Member Info for Jarv55

Games will be played to try and let the shorts out

Inflation falling and interest rates will be going down all helps

More contracts incoming as well

Following E&C’s strongest order intake in many years, it has good visibility of future revenue and profit growth. Guidance will be provided with the Group’s annual results, as usual.

Operationally, the initial phases of the new contracts secured in 2023 are progressing well. We previously guided that five of the remaining eight legacy contracts were expected to be completed or substantially completed(4) during 2023 or early 2024. Progress remains on track, with two reaching that milestone in 2023 and the remaining three expected to follow in early 2024.

Second contract award under the six-project, US$14 billion, multi-year Framework Agreement with TenneT Petrofac’s portion of the second contract valued at around US$1.4 billion Award coincides with confirmation that Petrofac has secured the performance guarantee required for the first contract awarded by TenneT in March 2023 Second contract contains similar industry standard requirement for Petrofac to provide a performance guarantee Additional contracts within TenneT’s 2GW Framework Agreement expected at approximately six-month intervals

Petrofac, a leading provider of services to the global energy industry, and Hitachi Energy, a global technology leader that is advancing a sustainable future for all, announce today the award of the second project under the US$14 billion, multi-year Framework Agreement with TenneT – the Dutch-German Transmission System Operator – to expand offshore wind capacity in the North Sea.

The project is to be executed under a standalone contract, with Petrofac’s portion valued at around US$1.4 billion.

Tareq Kawash, Petrofac’s Group Chief Executive, commented:

“Our focus on rebuilding the backlog and unwinding historic working capital has resulted in tangible progress against our organic plan to strengthen the Group’s financial position.

“To further accelerate progress, my near-term priority, and that of our Board and leadership, remains on improving liquidity and materially strengthening the Group’s balance sheet, to deliver on our long-term potential.

“We are completing contracts in the legacy portfolio as planned, we continue to deliver well in the initial phases of the contracts awarded in 2023, and, as a result of excellent order intake, we enter 2024 with a high-quality backlog in both traditional and renewable energy of approximately US$8 billion. This provides us with good revenue visibility and demonstrates the continued confidence customers have in Petrofac’s delivery.”

Main thing is they are within covenant that is why the bonds are rising

More good news https://www.voxmarkets.co.uk/rns/announcement/f37434cf-7cbe-4a5f-9c7a-b8927ce087a5/

Conference call

Tareq Kawash, Group Chief Executive and Afonso Reis e Sousa, Chief Financial Officer, will host a conference call for analysts and investors at 8.30am today.

Analysts and investors can access the call on: +44 (0) 330 551 0200. Password: Quote ‘Petrofac Trading Update’ when prompted by the operator.

Cash flow and net debt(1)

The Group has continued to advance contractual settlements, collecting approximately US$180 million in the year to date. As referenced in the business update on 4 December 2023, due to the delays in securing guarantees, the Group no longer expects to collect advance payments on new contracts before the year-end.

Measures taken by management resulted in positive free cash flow in the second half, even in the absence of advance payment receipts, albeit this was offset by an increase of over US$100 million in collateral for guarantees. As a result, net debt at year-end is expected to be modestly higher than at the interim results (30 June 2023: US$584 million).

The Group has continued to maintain liquidity above its financial covenant.

Way oversold those shorts are going to be in trouble today

Tareq Kawash, Petrofac’s Group Chief Executive, commented:

“Our focus on rebuilding the backlog and unwinding historic working capital has resulted in tangible progress against our organic plan to strengthen the Group’s financial position.

“To further accelerate progress, my near-term priority, and that of our Board and leadership, remains on improving liquidity and materially strengthening the Group’s balance sheet, to deliver on our long-term potential.

“We are completing contracts in the legacy portfolio as planned, we continue to deliver well in the initial phases of the contracts awarded in 2023, and, as a result of excellent order intake, we enter 2024 with a high-quality backlog in both traditional and renewable energy of approximately US$8 billion. This provides us with good revenue visibility and demonstrates the continued confidence customers have in Petrofac’s delivery.”

