Transocean Ltd. RIG, a Switzerland-based leading international provider of offshore contract drilling services, announced that it has received a binding notification of award from Oil and Natural Gas Corporation (ONGC), India's largest oil and gas exploration and production company, for the Dhirubhai Deepwater KG1 (DDKG1) drillship.
Unveiling the ONGC Contract
The contract, set to span over 21 months, is anticipated to commence in the first quarter of 2024. The value of this contract stands at a commendable $222 million, excluding a mobilization fee of $5 million, an impressive figure that underscores the trust and confidence ONGC has placed in Transocean's capabilities.
A Glimpse into DDKG1: Powering Offshore Exploration
The DDKG1 is a sixth-generation ultra-deepwater drillship, boasting the innovative Samsung 12000 double-hull design. With its remarkable capabilities, this drillship can effectively operate in water depths of up to 12,000 feet and boasts a maximum drilling depth of 35,000 feet.
Strengthening Transocean's Market Position
The contract with ONGC marks a significant achievement for Transocean. It accentuates the company's stronghold in the ultra-deepwater drilling domain, demonstrating its ability to secure high-profile contracts. This accomplishment not only solidifies Transocean's reputation but also showcases its commitment to delivering exceptional results in offshore drilling operations.
Empowering the Indian Economy
The award of this contract is a positive development for the Indian oil and gas industry. It demonstrates that ONGC is confident about the future of offshore oil and gas exploration in India and is willing to invest in the necessary infrastructure to support this activity. The contract is also set to provide a boost to the Indian economy, as it will create jobs and generate revenues for the country.
Boosting Transocean's Backlog
As of Jun 30, 2023, Transocean's backlog stands at an impressive $3.9 billion. This backlog is a critical metric for assessing the company's future revenue potential. The newly secured contract is expected to significantly contribute to this backlog, reflecting Transocean's continued growth trajectory.
A Legacy of Excellence
Transocean is a well-established company with a long history of providing offshore drilling services. It has a strong track record of safety and efficiency, and is well-positioned to capitalize on the growth opportunities in the global offshore drilling market.
Conclusion
This ultra-deepwater drillship contract with ONGC stands as a resounding testament to the company's capabilities, market dominance and commitment to excellence. The contract not only bolsters Transocean's portfolio but also reverberates positively throughout the Indian economy. It serves as a symbol of hope, progress, and a promising future for the offshore oil and gas industry in India. As Transocean and ONGC join forces, the stage is set for a new era of innovation and collaboration in the energy sector.
Zacks Rank and Key Picks
Currently, RIG carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, sporting a Zacks Rank #1 (Strong Buy), and Evolution Petroleum EPM and Archrock AROC, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy (CVI) is valued at around $3.26 billion. In the past year, its shares have risen 0.5%.
CVI currently pays a dividend of $2 per share, or 6.17% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Evolution Petroleum is worth approximately $281.12 million. EPM currently pays a dividend of 48 cents per share, or 5.68% on an annual basis.
The company currently has a forward P/E ratio of 7.82. In comparison, its industry has an average forward P/E of 16.9, which means EPM is trading at a discount to the group.
Archrock is valued at around $2 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 4.86%.
Archrock provides natural gas contract compression services and aftermarket services of compression equipment.
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Today, See These 5 Potential Home Runs >>Transocean Ltd. (RIG) : Free Stock Analysis Report
CVR Energy Inc. (CVI) : Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report
Archrock, Inc. (AROC) : Free Stock Analysis Report
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