Equinor ASA EQNR, a Norwegian integrated energy firm, has reached an agreement with Odfjell Drilling, an offshore drilling contractor. The agreement specifies that Equinor has extended its contract for Odfjell’s Deepsea Atlantic semi-submersible rig till the second quarter of 2027.
Odfjell Drilling has mentioned that Deepsea Atlantic will continue its drilling operations per the terms of the previous contract signed with Equinor, halfway into the third quarter of 2026. After this period, the semi-submersible rig will continue its operations with Equinor for an additional value of approximately $148 million. The valuation, however, excludes any escalation fees and integrated services. Performance bonuses and fuel incentives are also excluded from the valuation. The initial contract was signed between the two companies in 2023.
The contract also includes options that should enable EQNR to extend its duration beyond the original terms. The contract terms include optional periods for four one-well options. Each period will be priced separately. Moreover, the terms include three additional optional periods, each extending up to nearly one year. The rate for each additional period is anticipated to be discussed between the two companies prior to exercising the options. These optional periods could keep the rig under contract up to 2030, if Equinor exercises its options.
The Deepsea Atlantic semi-submersible rig is a sixth-generation deepwater drillship capable of operating in harsh and challenging conditions. It can operate at a depth of up to 3,000 meters underwater and has a maximum drilling depth of approximately 10,670 meters. The Deepsea Atlantic semi-submersible has been working with Equinor since 2009.
EQNR currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the energy sector are Sunoco LP SUN, Matador Resources MTDR and Cheniere Energy, Inc. LNG. Sunoco currently sports a Zacks Rank #1, while Matador Resources and Cheniere Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.
Matador Resources is a leading U.S.-based exploration and production firm. The company has consistently exceeded production expectations, demonstrating operational efficiency and robust growth. The company’s production efficiency, combined with the favorable oil price environment, is expected to positively impact its bottom line.
Cheniere Energy is involved in LNG-related businesses, which include LNG terminals and natural gas marketing. The company has achieved a milestone with the first production from the first LNG train of its Corpus Christi Stage 3 Liquefaction Project. The project, which includes seven midscale LNG trains, aims to expand the production capacity of the Corpus Christi Liquefaction facility. This expansion is expected to enhance Cheniere's position in the rapidly growing global LNG market, enabling it to meet the rising demand for LNG, both in the United States and internationally.
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