PXP Plains Exploration & Production Company

Oil drilling equipment maker  FMC Technologies Inc. (FTI) inked a deal with Anadarko Petroleum Corporation (APC), whereby it will render subsea systems and life-of-field services to the latter. None of the parties disclosed the financial terms of the agreement.

The Woodlands-based exploration and production company Anadarko will utilize the services for the development of the Lucius project in the Gulf of Mexico. The field is located in water depth of approximately 7,100 feet and about 275 miles to the southeast of Galveston in Keathley Canyon Block 875.

Discovered in 2009, Lucius field is operated by Anadarko with a 35% interest. The co-partners in the project are Plains Exploration & Production Company (PXP) (23.3%), Exxon Mobil Corporation (XOM) (15%), Apache Deepwater LLC, a subsidiary of Apache Corporation (APA) (11.7%), Petrobras (PBR) (9.6%) and Eni Petroleum, a unit of Eni SpA (E) (5.4%).

Per the agreement, FMC Technologies will supply five subsea production trees and two manifolds. Equipment will be supplied from FMC’s Houston operations and deliveries are slated to start in the fourth quarter of 2012.  

FMC Technologies remains upbeat regarding this collaboration with Anadarko and believes that the company will be able to extend its support to the various oil and gas fields with its highly advanced equipment and services.

Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry and operates 25 manufacturing facilities in 15 countries.

FMC Technologies exhibits a diversified product portfolio, specialty service capabilities and proprietary technological expertise. Other positives for the company include a strong backlog position, expanding international operations and a favorable outlook for subsea activity levels.

However, the uncertain commodity price outlook and a soft global economy continue to weigh on the company. As such, we expect FMC Technologies’ growth potential to be restrained and see limited upside from the current level. Hence, we maintain a long-term Neutral recommendation on the stock.

 
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