texas-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.
It is engaged in the designing, producing and servicing 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 seen an increase in interest, and we expect earnings in this segment to strengthen – especially due to FMC Technologies’ leadership 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 firms in the energy sector that are expected to significantly outperform the equity markets in the next one to three months are Calumet Specialty Products Partners LP (CLMT) and Range Resources Corporation (RRC). Both of these stocks carry a Zacks Rank #1 (Strong Buy).
More From Zacks.com