Oil giant BP plc (ADR) (NYSE:BP)’s share price moved up 0.3% as investors cheered the announcement of contract extension for jackup Maersk Reacher by two years from Sep 2014 to Sep 2016.
The value of the extended contract is $222 million with a dayrate of about $300,000 per day. Moreover, BP plc (ADR) (NYSE:BP) has options to further extend the contract by up to an additional four years until Sep 2020.
A 350-foot rig capable of drilling to a maximum total drilling depth of about 30,000 feet – Maersk Reacher – can accommodate a crew of 120. Delivered in 2009, the rig was built at the Keppel FELS shipyard in Singapore on a MSC CJ 50-X100 design template. The rig signifies the fourth to be delivered between 2008 and 2009 in a series of four high efficiency jackups.
The rig was restored to conform to requirements in Norwegian shelf regulation in Mar 2011. Thereafter, it received an Acknowledgement of Compliance which allowed it to enter a three-year firm contract with BP Norway in Sep 2011.
During 2013, BP plc (ADR) (NYSE:BP) plans to drill 15–20 exploration wells, up from 9 in 2012. The company has already completed 4 wells in Brazil, North Sea and India, with 11 more exploration wells underway in the GoM, Brazil, Angola, Egypt, Jordan, India and Indonesia.
BP is one of the world’s largest energy companies. Previously, the company used to report earnings through three segments: Exploration and Production, Refining and Marketing, and Other Businesses and Corporate.
BP plc (ADR) (NYSE:BP) carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include Harvest Natural Resources, Inc. (NYSE:HNR), Transocean LTD (NYSE:RIG) and Tesco Corporation (USA) (NASDAQ:TESO). Both these stocks hold a Zacks Rank #1 (Strong Buy).
Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.