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KBR to Offer Solutions for High CO2 Gas Field Development

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KBR, Inc. (KBR - Free Report) has received a contract from a leading integrated energy, resources and materials group in Japan, namely JX Nippon Oil & Gas Exploration Corporation, for a feasibility study for high CO2 gas field development.

With this agreement, KBR will assess options for Carbon Capture and Sequestration (CCS), alongside blue hydrogen production relating to oil and gas fields in South East Asia. Notably, JX Nippon has been expanding its global track record of CCS/CCUS projects in South East Asia.

This contract also entails KBR to provide technical consultancy services in relation to developing concepts and technology recommendations for the capture of CO2, reinjection, as well as production of blue (i.e. carbon free) hydrogen.

"We are excited to be a part of this significant project which is indicative of the global transition to more sustainable energy supplies and our ambition to grow and maintain a substantial presence in Asia Pacific," said Jay Ibrahim, KBR’s president, Energy Solutions.

Energy Solutions Business: A Solid Growth Driver

Energy Solutions, accounting for 23.8% of total revenues, is experiencing solid top-line growth. The company’s consulting business has also been witnessing increased activity over the last few quarters on the back of more efficient reutilization and a strong pricing environment. Moreover, an increasing portfolio of smaller and OpEx-facing projects, services, program management, and maintenance contracts provides the company a stronger foundation than the previous years. It believes that a healthy balance between energy and government projects positions it well for future growth.

Recently, KBR reported strong results for first-quarter 2020, with earnings and revenues beating the Zacks Consensus Estimate and improving year over year, given solid growth of the Energy Solutions business. Total revenues of $1.54 billion in the quarter increased 14.7% year over year on the back of 80.5% revenue growth from the Energy Solutions segment.

KBR’s business continues to be resilient amid COVID-19 impacts and a soft energy market, backed by mission critical government services and proprietary technology solutions.

Owing to solid performance, its shares have outperformed the industry in the past year. Notably, the company is banking on strength across businesses to optimize growth potential. Also, steady backlog growth is adding to KBR’s bliss.

Zacks Rank

KBR — which shares space with Gates Industrial Corporation plc (GTES - Free Report) , Quanta Services, Inc. (PWR - Free Report) and AECOM (ACM - Free Report) in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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