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Chevron Extends Shelf Drilling's Rig Contract in Nigeria

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Chevron Corporation (CVX - Free Report) has awarded Shelf Drilling a one-year contract extension for its Scepter jack-up rig operating offshore Nigeria. The extension will begin immediately after the current contract expires in July 2025. The added contract value is about $50 million, further strengthening the two companies’ ongoing collaboration in offshore drilling.

A Strong Partnership Since 2023

Chevron initially awarded the two-year contract to Shelf Drilling in 2023, valued at approximately $118 million, including the mobilization fees, with an option for an additional one-year extension. With the option now exercised, the Scepter rig, which was scheduled to stay till July 2025 for Chevron, will now be extended till July 2026.

An Overview of Scepter Jack-up Rig

Shelf Drilling’s Scepter jack-up rig is of Keppel FELS Super B Class design, which was built in 2008 and upgraded in 2019. It boasts a maximum drilling depth of 35,000 feet and operates in water depths of up to 350 feet. Designed to accommodate 150 personnel, the rig is a crucial asset in Nigeria’s offshore drilling sector.

Chevron announced this contract extension immediately after Shelf Drilling and Arabian Drilling planned to extend their offshore drilling footprint by combining resources and deploying some of the latter’s premium jack-up rigs internationally. Therefore, this contract extension validates the capabilities of both companies to expand their reach globally.

CVX’s Zacks Rank and Key Picks

Houston, TX-based Chevron is one of the largest publicly traded oil and gas companiesthat participates in every aspect related to energy —from oil production to refining and marketing. Currently, CVX has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some top-ranked stocks like SM Energy Company (SM - Free Report) , Prairie Operating Co. (PROP - Free Report) and Gulfport Energy Corporation (GPOR - Free Report) .While SM Energy and PROP currently sport a Zacks Rank #1 (Strong Buy) each, Gulfport Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Denver, CO-based SM Energy Company is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. The Zacks Consensus Estimate for SM’s 2024 earnings indicates 15.11% year-over-year growth.

Houston-based Prairie Operating is an independent energy company engaged in the development and acquisition of proven, producing oil and natural gas resources principally in the United States. The Zacks Consensus Estimate for PROP’s 2024 earnings indicates 81.19% year-over-year growth.

Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America. The Zacks Consensus Estimate for GPOR’s 2024 earnings indicates 108.53% year-over-year growth.

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