Oil field service provider TechnipFMC plc (FTI - Free Report) received an Engineering, Procurement, Construction and Installation (EPCI) contract for an Eastern Canadian project named West White Rose ("WWR") from Canadian integrated energy company, Husky Energy. The approval for the WWR development was received by Husky Energy in May 2017.
Deal and Project Details
Per the contract, TechnipFMC will provide and install subsea equipment and connect the WWR platform to the existing SeaRose floating production, storage and offloading (FPSO) vessel. To connect the two, TechnipFMC will provide tie-in manifolds, flexible flowlines and control umbilicals. The financial terms between the companies are yet to be disclosed.
The project will also utilize a fixed platform with a concrete gravity structure, which will be built by a general partnership between SNC-Lavalin, Dragados Canada and Pennecon, by 2021. The original White Rose field is located in water depth of about 120 meters, around 350 kilometers east of St. John’s, Newfoundland and Labrador.
We will like investors to know that production is expected to start at the site in 2022 with a peak rate of around 75,000 barrels per day expected by 2025. The increase in production capacity will be led by development wells, which will be brought online.
Importance of the Deal
The deal indicates that TechnipFMC will continue its association with Husky in the White Rose field that started in 2013. It will also help TechnipFMC to maintain its strong position in East Coast offshore Canada.
This deal follows a slew of contracts that the company has recently received. The company was awarded EPCI contracts by Statoil ASA , Eni S.p.A. (E - Free Report) and ExxonMobil Corporation (XOM - Free Report) in the Norwegian North Sea, Mozambique and Guyana, respectively.
About the Company
London-based TechnipFMC is a leading manufacturer and supplier of technology solutions for the energy industry. The company was formed following the January 2017 merger between Technip and FMC Technologies. It is engaged in the designing, producing and servicing technologically sophisticated systems and products for subsea, onshore and offshore projects.
TechnipFMC's dominant market share, technology leadership and efficient execution skills are its key pockets of strength. However, following the massive fall in rig count, activity levels in North America deteriorated more than expected. The company has already warned that 2017 could turn out to be another difficult year with order growth set to remain anemic.
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TechnipFMC has lost 28.2% of its value year to date compared with 33.7% fall of its industry.
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