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Valaris (VAL) to Provide Jack-Up for Seagull Oil Project

Zacks Equity Research

Valaris plc VAL recently entered into an agreement with Neptune Energy. Per the accord, Valaris will be providing offshore contract drilling services for the development of the Seagull oil project in Central North Sea, UK. The companies are yet to disclose the financial terms.

Precisely, Valaris’ heavy-duty jack-up, Rowan Gorilla VI, will be employed by Neptune Energy to drill four firm wells. Neptune Energy added that the drilling campaign is for 18 months and will commence from the third quarter of 2020.

The Seagull development, which is expected to have a life span of 10 years, is likely to initially produce daily oil equivalent volumes of 50,000 barrels. The exploration and production company expects that oil will account for 80% of total initial production. The company has estimated that the field will have proved and probable gross reserves of 50 million barrel of oil equivalent.

Notably, in the Seagull oil project, the operator Neptune Energy has roughly a 35% ownership stake. The remaining 50% and 15% interests are owned by British energy giant BP plc BP and Japan Petroleum Exploration Co., Ltd, respectively.

Based in London, the UK, Valaris currently carries a Zacks Rank #3 (Hold). Meanwhile, two better-ranked stocks in the energy space are Dril-Quip, Inc. DRQ and Delek Logistics Partners LP DKL. While Dril-Quip carries a Zacks Rank #2 (Buy), Delek Logistics sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dril-Quip beat the Zacks Consensus Estimate in three of the trailing four quarters, the average earnings surprise being 49%.

Delek Logistics is likely to see earnings growth of 4.9% in 2019.

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