Cameron Nets $600 Million Underwater Order

Cameron will make 7% of a year's revenues on one sale of subsea trees to Petrobras.

By Rich Smith – Mar 13, 2013 at 4:41PM EST

Oil drilling equipment manufacturer Cameron International (CAM +0.00%) has landed a big contract with Brazilian oil giant Petroleo Brasileiro (PBR +2.58%) (NYSE: PBR-A) -- a $600 million contract to supply 47 subsea "trees" and associated equipment. Based on 2012 revenue, this single contact amounts to about 7% of a year's worth of business for Cameron.

Deliveries of the 47 units Cameron is selling are set to begin in 2014.

While the name is poetic, a subsea tree (a.k. a. a "Christmas tree") is actually a more functional piece of equipment. Affixed to an oil wellhead, it regulates the flow of gas and fluids injected into a well to help force oil out. Petrobras will be using its new trees in the Pre-Salt and Post-Salt offshore oil fields of Brazil.

Cameron shares closed Wednesday trading 0.2% after the announcement, ending at $65.59.

Rich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”

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Cameron Nets $600 Million Underwater Order

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