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McDermott Unit Wins $200M EPCI Project

Zacks Equity Research

Energy-focused engineering and construction firm McDermott International Inc. (MDR) announced that one of its units was awarded a contract by a client in Arabian Gulf. The Engineering, Procurement, Construction and Installation (:EPCI) job will increase the company’s fourth quarter 2013 backlog by $200 million.

The project – an extension of the work completed earlier for the same customer and in the same field – involves fabrication, transportation and installation of offshore facilities. It also includes two production deck modules and ten observation platforms. The contract incorporates provisions for two subsea pipeline installations, three submarine power cables and two fiber optic cables.

Engineering activities will be performed at the offices in Dubai and Al Khobar, while construction and transportation will take place from the Jebel Ali fabrication facility. The installation will be executed from vessels belonging to the company’s global fleet that are slated to mobilize in second quarter 2014. The project is scheduled to be over by first quarter 2015.

Houston, Texas-based McDermott is an engineering and construction company, solely focused on the offshore oil and gas business. McDermott primarily serves the worldwide offshore oil and gas field developments, including the front-end design and detailed engineering, fabrication and installation of offshore drilling and production facilities, as well as installation of marine pipelines and subsea production systems. Additionally, McDermott provides project management and procurement services.

McDermott currently carries 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.

Meanwhile, one can consider other stocks in the energy sector such as SM Energy Company (SM), Matador Resources Company (MTDR) and Emerge Energy Services LP Commo (EMES) which currently hold a Zacks Rank #1 (Strong Buy) and offer good value.

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