15 May 2009
Interim Management and AGM Statement
Petrofac, the international oil & gas facilities service provider, is publishing its Interim Management Statement for the period from 1 January 2009 to 15 May 2009, as required by the UK Listing Authority’s Disclosure and Transparency Rules, ahead of its Annual General Meeting today. At the meeting, Chairman, Rodney Chase, will make the following statement:
“I am pleased to report that we have made a good start to the year and we are confident that 2009 will be another year of strong growth.
Our largest business, Engineering & Construction, has been very successful in converting last year’s high level of bidding activity, securing US$5.0 billion of new contract awards in the first quarter of 2009 in Abu Dhabi, Saudi Arabia and Algeria, which gives high revenue visibility through to 2011. Mobilisation activities on these new awards are progressing well with full project management teams now established, many significant subcontracts agreed and early progress made in procuring materials and equipment.
Our Offshore Engineering & Operations, Engineering Services, Training and Production Solutions businesses have performed broadly in line with expectations in the year to date, although, in the current lower oil price environment, we are starting to see some early evidence of customers adjusting their discretionary spending plans.
In Energy Developments, we were delighted to announce last month that we had commenced production from the West Don field in the UK North Sea. This represents a very significant milestone in the development and has been achieved in less than a year from field development programme approval. The productivity of the first production well on West Don has been good and in line with our expectations. Drilling of two production wells in the Don Southwest field has now been completed and production is expected to commence towards the end of this quarter. A second production well and two water injection wells in Don Southwest, and a water injection well in West Don, are expected to be completed and brought on-stream during the second half of the year. Our other producing assets continue to perform well and despite lower average oil prices in the year to date, have made a positive return. We believe our financial and operational strength, combined with a difficult financing environment for some asset developers, should lead to additional investment opportunities.
As a result of our new Engineering & Construction contract awards in the year to date, the group’s backlog at the end of April increased to approximately US$8.2 billion (31 December 2008: US$4.0 billion), comprising approximately US$6.7 billion from the Engineering & Construction business (31 December 2008: US$2.4 billion) and approximately US$1.5 billion across the other business units (31 December 2008: US$1.6 billion). With continued strong cash generation, including the receipt of advances from customers on new Engineering & Construction projects, the group’s financial position has further strengthened from the end of 2008, with gross cash balances now in excess of US$900 million.”