Rowan Companies plc’s RDC super Gorilla class jack-up, Rowan Gorilla VI, has received a contract extension from Royal Dutch Shell plc RDS.A in Trinidad.
The current drilling program will continue till about March 2019. Consequently, the Rowan Gorilla VI will be used for platform support and accommodations work until about September 2019. The company will have an option to extend this work further until November 2019.
The news closely follows the contract received by Ralph Coffman and Joe Douglas in December 2018.
240-C Class harsh environment jack up rig — Ralph Coffman — has received a 180-day contract in Trinidad.
Apart from the awards, Rowan already has an impressive contract backlog. Notably, the company’s recent merger agreement with Ensco plc ESV will strengthen the backlog position that has been estimated at roughly $2.7 billion. Overall, Rowan is well placed to boost cashflows on the back of contract awards and revenue backlog.
Rowan offers investors stable earnings and cash flow visibility, given its technologically advanced and versatile offshore drilling fleet, strong backlog and considerable pricing power. Rowan's joint venture with Aramco is expected to drive higher utilizations for the drop-down rigs.
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 are the Middle East, Trinidad, North Sea’s Norwegian region, the Gulf of Mexico and the United Kingdom. The company’s premium fleet comprises 21jackups 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 SunCoke Energy, Inc SXC, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke acquires, owns and operates coke making as well as coal mining operations. The company delivered average positive earnings surprise of 302.6% in the last four quarters.
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