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Oceaneering Gets Contract from Hess for Stampede Project - Analyst Blog

Oilfield services provider Oceaneering International Inc. (OII) announced receipt of a contract, last month, from integrated energy firm, Hess Corporation (HES). Per the deal, Oceaneering would provide umbilicals and umbilical distribution hardware for Hess’ Stampede Project, in the Gulf of Mexico.

The umbilicals would be used to transport control fluids and chemicals, and electrical power signals to control and supervise subsea wells and manifolds.

Oceaneering would provide electro-hydraulic, steel tube umbilicals, umbilical termination assemblies, hydraulic and chemical distribution units, electrical distribution units, flying leads, and junction plates. The company plans to build the umbilicals at its Panama City plant and the distribution hardware at its Houston facility.

Production of these umbilicals is likely to begin in the second quarter of 2015, while delivery is expected around mid-2016.

Oceaneering International provides engineered services and products to oil and natural gas offshore players. The company boasts of strong earnings results. It has surpassed the Zacks Consensus Estimate in the trailing four quarters and has an average positive surprise of 2.76%.

The company is expected to announce its fourth-quarter results on Feb 11, 2014. It is anticipated to report earnings of 99 cents, higher than the year-ago quarter reported data of 86 cents.  

However, the current weakness in the oilfield services industry amid low commodity prices could have a negative impact on the earnings. Recently, Goldman Sachs (GS) lowered price target for Oceaneering as lower rig counts are likely to impact the company’s Remotely Operated Vehicles business.

Currently, Oceaneering carries a Zacks Rank #4 (Sell).

A better-ranked player from the same industry, Exterran Holdings, Inc. (EXH), sports a Zacks Rank #1 (Strong Buy).

 


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HESS CORP (HES): Free Stock Analysis Report
 
OCEANEERING INT (OII): Free Stock Analysis Report
 
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EXTERRAN HLDGS (EXH): Free Stock Analysis Report
 
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