On Jul 3, offshore oil and gas-focused engineering and construction firm, McDermott International Inc. announced that it has completed construction of the Ayatsil-B Drilling Platform, which it was building for the Mexican state-controlled oil giant PEMEX.
McDermott was given this contract in 2012. The company provided engineering, procurement, fabrication, pre-commissioning, load-out and sea fastening services. The fabrication of this 11,535 ton, eight-leg jacket and deck took place in McDermott’s yard in Altamira, Mexico.
Additionally, McDermott stated that its contract includes the training of PEMEX’s workers for operating and maintaining the Ayatsil-B facility. The Ayatsil-B, in addition to three other drilling platforms and a floating production storage and offloading (FPSO) vessel, would be used to develop heavy oil from the Ayatsil field, located in the Bay of Campeche.
Houston, TX-based McDermott is an engineering and construction company, solely focused on the offshore oil and gas business. The company has a diversified product portfolio, specialty manufacturing and service capabilities as well as proprietary technological expertise.
However, several factors remain drags on the company’s results. These include steep operating expenses, a disappointing earnings trend over the last few quarters and uncertainty regarding the timing of lucrative contracts. Notably, McDermott has failed to meet earnings estimates for four consecutive quarters.
Due to the above-mentioned factors, McDermott currently has a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked players from the oilfield machinery and equipment industry such as Matrix Service Company , Cameron International Corporation and Superior Energy Services, Inc. . While Matrix Service sports a Zacks Rank #1 (Strong Buy), Cameron and Superior Energy hold a Zacks Rank #2 (Buy).