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McDermott International

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McDermott International, Inc.
Company typePublic
IndustryOil and gas
Founded1923; 101 years ago (1923)
FounderRalph Thomas McDermott
HeadquartersHouston, Texas, U.S.
Key people
  • Gary P. Luquette (chairman of the board)
  • David Dickson (president & CEO)
  • Chris Krummel (executive VP & CFO)
RevenueIncrease US$ 6.71 billion (2018)
Decrease US$ 109.0 million (2018)
Decrease -US$ 2.69 billion (2018)
Total assetsIncrease US$ 9.44 billion (2018)
Total equityDecrease US$ 1.05 billion (2018)
Number of employees
~70,000 (2020)
WebsiteMcDermott.com
Footnotes / references
[1]

McDermott International, Inc. is a Panamanian-domiciled multinational engineering, procurement, construction and installation company with operations in the Americas, Middle East, the Caspian Sea and the Pacific Rim.[2][3] Incorporated in Panama,[4] it is headquartered in the Energy Corridor area of Houston, Texas.[5][6]

History

1923–2000

In 1923, Ralph Thomas McDermott established J. Ray McDermott & Company Incorporated at the age of 24 upon receipt of a contract to build 50 wooden drilling rigs for a wildcatter in Luling, Texas. Knowing he could benefit from his father's long-time experience in the lumber and oilfield construction businesses, Ralph made John Raymond McDermott a partner and the company's namesake.

In 1930, it expanded the business from its original headquarters in Eastland, Texas, to Luling after a boom in oil exploration in the area. In 1932, the company moved to Houston, Texas with the continuing oil boom. It provided different services to the oil industry through three McDermott family-owned businesses: J. Ray McDermott & Co., Elmax Construction, and Stall & McDermott.

1937 saw the hiring of the company's first construction crew, a team of six. The company opened a New Orleans, Louisiana office. In 1938, the company introduced the first use of floating drilling equipment in low-lying marshlands of Texas and Louisiana. The following year, it purchased J.G. McMullen Dredging Company and established it as the Olsen Dredging Company.

In 1946, the company reorganized the multiple McDermott family business operations into one: J. Ray McDermott & Co., Inc. of Delaware. The following year, the company designed and installed the first fixed platform made of steel out-of-sight-of-land, in 20 feet of water in the Gulf of Mexico for Superior Oil. It also established a contracting division, which was the major operating segment during the early years.

In 1948, it acquired assets of Harry F. Allsman Company, McDermott's joint venture partner for several contracting jobs in the Gulf of Mexico, which provided equipment to meet the new demand for offshore construction. In 1949, the company was commissioned the construction of the first vessel designed specifically for offshore work (Derrick Barge 4). The company's Oil Division was also organized.

Restructuring

In 2010, McDermott International share-holders agreed to spin off the U.S.-based government contracting services company Babcock & Wilcox and its related other domestic companies. The oil & gas services company, J. Ray McDermott, discontinued use of the J. Ray McDermott brand; and continued its oil & gas services contracting under the name McDermott International. The company is led by Chairman, President, and CEO David Dickson.[7]

2017–2018

On December 18, 2017, CB&I and McDermott agreed to combine and form a fully vertically integrated onshore-offshore company.[8] The merger was approved in May 2018.[9] In March 2018, the company announced that it had new business with Baker Hughes and BP, with David Dickson still CEO.[10] CB&I's stock ceased being listed on the NYSE on May 11, 2018. Gary P. Luquette was the chairman of the combined company.[11] In May 2018 the company became a member of the S&P MidCap 400, replacing Diebold Nixdorf.[12]

In August 2018, McDermott signed a contract with Shell to work on the Perdido development in the Gulf of Mexico.[13] Also that month, the company was sued by TechnipFMC over allegedly stolen trade secrets.[14]

Post combination

After the combination, McDermott discovered their due diligence fell short and realized new losses. Losses were widespread. LNG projects in Hackberry, LA & Freeport, TX had losses in the billions. Losses in Power were in the hundreds of millions. McDermott faced a PR nightmare when stock prices fell. Executive Management tried to sell assets with no success. A portion of Pipe Fabrication was sold at a loss. CB&I legacy Tanks division did not sell for an acceptable price. Lummus Technology is currently for sale.

