Ensco's (ESV) Drillship Receives Contract From Noble Energy

Ensco plc’s (NYSE:ESV) ultra-deepwater drillship, ENSCO DS-7, has been contracted by Noble Energy (NYSE:NBL) to drill two wells and complete four production wells at the Leviathan field development in the Mediterranean Sea.

The contract, which is expected to begin in March 2018, will be completed in December 2018 and comprises four one-well priced customer options. These options, when fully exercised, would extend the contract till 2020.

A second blowout preventer will be attached to ENSCO DS-7. This development, combined with the rig’s dual derricks and other technical specifications, will make it one of the most competent assets in the global fleet. As announced earlier, this upgrade is estimated to cost below $10 million since it will use a blowout preventer currently in inventory. On completion of the upgrade, ENSCO DS-7 will be transferred to the Mediterranean Sea to commence its contract with Noble Energy.

The latest contract represents the fourth drillship contract during the third quarter for the company. This emphasizes the company’s commitment towards fleet upgradation, which in turn boosts contracted revenue backlog and leads to value creation for the shareholders.

Ensco is a leading supplier of offshore contract drilling services to the oil and gas industry. As per the recent fleet status, the company has eight drillships, 13 semisubmersible rigs and 39 jackup rigs. Ensco is among the most geographically diverse offshore drilling companies, with current operations and drilling contracts spanning approximately 15 countries on six continents in nearly every major offshore basin around the world.

Ensco's shares have lost 41.9% over the last three months, substantially underperforming the 29.2% decline of the industry it belongs to.

Ensco currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Range Resources Corp. (NYSE:RRC) , Braskem S.A. (NYSE:BAK) and TransCanada Corp. (TO:TRP) . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Range Resources delivered a positive earnings surprise of 250.00% in the preceding quarter. The company beat estimates in three of the trailing four quarters with an average negative earnings surprise of 94.22%.

Braskem delivered a positive earnings surprise of 107.79% in the quarter ending September 2016.

TransCanada delivered a positive earnings surprise of 12.00% in the preceding quarter. It surpassed estimates in two of the trailing four quarters with an average positive earnings surprise of 4.06%.

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