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Chevron Extends Shelf Drilling's Contracts Offshore Thailand

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Chevron Corporation(CVX - Free Report) has extended the Shelf Drilling’s contracts for its Chaophraya and Krathong rigs, which have been operating offshore in Thailand for another two years. The combined contract valued at $197 million will ensure continued operations after the completion of its current contract in the second half of 2025. The contract extension will maintain CVX’s drilling activities in the Gulf of Thailand and mark a successful partnership between Chevron and Shelf Drilling in offshore exploration.

Custom-Built Rigs for CVX’s Factory-Style Operations

Shelf Drilling’s jack-up rigs were custom built to meet CVX’s factory-style drilling model in the Gulf of Thailand and also contained unique offline capabilities to align with the company’s requirements. The Chaophraya and Krathong rigs, delivered in 2016 and 2017, respectively, are LeTourneau Super 116 Enhanced Class models with high-spec drilling technology and can accommodate up to 160 people at a time.

Shelf Drilling’s Global Expansions and Strategic Moves

Shelf Drilling, along with its presence in Thailand, has a strong reach globally. The company has recently secured an Acknowledgement of Compliance for the Norwegian authorities and has been cleared to commence operations under a contract with Equinor. The company commenced new operations in West Africa and sold a rig for decommissioning projects in Malaysia. The company’s global presence signifies its geographic diversification and validates its contract extension with Chevron.

CVX’s Zacks Rank and Key Picks

The U.S. energy major Chevron is one of the world’s largest publicly traded oil and gas companies with operations that span almost every corner of the globe. However, the company is grappling with high sensitivity to oil price fluctuations and relatively expensive valuation. Currently, CVX has a Zacks Rank #4 (Sell).

Investors interested in the energy sector might look at some better-ranked stocks like Archrock, Inc. (AROC - Free Report) , Kosmos Energy Ltd. (KOS - Free Report) and Flotek Industries, Inc. (FTK - Free Report) .While Archrock currently sports a Zacks Rank #1 (Strong Buy), Kosmos Energy and Flotek Industries each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is a provider of natural gas contract compression services and a supplier of aftermarket services of compression equipment. The Zacks Consensus Estimate for AROC’s 2024 earnings indicates 59.42% year-over-year growth.

Hamilton-based Kosmos Energy Ltd. operates as an oil and gas exploration and production company focused on underexplored regions in Africa. KOS’ expected EPS (earnings per share) growth rate for the next 5 years is 17.50%, which aligns favorably with the similar industry growth rate.

Flotek Industries develops and delivers prescriptive chemistry-based technology, including specialty chemicals, to clients in the energy, consumer industrials and food & beverage industries. The Zacks Consensus Estimate for FTK’s 2024 earnings indicates 123.28% year-over-year growth.


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