Back to top

Analyst Blog

Rowan Companies plc (RDC - Analyst Report) has inked a three-year contract with Cobalt International Energy, L.P. (CIE - Snapshot Report) for one of Rowan’s new ultra-deepwater drillship – Rowan Reliance.

Rowan Reliance is under construction at the Hyundai Heavy Industries Co. Ltd. shipyard in Ulsan, South Korea. The drillship is scheduled for delivery at the end of Oct and is likely to operate in the U.S. Gulf of Mexico.

Upon mobilization, the contract is expected to be effective in late Jan 2015. Rowan Reliance will have an effective dayrate of $602,000, including mobilization revenues. The contract is estimated to add $660 million to its revenue backlog.

HHI is constructing four ultra-deepwater drillships for Rowan, Rowan Reliance being one of them. All four drillships are based on a GustoMSC P10,000 hull design which will enable drilling up to a depth of 40,000 feet in water depths of about 12,000 feet.

The DP-3 compliant, dynamically positioned drillship will be fitted with retractable thrusters, two readily deployable seven-ram BOP systems, five mud pumps, dual mud systems and a maximum hookload capacity of 1,250 tons.

With this latest award for Rowan Reliance, Rowan has three of its four ultra-deepwater drillships under construction at HHI under contract. Rowan Relentless, the fourth uncontracted drillship, is expected to be delivered from the shipyard at the end of Mar 2015.

Rowan’s premium high-specification rig fleet enjoys greater utilization than most other shallow-water fleets. We believe that the company, with its improved rig execution level, stands to benefit from the upward trend in the high-spec jackup market and mining equipment orders.

Rowan holds a Zacks Rank #3 (Hold), which is equivalent to a short term hold rating. However, there are other stocks in the oil and gas sector –  Cabot Oil & Gas Corp. (COG - Analyst Report) and Dril-Quip, Inc. (DRQ - Analyst Report)  – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%