A wholly-owned subsidiary of Dril-Quip, Inc. (DRQ) has earned a contract worth approximately $39 million from Murphy Sabah Oil Company, Ltd. Under the term of the contract, Dril-Quip’s subsidiary, Dril-Quip Asia Pacific PTE Ltd. will deliver drilling and production equipment to the Kikeh Dry Tree Spar Platform, located offshore Malaysia in approximately 1,330 meters of water.
Dril-Quip will supply a drilling riser, top tensioned production risers, tensioners, tieback connectors, specialty joints, surface wellheads and production trees to the Malaysian platform. The delivery of these systems is scheduled to begin in 2012.
Kikeh field, discovered in July 2002, was the first deepwater oil field to achieve production offshore Malaysia. Located in Block K offshore Malaysia, Kikeh has a water depth of 4,425 feet. The field commenced production in August 2007.
According to Murphy estimates, it contains 400 million to 700 million recoverable barrels of oil equivalent. Murphy Sabah Oil enjoys the operatorship of the field with an 80% interest, while its partner Petronas holds the remaining 20%.
Dril-Quip, Inc. manufactures highly engineered offshore drilling and production equipment for deepwater severe-service applications and harsh environmental conditions. The company’s products are used by major integrated, large independent and foreign national oil and gas companies in offshore areas throughout the world.
For the short term, Dril-Quip has a Zacks #3 Rank, which is equivalent to a Hold rating. We are also Neutral on the stock over the long term. Diamond Offshore Drilling, Inc. (DO) and Schlumberger Limited (SLB) are major companies competing with Dril-Quip.
