Engage Xr Regulatory News (EXR)

25 Sep 2006 07:01

Expro International Group PLC25 September 2006 Embargoed until 07.00 25 September 2006 EXPRO INTERNATIONAL GROUP PLC Expro Announces Pre-Close Trading Update and £144 million of Contract Wins Expro International Group PLC ("Expro" or the "Group") announces today thattrading during the six months ending 30 September 2006 has seen a continuationof the positive momentum established in prior periods. Expro's focused organicstrategy coupled with the acquisition of Power Well Services Inc. ("PWS"), hasenabled the new combined business to build an enhanced platform for sustainedprogress. The market for late cycle upstream oil and gas products and services remainsvery positive. Driven by global demand for energy, the hydrocarbon industrycontinues to be the only real answer to the supply equation, a situation whichis likely to prevail out to 2010 and beyond. This environment has driven strongdemand for oil and gas well activities and as a consequence all Expro productlines are enjoying high levels of demand. Integration of PWS The acquisition of PWS was a step change in the global development of Expro,adding markets and technologies to our portfolio, whilst bringing synergies tothe Group and assisting our existing growth strategies. The integration of PWSis progressing well and at a pace ahead of our initial plans. Our customers havewelcomed our enhanced capability and the benefits are already being seen. PWShas brought to us a strong business platform in the increasingly importantmarkets of the Middle East and Brazil. The technology within Power Chokes isbenefiting our domestic U.S. business, as well as providing good internationalgrowth prospects. In the former market, our Choke products play an essentialrole in the development of unconventional, land based gas reserves where flowmanagement in association with rock fracturing is critical to commercialisationof tight gas prospects. This type of gas field is increasingly important withinthe domestic U.S market which is becoming service intensive as more complexreservoirs are exploited. New Contract Wins totalling £144 million In the Regional Businesses, where the majority of PWS' products and servicesfit, £88 million of new business was secured in the period. Now organised on anEastern and Western hemisphere basis, all geographic areas enjoyed new contractawards which are phased to deliver income over the coming 5 years. In the Eastern hemisphere new contracts were secured in the North Sea withStatoil, CNR and Gaz de France totalling £16 million. In the markets of Northand West Africa further progress was made in Algeria, and Libya for Total,Repsol, Woodside and Sonatrach with Total and Woodside also featuring in newbusiness awards offshore West Africa in Angola and Mauritania. The total of newAfrican business came to £32 million. Notable was the contract award valued at£24 million over 3 years made by Saudi Aramco as a result of the PWSacquisition. This new market position and contract for Expro offers considerablepromise as a growth platform in the important Middle East region. In the Western Hemisphere a further £16 million of new contracts were secured,the most notable being the continuation of progress in the deepwater Gulf ofMexico with welltest awards from BHP and Anadarko, complementing our existingdeepwater subsea contracts. In South America, excellent progress is being madein establishing Expro as a preferred supplier to Petrobras in Brazil forwelltesting services and establishing a solid distribution platform foradditional Group products. The market for our Global Businesses, where Expro has material technicalpositions has continued to be strong. Prior period investments in technology hasresulted in contract awards totalling £56 million. The majority of these havecome in the area of Subsea tools. Awards from bp in Azerbaijan, CNR in the UK,BHP and Anadarko in the Gulf of Mexico are representative of the increasinginternational diversification of the global subsea markets. This growing marketsegment also drives demand for our leading TronicMatre business. In this area weprovide state of the art instrumentation and high reliability connectors toenable our customers to manage their subsea production throughout the economiclife of the field. At the end of the period TronicMatre, which uses short leadtime as a competitive advantage, held a healthy confirmed order backlog of £16million. The final part of our Global portfolio is Production Solutions where we providefast-track, cost effective topside solutions to small field developments. Thegestation period to contract award can be very long in this business ascustomers' decisions are driven by commerciality and, increasingly, security. Inthe first six months of this year the Production Solutions business secured asmall contract with a total value £4 million to provide an early productionfacility for the Kangean concession in Indonesia. Other highlights include theimminent completion of a high specification production barge in Nigeria forChevron. This barge was successfully constructed in country and will commenceoperations early in the second half of the financial year for a minimum periodof 2 years. Revenue recognition of £22 million will commence with operationsdelivering revenues evenly over the contract life. These awards have helped Expro maintain high levels of order backlog, which nowstands at £478 million across the Group. Conversion of the backlog to revenuevaries from contract to contract, with some phased over 3-5 years, improving thevisibility of future revenue streams. Graeme Coutts, Group CEO commented: "I am very pleased with the pace andprogress of the integration of PWS. The acquisition has created a strategicbridgehead for Expro to meaningfully participate in new and important geographicmarkets as well as adding real capacity at a time when the outlook for productsand services has seldom been stronger. Our overall strategy of enhanced customercare, technology development and geographic alignment remains as valid post thePWS acquisition as before. In the eyes of our customers, employees andshareholders, the value position of Expro has been retained and enhanced and Ilook forward to continued progress in the second half and beyond." - Ends - For further information, please contact: Expro International Group PLC 0118 959 1341Michael Speakman, Finance DirectorEd Cutts, Investor Relations Weber Shandwick | Square Mile 020 7067 0700Rachel Taylor / Stephanie Badjonat Note to Editors:Expro is one of the leading UK international oilfield services companies,supplying services and products fundamental to the safe, efficient and economicexploitation of hydrocarbon reserves. Expro provides the international oil andgas industry with a range of high value added, differentiated services focusedon improving well-performance and optimising well production in a safe andenvironmentally friendly way. The Expro Group employs over 3,700 people andoperates in fifty countries worldwide. In August, Expro completed theacquisition of PWS, its largest acquisition to date and is currently capitalisedat c. £730 million. For more information, please refer to the Group's website atwww.exprogroup.com. This information is provided by RNS The company news service from the London Stock Exchange