16 December 2009
As a result of our success in securing new contracts during the year and the continued good progress across most of our businesses, the Board is confident that, in the absence of unforeseen circumstances, the group will deliver profit after tax for the year of at least US$330 million, which represents year-on-year growth of around 25%.
In Engineering & Construction, our strong partnerships, proven execution track record and long-established presence in the Middle East and North African markets has helped us achieve a record order intake during the year of over US$6.0 billion. Initial progress on these new awards has been in line with our expectations and we have continued to deliver good operational performance across our broader portfolio of projects. We have a healthy pipeline of bidding prospects for 2010.
As anticipated earlier in the year, we have seen an increase in tendering activity in Offshore Engineering & Operations and we have been successful in securing a number of new contract awards and extensions, including two significant contract wins in the UK North Sea with BP and Apache. We are currently actively bidding work in both the UK and internationally.
In Engineering, Training Services and Production Solutions, activity levels throughout the year have generally been subdued, although we are anticipating a modest improvement as we move into 2010. On our contract with Dubai Petroleum, within Production Solutions, we have delivered a particularly good operational performance.
In Energy Developments, we expect 2009 total production for the Don fields to be around 3 million barrels. We remain on schedule to commission the permanent export route over the Thistle platform and to recommence production from the second production well and to start up water injection in Don Southwest in the early part of 2010. With a second phase drilling programme scheduled to commence during the second quarter, production rates are expected to rise through the year from around 15,000 barrels per day (bpd) towards a peak of around 30,000 bpd. Our other interests also continue to perform well.
The group’s backlog is expected to be approximately US$7.8 billion at the end of the year (31 December 2008: US$4.0 billion) comprising approximately US$6.2 billion from Engineering & Construction (31 December 2008: US$2.4 billion) and approximately US$1.6 billion across the other business units (31 December 2008: US$1.6 billion).
With strong cash generation through the year, including the receipt of advances from customers on new Engineering & Construction projects, the group expects its gross cash balances at 31 December 2009 to be around US$1.2 billion (2008: US$0.7 billion).
Ayman Asfari, group chief executive of Petrofac, commented:
“In a year that has been very challenging for the oil and gas service industry we are delighted with our performance and the record revenue and profits we expect to deliver.
“During 2009 our differentiated and competitive offering has helped us secure more than US$6 billion of new contracts in the Middle East, North Africa and, most recently, in the UK North Sea and the high level of backlog we are now carrying gives us excellent revenue visibility for next year and beyond. Our strong performance has enabled us to continue to invest in the business both in terms of systems but, most importantly, in our people and I am pleased that we have been able to attract further high calibre personnel to Petrofac. We look forward to the coming year with considerable confidence.”