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BP p.l.c. (BP) - free report >>
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BP p.l.c. (BP) - free report >>
Diamond Offshore Drilling, Inc. (DO) - free report >>
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Diamond Offshore (DO) Secures Additional Backlog Worth $350M
Diamond Offshore (DO - Free Report) , an offshore drilling contractor, has been awarded a two-year contract extension with a subsidiary of BP plc (BP - Free Report) in the U.S. Gulf of Mexico. The extension has been secured for the Ocean BlackHornet drillship and represents approximately $350 million of additional backlog.
The Ocean BlackHornet is a seventh-generation Gusto P10000 drillship, built in 2014. It can operate at a depth of 12,000 feet and reach a maximum drilling depth of 40,000 feet.
Diamond Offshore’s fleet utilization level increased to 69% in the fourth quarter of 2023 from the prior-year level, while revenue efficiency remained intact. The offshore driller added $245 million in backlog during the fourth quarter. The company also secured $362 million in contract awards last month, in addition to its backlog worth $1.4 billion as of Jan 1, 2024.
DO mentions that the contract award strengthens its relationship with an important client in the Gulf of Mexico. This will significantly contribute to its 2025 and 2026 backlog and future cash flows.
Zacks Rank and Key Picks
Currently, DO carries a Zacks Rank #5 (Strong Sell), while BP holds a Zacks Rank #3 (Hold).
Investors might want to look at some other top-ranked stocks in the energy sector, such as Energy Transfer LP (ET - Free Report) and Archrock, Inc. (AROC - Free Report) . Both Energy Transfer and Archrock presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.