Member Info for Slift

CaptainSwag,

The CPR and the FWP are linked.
The CPR will assess reserves based on FWP. So if there is any delay in CPR it is to be expected if HUR are changing their FWP.

By the sounds of things, CA and possibly even other entities are not happy with the FWP.
No point wasting money on a CPR without a FWP that HUR are going to go through with, imo.

However, if CPR does land with the FWP, then will be too late to change this.
As far as I know, their FWP consists of a sidetrack and a water injector. Now will they go through with this or change it altogether (for the better)?

If they don't change the FWP, then the whole thing about "requiring more planning for drills" is bs. They simply missed the window for rigs.

wildtiger,

I don't believe they will pay dividends. They were really banking on the UAE ADNOC awards this year. They tendered for huge projects which hasn't come through.

They can't afford to pay the dividends. But let's see what 2021 brings.

"7+£ in 3-5 years"

It's not impossible. It all depends on a great backlog, a great pipeline of work, and some decent margins for the work.
The projects with high margins are typically huge O&G projects (excess of $1b+).

The impact of underinvestment in Oil and Gas by producing companies over the past few years can be seen today. Majority of the oil and gas producers have declining production and sooner or later, when demand does return - the price of oil will stabilise which would support the producing companies to spend their CAPEX.

This provides a great opportunity for petrofac (ofcourse assuming that they can tender for these projects..).
But I think Petrofac needs to start increasing both their backlog and pipeline first. A backlog of $7-8b+ would provide stability. The pipeline of projects currently is less than $30b, they should really look for new markets now that UAE has closed the doors and increase their pipeline to beyond $40b again.

But as it stands, they've gotta focus on securing projects to keep a backlog of $5b+ consistently... so before we focus on $7-8b high margin backlog and £7.. let's start focusing on enough work to keep the company cashflow positive and £1.

I suspect current backlog: $4.6-4.8b following the orders won thus far in 2021
Pipeline: $28-30b following ADNOC suspension.

"90p by 3pm"?

"The company did cooperate with SFO since 2017."

Or at least ever since SFO told them that PFC did not cooperate.

Wigwammer,

The independent investigation PFC had done WAS BEFORE SFO LAUNCHED IT'S OWN INVESTIGATION. The independent investigation was completed in 2016. It's only natural to provide that.
Petrofac is cooperating with the investigation.

"probably contributed to the SFO's view they were not cooperating"
No, this was on a different matter - which Petrofac have ever since that RNS cooperated with SFO.
Examples of cooperation:
- Suspending anyone suspected of wrongdoing (COO)
- CEO not being involved directly with the investigation
- Committee of the Board established to oversee the investigation
- etc.

The company did cooperate with SFO since 2017.

"I read this as the bribe payments were split into multiple payments, with the last being in 2018 (probably end of the project)."
Probably hidden in some accounting/contract with the agents that was signed off by either Lufkin himself, or one of the other 4 that was named, imo.

Wigwammer,
PFC shared the independent investigation (completed by a third party) with the SFO. So it's not a blame on Petrofac, they had hired an independent third party to do the investigation - and provided the report to SFO for their benefit.
As PFC has stated, their ethics policy has to be at the highest standards following all business ethics ever since that investigation.

"And consequently allowing the wrongdoing to carry on right up to 2018. All overseen by the same CEO they originally questioned."
"Up to 2018" - This is a hard one. The initial independent investigation PFC had done was related to Unaoil and contracts in Kazakhstan.
Also, there is no way Petrofac secured UAE contracts via bribe in 2018. As reported by SFO, these bribes were in 2013 and 2014.
I read this as the bribe payments were split into multiple payments, with the last being in 2018 (probably end of the project).

If this was overseen by the CEO, the CEO would have been charged.

Wingwammer,

The SFO investigation has been dragging on for so long that majority of the employees have left the business.

"Petrofac confirms that no charges have been brought against any Group company or any other officers or employees. Although not charged, a number of Petrofac individuals and entities are alleged to have acted together with the individual concerned."
I know that AT LEAST three of four that were named in the Lufkin report from 2019 have all left Petrofac as of this month. However, Petrofac has been stating in RNS' that "a small number of former employees are alleged to have acted together" - so likely all four have left.

I'm not sure what SFO could do now that there is new management and all alleged employees have left.
DPA is definitely the most probably outcome. Petrofac have been consistently engaging and co-operative with SFO by providing all requested documents.

Bribes totalling $81.2m charged against Lufkin.

So what is the potential financial penalty for PFC?
Probably not significant in comparison to the markets that a DPA would open up again for Petrofac.

