Oil drilling equipment maker FMC Technologies Inc. (FTI - Free Report) has entered into a deal with independent oil and gas exploration and production company Anadarko Petroleum Corporation (APC - Free Report) for the supply of subsea equipment.
Per the deal, FMC Technologies will supply five enhanced horizontal subsea trees, tree mounted controls, two manifolds and other related tooling and equipment for Anadarko’s Heidelberg field. The project is in water depth of approximately 5,310 feet in the Gulf of Mexico, Green Canyon section.
FMC Technologies is well positioned in the subsea systems market and has received numerous attractive subsea contracts in the recent past from energy majors Petroleo Brasileiro S.A., or Petrobras (PBR - Free Report) and Statoil ASA (STO - Free Report) .
Back in Jan 2012, FMC Technologies signed another contract to supply subsea equipment and life-of-field services to Anadarko for its Lucius project, approximately 275 miles southeast of Galveston in Keathley Canyon Block 875.
With the success of these supply contracts, FMC Technologies is on an expansion path. It looks forward to more such opportunistic deals in 2013 to gain significant market share. We believe such accomplishments will garner profits for FMC Technologies in the upcoming quarters.
However, FMC Technologies relies on its ability to develop and acquire essential products and technologies that drive its operational performance and growth. If its technologies or products become obsolete, or if it cannot bring these to market in a timely and competitive manner, it may face severe operational and financial difficulties.
FMC Technologies currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months.