SLB JV Secures Major Contract for Troll Phase 3 Project

Zacks Equity Research

29 May 2024 at 12:02 pm·3-min read

SLB OneSubsea, a collaboration between SLB SLB, Aker Solutions and Subsea7, has been awarded a significant contract by Equinor ASA EQNR for the second stage of Phase 3 of the North Sea Troll project.

The joint venture, headquartered in Oslo and Houston, continues to strengthen its position as a key supplier to Equinor.

The Troll field, located in the northern North Sea, is undergoing an expansion, with an eight-well project tied back to the Troll A Condeep platform. The latest contract from Equinor builds on a collaborative frame agreement established in 2017, highlighting SLB OneSubsea's role in the project.

The scope of the contract includes the provision of nine standard NCS2017+ vertical trees, wellheads, tubing hangers, subsea control modules and other essential equipment. Additionally, it encompasses topside control integration and two umbilicals.

The contract follows a substantial $1.13-billion investment by Equinor and its partners to enhance the Troll gas field’s infrastructure. The upgrade is expected to expedite the production of approximately 55 billion standard cubic meters of gas, with a peak annual output projected to reach seven billion cubic meters.

Equinor operates the Troll field with a 30.58% ownership interest. SLB OneSubsea expressed its appreciation for the long-standing relationship with Equinor, emphasizing the importance of the frame agreement in fostering joint value creation and supporting transparency, teamwork and collaborative solutions to maximize value from NCS projects.

In related news, SLB OneSubsea and Subsea7 recently secured an integrated engineering, procurement, construction and installation contract from OKEA ASA for the development of the Bestla project in the North Sea. SLB OneSubsea will deliver the subsea production system, which includes two subsea trees, a two-slot template, an umbilical and a control system, whereas Subsea7 will handle the installation of the subsea production system, design and installation of the flowline systems, spools, protection measures and rock installation.

This series of contracts underlines SLB OneSubsea's strategic importance in the North Sea region and its ability to deliver comprehensive solutions for major offshore projects.

Zacks Rank & Key Picks

Currently, SLB carries a Zack Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company SM and Marathon Petroleum Corporation MPC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy is set to expand its oil-centered operations in the coming years with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments can create long-term value for shareholders.

The Zacks Consensus Estimate for SM’s 2024 and 2025 earnings per share (EPS) is pegged at $6.63 and $7.46. The company has a Zacks Style Score of A for Value, and B for Growth and Momentum. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Marathon Petroleum's acquisition of Andeavor has expanded its foothold in the Permian Basin, creating an enviable retail and marketing portfolio. MPC’s emphasis on operational excellence, safety and environmental responsibility, coupled with investments in low-carbon initiatives, positions it well for sustainable growth and continued value creation for shareholders.

The Zacks Consensus Estimate for MPC’s 2024 and 2025 EPS is pegged at $19.28 and $16.78. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.

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