28th Jan: Extension to North Sea Unity contract for INEOS, Approx. $30-40m
4th Feb: 2 contracts for Oman worth approx. $300m
9th Feb: Decomm of 2 wells in Australia, approx. $20-30m
14th Feb: Buffalo field redevelopment in East Timor, approx. $20m?
15th Feb: FEED partnership with others for Repsol, approx. $0-5m? lol
17th March: Scotland net zero projects FEED/detailed engineering, approx. $5-10m?
18th March: Iraq contract extension, approx. $80m.
Others: Minor projects, approx. $0-2m each

Total: Approx. $500m order intake in 2021 thus far.

"The Convertible Bonds contain a covenant relating to a restriction on incurrence of indebtedness. So long asany Convertible Bond remains outstanding, the Company undertakes that it shall not, and shall procure thatno member of the Group shall, incur, assume or permit to exist any indebtedness; provided that thisrestriction shall not apply in respect of:
• any indebtedness in respect of the Convertible Bonds ("Bond Debt");
• any other indebtedness where the aggregate principal amount of such other indebtedness, whencombined with the aggregate principal amount of all other indebtedness of the Group from time totime (excluding the Bond Debt), would not cause the total indebtedness of the Group on aconsolidated basis to exceed US$45 million (or the equivalent thereof in other currencies at thencurrent rates of exchange); and
• any permitted indebtedness (as more fully described in the Terms and Conditions of the ConvertibleBonds)."

Mals1960,

12 months after.
But the date referred to as "Closing Date" (i.e. closing date of the placing) is 24th July 2017 :)

But there is another covenant preventing HUR from taking debts more than $45m. HUR used this option previously for "decommissioning bond".
That bond was settled and cash was moved to restricted cash in place of the decommissioning liabilities.

I'm unsure whether there is another covenant applies which prevents HUR from taking out debt altogether (including the $45m). It would make sense as to why they paid it off and moved cash to restricted.

I think y11-shx or Dickbat can provide a more expert opinion/answer to this :')

Ha!
It's more like C2H5OH!

speedygon,

"Why are there no responses to all the negative things he said in the video, balance sheet actually being poor, low margins, high cost of over-runs, can you lot try and defend Petrofac on those?"
Petrofac's balance sheet is strong currently.
Low margins yes, but this is partly because of COVID. Margins will likely improve this year (depending on bids won).

"And why are there no responses to this link I posted"
Ofcourse the suspension of ADNOC awards to Petrofac has impacted the company. I believe $11-14b of work in the pipeline lost. "Majority" of these were meant to be awarded in Q1 2021 and Petrofac were looking to win some of these big orders.
The suspension means that they cannot win any of the potential $14b work in the pipeline and this has impacted Petrofac's backlog + pipeline. At a guess, this is a potential loss of $1.5-3b of work won for PFC.
The shareprice has dived as a result.

Petrofac still has c. $30b of work in the pipeline to keep them going. The backlog in November 2020 was $5.1b. Personally, I believe a CURRENT backlog (following the ADNOC suspension) of anything ABOVE $4.5b is positive for a share price of c. 95-100p.
It's hard to measure the impact until the next update by Petrofac - but I highly doubt that their backlog has dropped below $4.5b. Sometimes it's good to be conservative here.

HUR can have $30-45m in bond debt*, but not take out a bank loan.

"In addition, the Company covenants that it shall not enter into any bank loan or similar arrangement with abank or other financial institution, nor will it draw down under any revolving credit facility or other similarfacility with a bank or financial institution, prior to the date falling 12 months after the Closing Date"

I think Hurricane can take out a loan, but will be limited.
I think it was like $45m

"It can't have much further to fall, if at all can it?"
Until the next RNS stating <11k bopd CURRENT production....

Been buying here significantly over the past week and today.

This company is a at a significant value at the moment.

It's likely that Petrofac's backlog will have reduced following the suspension for awards from ADNOC.
I have bought in expecting backlog to be ABOVE $4.5b currently.
On that basis, the current share price is a bargain.

Good luck to all genuine people who are in Petrofac. I'm sure that you'll all be well rewarded.

y11-shx,
I don't fear missing out. So don't you worry about me!

I suggest you go do research on HUR before you talk about "biggest opportunity".
But hey, you know nothing about the challenges faced by this company and are simply gambling.

Lmao, you live on positivity? Positivity on a share with many negatives doesn't make you positive. It makes you deluded.

LOL
Are you really that triggered of one poster talking "so much rubbish" on a stock they're not invested in?

Keep hoping and gambling bro.