McDermott International (NYSE:MDR) reported today that it has been given a big contract by an upstream oil and gas company for a project in the Middle East. McDermott stock is up nearly 4% in premarket trading. The stock rose by 6.81% yesterday touching a high of $3.85. Around 10.24 million shares were traded.
Vice-president of Middle East Area for McDermott, Linh Austin, said that the Middle East market is a priority for the company. He added that the company is happy with its customers’ faith in its capabilities in doing off-shore EPCI (Engineering, Procurement, Construction, Installation) projects. He also said that the nature of the current project was suited to the company’s various capabilities in engineering, procurement as well as project management.
The work involves procurement, engineering, fabrications, transportation as well as installation of offshore pipelines. Offshore mobilization and engineering of McDermott’s in-house containers has begun for this fast track project. The project is anticipated to be completed by the end of 2016.
The contract award will be included in McDermott’s first quarter report this year.
McDermott is one of the more prominent global energy services organizations. McDermott’s subsidiaries build environmental equipment, steam generating equipment as well as products for the US government. They also offer construction and as engineering services for utility industrial and hydrocarbon processing units and to the offshore oil and natural gas sector.
For the financial year 2016 the company expects revenue to be around $2.9 billion and Adjusted EBITDA to be $240 million. The company expects the restructuring expense to be $10 million in FY2016 due to MPI actions and the AOR program. The free cash flow projection for the year is at negative $160 million. McDermott holds more than 80% of expected revenue for 2016 in backlog.