TIDMPFC
RNS Number : 7416T
Petrofac Limited
18 December 2012
Press Release
18 December 2012
PETROFAC LIMITED
TRADING UPDATE
SUMMARY
-- Expect to deliver net profit growth in 2012 of at least 15%
-- Operations continue to perform in line with expectations
-- On the basis of awards announced to date, Group backlog(1)
expected to be approximately US$11.6 billion at 31 December 2012
(31 December 2011: US$10.8 billion)
Ayman Asfari, Group Chief Executive, commented:
"We have delivered another year of good growth, with our 2012
full year net profit expected to be at least 15% higher than in
2011.
"In our Engineering, Construction, Operations & Maintenance
(ECOM) division, we continue to deliver very good operational
performance. Despite a number of bidding processes extending into
next year, we have secured an order intake in the year to date of
US$5.3 billion(2) , with major project awards in Saudi Arabia,
Iraq, Kuwait and the UK. We continue to experience high levels of
bidding activity and we see a strong pipeline of bidding
opportunities for 2013.
"We have made good progress in our Integrated Energy Services
(IES) division in the year to date, securing two further production
enhancement contracts in Mexico, including our first in conjunction
with Schlumberger, and agreeing a strategic alliance agreement with
Bowleven to develop the Etinde Permit in Cameroon. These new
awards, together with the achievement of significant milestones on
our other IES projects, are helping to build long-term sustainable
earnings for the Group.
"Overall, we are well positioned to grow next year and beyond
and we are confident of achieving our target of more than doubling
our recurring 2010 Group earnings by 2015."
Engineering, Construction, Operations & Maintenance
(ECOM)
Onshore Engineering & Construction
We have made good progress across our portfolio of projects
during the year to date, including on our major projects in Abu
Dhabi, Turkmenistan and Algeria. Notwithstanding that we have seen
some slippage in the timing of certain contract tender processes
during the year and the delay in the award of some projects from
2012 to 2013, backlog has increased over the second half of the
year, with year-end backlog, based on contracts signed to date,
expected to be approximately US$5.0 billion (30 June 2012: US$4.6
billion; 31 December 2011: US$6.4 billion). Given our competitive
positioning and a strong pipeline of bidding opportunities,
particularly in the Middle East, North Africa and the Commonwealth
of Independent States, we anticipate growth in our Onshore
Engineering & Construction backlog during 2013.
Offshore Projects & Operations
Offshore Projects & Operations (OPO) continues to perform
well on its portfolio of operations support contracts and offshore
capital projects. OPO has secured a number of contract wins and
extensions during the year to date, with order intake totalling
US$2.1 billion. New wins during the year include onshore
maintenance and offshore operations and maintenance projects in
Iraq for BP and South Oil Company (SOC), respectively, a three-year
contract to provide onshore engineering and both onshore and
offshore construction services to all of Apache's UK North Sea
assets and the Bekok-C platform refurbishment contract for PETRONAS
in Malaysia. We continue to see high levels of bidding activity on
both operations support contracts and offshore capital projects in
the UK/Europe, the Middle East and Africa, the CIS and the Asia
Pacific regions.
Engineering & Consulting Services
We were awarded a number of front-end engineering and design
(FEED) and conceptual studies for external customers during the
year, which has led to increased activity levels. In December,
Engineering & Consulting Services was awarded a three-year
contract in Algeria, by JV Gas, a joint venture comprising
Sonatrach, BP and Statoil, to provide a range of multi-discipline
consultancy, design and procurement services. These activities will
support JV Gas' development programme to augment hydrocarbon
production on both the In Salah and In Amenas assets.
Integrated Energy Services (IES)
In November 2012, we announced a strategic alliance agreement
with Bowleven to develop the Etinde Permit in Cameroon. Subject to
an agreed Field Development Plan and satisfaction of certain other
conditions, including co-venturer and government approvals, the
strategic alliance's risk service arrangements envisage that
Petrofac will subsequently execute the planned development through
the provision of project management, engineering, procurement and
construction services.