Cashflow issues ensued. Account payable Invoices were not paid. The construction of the new McDermott headquarters at Energy Center 5 was halted due to non-payment.[15] In efforts to keep the operation functioning, McDermott secured a $1.7B credit deal. This deal carries super senior credit terms that are structured with the 'kind of terms they would receive if they were to convert their debt to a debtor-in-possession loan in bankruptcy." [16]

McDermott released their 2019-Q3 earnings with no earnings call. They posted a $1.9B loss.[17]

2020 bankruptcy

On January 21, 2020, McDermott announced that it had filed for Chapter 11 bankruptcy, cancelling all shares of common stock.[18]

The bankruptcy case was filed as prepackaged restructuring in the United States District Court for the Southern District of Texas and includes the parent company, McDermott International, Inc. and 247 affiliated companies. The primary case is identified as case number 20-30336. [19]

In June, 2020, McDermott was released from Chapter 11 bankruptcy.[20]

Marine fleet

As of 2018, the company had a number of marine vessels.[21]

  • Amazon (leased not owned)
  • Derrick Barge 27
  • Derrick Barge 30
  • Derrick Barge 32
  • Derrick Barge 50
  • Derrick Lay Vessel 2000
  • Emerald Sea
  • Intermac 650
  • Lay Vessel 108
  • Lay Vessel North Ocean 105
  • North Ocean 102
  • Thebaud Sea

References

  1. ^ "US SEC: Form 10-K McDermott International, Inc". U.S. Securities and Exchange Commission. Retrieved 70,000 14, 2020. {{cite web}}: Check date values in: |accessdate= (help)
  2. ^ "Offshore Oil & Gas Construction". McDermott International, Inc. Archived from the original on September 3, 2009. Retrieved September 5, 2009.
  3. ^ "COMPANY PROFILE". J. Ray McDermott. June 30, 2008. Archived from the original on August 6, 2001. Retrieved September 5, 2009.
  4. ^ "J. Ray. McDermott, Inc". BusinessWeek. September 4, 2009. Retrieved September 5, 2009.
  5. ^ "Corporate Offices". McDermott International. Retrieved May 18, 2018. 757 N. Eldridge Pkwy. Houston, TX 77079 USA
  6. ^ "2017 Base Map". Energy Corridor. Retrieved May 15, 2018.
  7. ^ "McDermott to Spin-off B&W". World Nuclear News. Retrieved July 10, 2010.
  8. ^ "McDermott Inks $6B Merger Deal With Chicago Bridge & Iron". December 19, 2017.
  9. ^ "McDermott and CB&I Stockholders Approve Proposed Combination". McDermott International. May 2, 2018. Retrieved May 15, 2018.
  10. ^ https://www.forbes.com/sites/clairepoole/2018/03/16/mcdermotts-prospects-improve-with-ma-new-business/#6a77ec1863f8
  11. ^ http://www.mcdermott-investors.com/news/press-release-details/2018/McDermott-Completes-Combination-with-CBI/default.aspx
  12. ^ https://www.prnewswire.com/news-releases/mcdermott-international-set-to-join-sp-midcap-400-diebold-nixdorf-to-join-sp-smallcap-600-300642597.html
  13. ^ https://www.prnewswire.com/news-releases/mcdermott-awarded-subsea-umbilical-and-flowline-installation-contract-by-shell-for-the-silvertip-field-300689218.html
  14. ^ https://www.bizjournals.com/houston/news/2018/08/16/technipfmc-sues-mcdermott-over-allegedly-stolen.html
  15. ^ www.bizjournals.com https://www.bizjournals.com/houston/news/2019/11/07/construction-on-mcdermotts-hq-comes-to-a-halt.html. Retrieved November 13, 2019. {{cite web}}: Missing or empty |title= (help)
  16. ^ McNeely, Allison (November 13, 2019). "McDermott Super-Senior Debt May Be Prelude to a Bankruptcy Loan". www.bloomberg.com. Retrieved November 13, 2019.{{cite web}}: CS1 maint: url-status (link)
  17. ^ Inc, McDermott International. "McDermott Reports Third Quarter 2019 Results". www.prnewswire.com. Retrieved November 13, 2019. {{cite web}}: |last= has generic name (help)
  18. ^ Chapa, Sergio (January 21, 2020). "Houston-based McDermott confirms oilfield service company will file for bankruptcy". The Houston Chronicle. Hearst Corporation. Retrieved January 21, 2020.
  19. ^ "McDermott Bankruptcy Filing Gets Court OK". Engineering News-Record. Retrieved May 10, 2020.
  20. ^ "Houston-based McDermott International exits bankruptcy". www.msn.com. Retrieved July 13, 2020.
  21. ^ "Marine Construction Vessels". Mcdermott.com. Retrieved August 3, 2018.
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