Texas-based ExxonMobil Corporation (XOM) has inked contract extensions with Malaysia-based Silk Holdings Bhd’s (Silk) subsidiary, Jasa Merin (Malaysia) Sdn Bhd.
The contract extensions are valued at about $6.97 million with respect to the provision of two 60 metric ton Anchor Handling Tug Supply (AHTS) vessels. The extended contracts have a one-year duration slated to start on Feb 2 and Feb 5.
In July 2012, ExxonMobil had awarded 18-month contracts, worth $10.96 billion to Jasa Merin. The contracts related to the provision of 2 AHTS vessels, with an option to extend the deal for 12 months. Jasa Merin mainly focuses on the supply of offshore support vessels services to the petroleum industry.
ExxonMobil is the world’s best run integrated oil company given its track record of superior return on capital employed. As the largest publicly traded oil company, ExxonMobil has long been a core holding for investors seeking a defensive name with continued dividend growth.
ExxonMobil is fairly active in its investment program. The company plans to spend about $185 billion over the next five years — up 29% from the last five-year period. The capex covers as many as 21 important oil and gas projects currently under the anvil and are estimated to accumulate over 1 million net oil-equivalent barrels per day by 2016. It includes the Kearl Oil Sands development project in Canada, four in West Africa and Kashagan Phase 1 in Kazakhstan.
ExxonMobil is also engaged in a large liquefied natural gas project in Papua New Guinea, which is expected to begin deliveries in 2014. It will unearth more oil from the development of Hebron oil field offshore the Canadian province of Newfoundland and Labrador. The development will help in recovering over 700 million barrels of oil and the platform is expected to yield its first oil toward the end of 2017.
ExxonMobil carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include Matrix Service Co. (MTRX), Swift Energy Co. (SFY) and NGL Energy Partners LP (NGL). All these stocks sport a Zacks Rank #1 (Strong Buy).
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