McDermott to Construct GoM Platform - Analyst Blog

Energy-focused engineering and construction firm McDermott International (MDR) announced that one of its units has received a subsea infrastructure contract from Norway's Arena Offshore LP. The transaction, whose value was not disclosed, calls for McDermott to build and install a platform for Arena's ‘Riker' prospect in 275 feet of water on Eugene Island Block 338 in the Gulf of Mexico ("GoM").

The contract, which will be supported by McDermott's Morgan City fabrication facility, encompasses the construction, assembly, testing, coating, load out and tie down of a four-pile jacket for a bottom-founded platform named EI 338 K. The jacket – which will be designed to contain 20 well slots – will accommodate full processing capabilities and support a self-contained drilling rig, after completion.

The jacket and piles are likely to weigh about 3,600 tons, while designed production capacity of the EI 338 K platform will be 20 million cubic feet of gas per day, 7500 barrels of oil per day and 12,500 barrels of water per day.

The Texas-based engineering-to-project management service provider is due to commence engineering work during the third quarter of 2011, with offshore installation work scheduled for the second quarter of 2012.

McDermott, which currently retains a Zacks #3 Rank (short-term Hold rating), primarily serves the worldwide offshore oil and gas field developments, including the front-end design and detailed engineering, fabrication and installation of offshore drilling and production facilities, as well as installation of marine pipelines and subsea production systems.

Additionally, the company provides project management and procurement services. It operates in most major offshore oil and gas producing regions, including the U.S., Mexico, Canada, the Middle East, India, the Caspian Sea and Asia Pacific.

In August 2010, McDermott completed the spin-off of its ‘Power Generation Systems' and ‘Government Operations' segments into a separate, independent and publicly traded company The Babcock & Wilcox Co. (BWC).