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Rowan's (RDC) Jack up Rig Receives Contract in Trinidad

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Rowan Companies plc’s 240-C Class harsh environment jack up rig — Ralph Coffman — has received a 180-day contract in Trinidad.

Previously, the company received a contract from CGX Resources for the same rig. The jack-up, which is capable of performing in harsh environments, is anticipated to initiate the contract in Trinidad in April 2019. Following the completion of the contract, the rig will directly initiate the contract with CGX Resources in Guyana.

Currently, the rig is hired by oil and natural gas explorer GulfSlope Energy in the Gulf of Mexico. Ralph Coffman is expected to complete activities under the current contract in mid-January 2019.     

Moreover, a two-well option has been exercised by BP plc (BP) for the jackup rig Joe Douglas. These exercised option wells are likely to continue until about May 2019.  Another two-well option has been received by the Joe Douglas.

Apart from the awards, Rowan already has an impressive contract backlog. Notably, the company’s recent merger agreement with Ensco plc (ESV) will strengthen the backlog position that has been estimated at roughly $2.7 billion. Overall, Rowan is well placed to boost cashflows, considering contract awards and revenue backlog.

Houston, TX-based Rowan primarily provides services related to contract drilling to the oil and gas industries. As of Feb 13, 2018, the fleet strength of the company comprises 25 rigs that can drill wells in the offshore oil and gas resources. The areas where the rigs primarily operate include the Middle East, Trinidad, North Sea’s Norwegian region, the Gulf of Mexico and the United Kingdom. Rowan’s premium fleet comprises 21jackups and four ultra-deepwater units.

Zacks Rank & Key Picks

Currently, Rowan carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are SunCoke Energy, Inc (SXC - Free Report) , Cabot Oil & Gas Corporation and Enterprise Products Partners L.P. (EPD - Free Report) . While SunCoke Energy sports a Zacks Rank #1 (Strong Buy), Cabot Oil and Enterprise Products Partners carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunCoke acquires, owns and operates coke making and coal mining operations. The company delivered average positive earnings surprise of 302.6% in the last four quarters.

Houston, TX-based Cabot is an independent oil and gas exploration company with producing properties mainly in the continental United States. The company delivered average negative earnings surprise of 5.7% in the last four quarters.

Headquartered in Houston, TX, Enterprise Products Partners is among the leading midstream energy players in North America. It pulled off average positive earnings surprise of 9.3% in the last four quarters.

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