During the year, we also secured the Pánuco and Arenque
production enhancement contracts in Mexico, which each run for 30
years. We are making good progress with our transition activities
on the Pánuco contract area in Mexico and we expect to commence
field operations, jointly with Schlumberger, in January 2013. Field
operations on the Arenque offshore contract are expected to
commence around the end of Q1 2013. We commenced field operations
on the Magallanes and Santuario production enhancement contracts in
February 2012, and we now have three drilling rigs and two workover
rigs active on the blocks. The drilling programme on the Ticleni
production enhancement contract for Petrom in Romania is
progressing with two rigs operational in the field with additional
activity focusing on sidetracks and well workovers.
In Malaysia, we achieved a key milestone on the Berantai risk
service contract in October, with the commencement of processing
and export of gas. On Block PM304, the upgraded West Desaru Mobile
Offshore Production Unit (MOPU) (formerly the Ocean Legend) has
recently sailed from the conversion yard. The West Desaru conductor
support structure is presently being constructed, and the MOPU will
arrive on location early in the New Year. Also on Block PM304, we
have made significant progress on the second phase of Cendor, with
installation of all in-field facilities and good progress made on
the floating, production, storage and offloading (FPSO) vessel. In
Tunisia, we have drilled two additional production wells during the
year, which are expected to extend the production plateau.
Financial position
Based on contracts signed to date, Group backlog is expected to
be US$11.6 billion at 31 December 2012 (31 December 2011: US$10.8
billion), comprising US$8.6 billion from ECOM (31 December 2011:
US$9.2 billion), which includes US$5.0 billion from Onshore
Engineering & Construction (31 December 2011: US$6.4 billion)
and US$3.4 billion from Offshore Projects & Operations (31
December 2011: US$2.7 billion), and US$3.0 billion from IES (31
December 2011: US$1.6 billion). Net cash balances were US$0.2
billion at 30 November 2012 (31 December 2011: US$1.5 billion), due
to the unwinding of cash advances on Onshore Engineering &
Construction projects and the deployment of cash on IES
projects.
Notes
(1) Backlog consists of the estimated revenue attributable to
the uncompleted portion of lump-sum engineering, procurement and
construction contracts and variation orders plus, with regard to
engineering, operations, maintenance and Integrated Energy Services
contracts, the estimated revenue attributable to the lesser of the
remaining term of the contract and five years. Backlog will not be
booked on Integrated Energy Services contracts where the Group has
entitlement to reserves. The Group uses this key performance
indicator as a measure of the visibility of future revenue. Backlog
is not an audited measure.
(2) Order intake comprises new contracts awarded, growth in
scope of existing contracts and the rolling increment attributable
to contracts which extend beyond five years. Order intake is not an
audited measure.
Ends
Conference call
A telephone conference call for analysts and investors will be
held at 9am today (please contact Tulchan Communications for
details).
For further information contact:
Petrofac Limited +44 (0) 20 7811 4900
Jonathan Low, Head of Investor Relations
Jonathan Edwards, Investor Relations Officer
Tulchan Communications Group Ltd +44 (0) 20 7353 4200
Stephen Malthouse
Martin Robinson
petrofac@tulchangroup.com
Notes to Editors
Petrofac
Petrofac is a leading international service provider to the oil
& gas production and processing industry, with a diverse
customer portfolio including many of the world's leading
integrated, independent and national oil & gas companies.
Petrofac is quoted on the London Stock Exchange (symbol: PFC).
Petrofac designs and builds oil & gas facilities; operates,
maintains and manages facilities and trains personnel; enhances
production; and, where it can leverage its service capability,
develops and co-invests in upstream and infrastructure projects.
Petrofac's range of services meets its customers' needs across the
full life cycle of oil & gas assets.
With around 18,200 employees, Petrofac operates out of seven
strategically located operational centres, in Aberdeen, Sharjah,
Abu Dhabi, Woking, Chennai, Mumbai and Kuala Lumpur and has a
further 24 offices worldwide.
For additional information, please refer to the Petrofac website
at www.petrofac.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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