Rig contract cheers Lamprell

08/11/2011 Robert Tyerman

Oil and gas engineering specialist Lamprell (LAM) has won a mobile offshore drilling platform order from Singapore worth a rumoured £100 million.

The fully-listed company has not revealed the financial details but says the contract, with the Singapore arm of India's Jindal Pipes concern, is for a fully outfitted and equiped self-elevating mobile offshore platform, designed by the American Le Tourneau group in the Super 116E (Enhanced) Class.

Lamprell, which will build the jack-up rig at Hamriyah in the United Arab Emirates, says it is designed to operate in water depths of up to 350 feet, with a drilling depth of 30,000 feet. Chief executive officer Nigel McCue argues the Jindal order underlines the strength of the market for jack-up rigs and Lamprell's strong position in it.

This contract comes hard on the heels of two orders worth a combined £125 million placed with the company by Canada's Nexen Petroleum. It augurs well for Lamprell, which made operating oprofits of £13.3 million in the first half of this year on turnover doubled to £240 million.

Lamprell's shares have been voatile of late. Growth Company Investor highlighted them at 266.6p in August 2010 before suggesting partial profit taking last May at 366.5p.

After falling to 220.7p, they have now rallied to 252p, up 11.9p this morning, valuing the company at £656 million and yielding nearly 2 per cent. They could rally further with more orders like this one.

Tags: Full list, Jindal Pipes, Mobile drilling platform order, Nigel McCue, Singapore

Sector: Oil Equipment, Services & Distribution

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