Zacks_Analysts' Blog : Cameron Lands Jette Subsea Contract - Analyst Blog

Oil drilling equipment maker Cameron International Corp. (CAM) announced a $56 million contract from Norwegian oil company Det Norske Oljeselskap ASA to supply future subsea technology solutions for its oil and gas projects in the North Sea.

Cameron said that the deal – representing its first full subsea system supply in the Norwegian sector of the North Sea – includes the development of wellheads, trees, flow bases, electro-hydraulic multiplexed controls, connections, pipeline end manifolds and other associated subsea equipment. The company expects delivery to begin in early 2012.

The Cameron-supplied subsea production systems will aid the fast track development of the Jette field located in blocks 25/7 and 25/8 offshore Norway. Det Norske is aiming for the project to come online during the first quarter of 2013. The Jette field – Det Norske’s first development as operator – is estimated to contain about 14 million recoverable oil equivalent barrels with production during the first year targeted at 14,000 barrels per day.

Houston, Texas-based Cameron is a leading manufacturer of pressure control equipment used in onshore, offshore, and subsea applications for oil and gas drilling, production, and transmission. The company operates under two main segments: Drilling & Production Systems (DPS), Valves & Measurement (V&M) and Process & Compression Systems (PCS).

Cameron, which competes with FMC Technologies Inc. (FTI) and National-Oilwell Varco (NOV) in the ‘Oilfield Machineries and Equipment’ sector, currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.

We believe Cameron is well positioned going forward given its dominant market share, technology leadership, efficient execution skills and backlog of more than $5.5 billion. The increase in North American drilling activity, along with potential opportunities from the industry complying with new pressure control equipment rules, has added to this bullish sentiment. Furthermore, we believe that Cameron is poised to benefit from the improving subsea activity levels through 2011.