FINANCIAL AND STRATEGIC UPDATE:

Second contract award under the six-project, US$14 billion, multi-year Framework Agreement with TenneT announced today. Petrofac’s portion of the second contract valued at approximately US$1.4 billion. Performance guarantee secured for the first contract awarded under the Framework Agreement with TenneT. Performance guarantee terms agreed for the first ADNOC Habshan contract – expected to be issued by year end. Active discussions ongoing to secure guarantees required for other new contracts. Net debt(1) expected to be modestly higher than at the interim results, with positive free cash flow generation by the business in the second half offset by an increase in collateral required for guarantees. Near-term focus remains on strengthening the balance sheet with ongoing review of strategic and financial options.

OPERATIONAL PERFORMANCE:

Asset Solutions and IES underlying performance in line with guidance, before a one-off bad debt provision in Asset Solutions of approximately US$12 million. Expect a full year EBIT loss in E&C of approximately US$215 million, including US$110 million one-off write downs in contract settlements to protect cash flows. Good progress in reaching contractual settlements in the second half, with approximately US$180 million collected year-to-date. Completion of remaining legacy E&C contracts progressing in line with guidance. Thai Oil Clean Fuels project progress remains on track, with negotiations ongoing to recover additional committed costs.

BACKLOG AND OUTLOOK:

Exceptional new order intake(2) across both E&C and Asset Solutions, totalling approximately US$6.8 billion in the year-to-date, with Group backlog(3) expected to be approximately US$8.0 billion at the end of the year. Robust business outlook underpinned by strong backlog and a healthy Group pipeline scheduled for award in the next 18 months of US$62 billion, including the remaining projects in the TenneT multi-platform Framework Agreement.

Tareq Kawash, Petrofac’s Group Chief Executive, commented:

“Our focus on rebuilding the backlog and unwinding historic working capital has resulted in tangible progress against our organic plan to strengthen the Group’s financial position.

“To further accelerate progress, my near-term priority, and that of our Board and leadership, remains on improving liquidity and materially strengthening the Group’s balance sheet, to deliver on our long-term potential.

“We are completing contracts in the legacy portfolio as planned, we continue to deliver well in the initial phases of the contracts awarded in 2023, and, as a result of excellent order intake, we enter 2024 with a high-quality backlog in both traditional and renewable energy of approximately US$8 billion. This provides us with good revenue visibility and demonstrates the continued confidence customers have in Petrofac’s delivery.”

Boyo I would image the shorts are hedging at this point

Looks to me like the market is pricing everything in now going to be interesting tomorrow.

Will be interesting tomorrow if they say they are in discussion to sell assets or for someone to take a stake in Pfc

Maybe the market is waiting on numbers or mms are taking the price down to fill orders for the TR1 holder.

The mms really are walking this down amazing seeing as revs could be around $50mill by the end of 24

You missed Arcm off the list who have just done a major deal with Anglo

Will be interesting to see how they fund the other $24mill I think they hvae given away 15% for peanuts unless the government is going to loan them the money and then TG and Boil would benefit.

Big part for me is the government are behind this now cans ee this being fast tracked.

"We are delighted with, and greatly appreciate, TIMOR GAP's decision to increase its participation in the Chuditch PSC through a paying interest. The proposed Farm-Up is a major step forward, as it provides validation of the project as well as bringing in an early funding partner for the appraisal programme. It also reflects the Timor-Leste Government's commitment to the development of the country's petroleum resources and its support for our efforts.

"From here, we will advance our drilling planning for the appraisal well which will include discussions with other potential funding partners. With this proposed Farm-Up, we move a long way forward towards drilling Chuditch-2, whilst retaining operatorship and a majority interest in the PSC."

COP28 wraps up, reinforcing critical role of gas

The attention of the energy world remained focussed on Dubai during the first half of the week, where the annual COP28 Climate Change Conference reached its conclusion.

After some delays in delegates finding agreement on energy-related wording, the final text of the Global Stocktake was a pointer towards a low-carbon future that will see gas and LNG play critical roles in the energy transition.

The final text contains “[Recognition] that transitional fuels can play a role in facilitating the energy transition while ensuring energy security” and a commitment to “accelerating efforts towards the phase-down of unabated coal power.”

It also acknowledges the need to accelerate the development of carbon capture and storage solutions.

As ANGEA CEO Paul Everingham reflected: “Energy transition is a process that will take place over decades and the final text from COP28 should be a signal to gas-producing nations to advance projects that will meet global demand for the 2030s and beyond.”