Acergy Has Strong Leverage

London-based Acergy S.A. (ACGY - Analyst Report), previously known as Stolt Offshore S.A. (SOSA), is a leading oilfield contractor engaged in the designing, procurement, building, installation and servicing of a range of offshore surface and sub-surface equipment for the oil and gas industry.

Acergy's year-end earnings came in better than expected, though backlog slipped, reflecting the tentative operating environment due to commodity price and credit market overhang. With a healthy backlog, significant cash balances and no near-term refinancing requirements, Acergy remains in a comfortable position to weather the challenging and volatile business environment.

Our continued Buy recommendation on Acergy ADRs also reflects the company's strong leverage to the still very favorable outlook for deepwater oilfield activities and the quality of its client base, which mostly include well-capitalized oil majors or national oil companies.