KBR Clinches Pre-NTP Services Deal for Woodfibre LNG Project
KBR, Inc. KBR fortified its Engineering and Construction (E&C) segment by securing a Pre-Notice to Proceed (Pre-NTP) services contract from the Woodfibre LNG Limited. The contract follows the successful completion of a Front End Engineering Design (“FEED”) process for the Woodfibre LNG Project, which was announced last year.
The Pre-NTP Services Contract
Per the contract, KBR will offer Pre-NTP services including additional FEED work and cost optimization along with a proposal for an engineering, procurement and construction (“EPC”) contract. The project is located in the District of Squamish near Vancouver, British Columbia
The company’s operating centers based in Houston and Edmonton will carry out the Pre-NTP services. The EPC phase of the project is expected to commence next year.
Revenues related with the project will be booked as unfilled orders in Engineering and Construction business Segment backlog in fourth-quarter 2017.
Major Contract Wins
Some other notable contracts recently clinched by KBR’s Engineering & Construction segment include a Concept and FEED contract from Statoil, engineering and project management services contract from JVGAS, and a pre- FEED and project support services deals from BP. The company also clinched a FEED contract with SKLLC for the topsides of the Absheron Early Production Project few weeks back.
This apart, the company secured a contract to offer Engineering Support Services for Operations for Abu Dhabi Gas Development Company — a 60/40 joint venture of Abu Dhabi National Oil Company and Occidental of Abu Dhabi Ltd.
Existing Business Scenario
Growing client operational expenditure is anticipated to benefit the company’s Engineering & Construction segment. Backlog of this segment is likely to gain momentum, on account of increased work in consulting areas going forward.
In the last six months, this Zacks Rank #2 (Buy) company returned 24.3%, outperforming the industry’s average growth of 15.4%. Currently, the company is banking on the strength and momentum of its Government Services businesses to optimize growth potential. Further, it remains bullish about the present economic conditions in the Middle East, particularly in Iraq and Eastern Europe, which offers lucrative prospects for its government business. This apart, investments undertaken around the world in refining and petrochemicals market represent significant opportunity for KBR.
Other Stocks to Consider
Some other top-ranked stocks from the same space include Thor Industries, Inc. THO, EMCOR Group, Inc. EME and Weyerhaeuser Company WY. While Thor Industries and EMCOR Group sport a Zacks Rank #1 (Strong Buy), Weyerhaeuser Company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thor Industries has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 15.3%.
EMCOR Group has outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 16.9%.
Weyerhaeuser Company has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 7.2%.
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