Rowan Companies plc’s (RDC - Free Report) N-Class ultra-harsh environment jack-up rig, Rowan Norway, has been contracted by ConocoPhillips (COP - Free Report) for operations in Norway.
The duration of the contract is estimated at seven months. Subject to partner approval, the contract is anticipated to begin in the second quarter of 2019.
Subsequent to the initial contract term, ConocoPhillips has two options. Per the first option, the company can operate the rig for an estimated duration of five months. Per the second option, ConocoPhillips can use the rig for an estimated duration of nine months. Currently, the Rowan Norway is working with Turkish Petroleum in the Mediterranean Sea. The contract is valid until about April 2019.
Since December 2018, Rowan has announced few contracts and extensions for rigs that include Rowan Gorilla VI, Ralph Coffman and Joe Douglas. These contracts act as a cushion to the commodity price volatility.
Apart from the awards, Rowan already has an impressive contract backlog. Notably, the company’s recent merger agreement with Ensco plc (ESV - Free Report) will strengthen the backlog position that has been estimated at roughly $2.7 billion. Overall, the company is well placed to boost cashflows, considering contract awards and revenue backlog.
Houston, TX-based Rowan primarily provides services related to contract drilling to the oil and gas industries. As of Feb 13, 2018, the fleet strength of the company comprises 25 rigs that can drill wells in the offshore oil and gas resources.
The areas where the rigs primarily operate include the Middle East, Trinidad, North Sea’s Norwegian region, the Gulf of Mexico and the United Kingdom. Rowan’s premium fleet comprises 21jack-up rigs and four ultra-deepwater units.
Zacks Rank & Key Picks
Currently, Rowan carries a Zacks Rank #3 (Hold).
Another better-ranked player in the energy space is NextEra Energy Partners L.P. (NEP - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Based in Juno Beach, Florida, NextEra Energy Partners was formed by NextEra Energy, Inc. in 2014, to acquire, manage and own contracted clean energy projects with stable long-term cash flows. The partnership delivered average positive earnings surprise of 99.1% in the last four quarters.
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