18 Nov 2010 15:29
18 November 2010
LAMPRELL PLC(the "Company", "Lamprell" or the "Group")
LAMPRELL ANNOUNCES US$ 210 MILLION CONTRACT AWARD AND INTERIM MANAGEMENT STATEMENT
Lamprell (ticker: LAM), a leading provider of specialist engineering services to the international oil & gas and renewables industry, is pleased to announce that it has received a US$ 210 million new contract award from Eurasia Drilling Company Limited ("EDC") and issues the following Interim Management Statement for the period 1 July 2010 to 18 November 2010.
Further to the announcement of 18 October 2010, the contract with EDC is for the construction and delivery of a completely outfitted and equipped, LeTourneau designed, self-elevating Mobile Offshore Drilling Platform of a Super 116E (Enhanced) Class design, valued at US$ 210 million. The rig is designed to operate in water depths of up to 250 feet and will have a rated drilling depth of 30,000 feet. Lamprell will fabricate the jackup rig in modular form in its new yard in Hamriyah and then complete the construction and commissioning in a shipyard, which is yet to be determined, in the Caspian Sea. The project is planned to be completed 24 months from the commencement of construction.
In rig refurbishment we have worked on a total of 42 jackup rigs in 2010 and these projects have included work scopes covering the full range of our upgrade and refurbishment services. Projects have been shared between our UAE facilities, with Sharjah working on 21 rigs and the Hamriyah facility working on 21 jackups. As previously guided, the jackup rig upgrade and refurbishment activity is at a lower level of average expenditure than in the prior year and recently the Company has experienced a slowdown in the rig refurbishment business. As such, Lamprell, at this time, expects the results for 2010 to be at the lower end of current market expectations. Despite the recent slow down in rig refurbishment, we continue to see evidence of improvements in most of our other operating markets and our bid activity remains high.
A priority for management continues to be our focus on pro-actively managing the Group's cost base whilst at the same time maintaining first class project execution. The procurement group continues to establish strategic agreements with key suppliers and this initiative is already delivering substantial cost savings which are forecast to continue throughout 2010 and beyond.
From an operating perspective, Lamprell continues to focus on maintaining high standards of project execution, with a particular emphasis on quality and safety, whilst delivering projects both on time and on budget. In H2 2010 the Company has been awarded an Engineering, Procurement and Construction ("EPC") contract by National Drilling Company, Abu Dhabi, for the construction and delivery of two jackup rigs valued at US$ 158.5 million each, with additional optional equipment orders valued at US$ 12.6 million per rig. The rigs will be completely outfitted and equipped, LeTourneau designed, self-elevating Mobile Offshore Drilling Platforms of a Super 116E (Enhanced) Class design. Work on the both rigs has commenced with delivery scheduled for the end of Q1 and Q2 2012 respectively. Work has commenced on the construction of the first Gusto MSC NG-9000 design self elevating and self propelled offshore wind turbine installation vessel for Fred Olsen Windcarrier AS at our Jebel Ali facility and the procurement phase of the second vessel is progressing on schedule.
The construction of two offshore well head platforms for a leading oil and gas operator in India is progressing well with delivery scheduled for late Q4 2010. The engineering and procurement phase of the Gusto MSC NG-5500 design self elevating and self propelled offshore wind turbine installation vessel for Seajacks 3 LTD is progressing on schedule at our Hamriyah facility and fabrication work has just commenced.
In Jebel Ali, work on the Livorno process modules for Saipem S.p.A. was completed on time and on budget with final delivery taking place on 2 September 2010. Work is proceeding on the Aquila process modules for Saipem Energy Services S.p.A. and delivery of the modules is expected to be completed by 28 December 2010.
After a review by management, the Board has now agreed to terminate the Group's operation in Thailand with effect from 31 December 2010. The total cost of closing the facility will be reflected in the current year's financial statements and is not expected to be material.
The Group maintains a substantial order book extending to 2012 which at the end of October was approximately US$ 725 million, excluding the EDC contract, comprising approximately US$ 647 million from EPC projects and approximately US$ 64 million from offshore construction projects, including offshore wellhead platforms, Floating Production, Storage and Offloading units and accommodation modules. The Group's financial position has not changed significantly from 30 June 2010, however, cash and bank balances have improved largely as a result of additional customer advances.
We continue to see high levels of enquiries for our services in most sectors of our business and the Board remains optimistic that the long term prospects of the Group remain promising.
- Ends -
Enquiries:
Lamprell plc +44 (0)20 7920 2347
Nigel McCue, Chief Executive Officer
Scott Doak, Chief Financial Officer
M:Communications, London Patrick d'Ancona +44 (0)20 7920 2347
Georgina Briscoe +44 (0)20 7920 2348
Andrew Benbow +44 (0)20 7920 2344
Notes to editors
Lamprell, based in the UAE, has played an increasingly prominent role in the development of the offshore industry in the Arabian Gulf for over 30 years, in later years providing specialised services to the offshore oil and gas industry.
·; Lamprell's three primary facilities are in Port Khalid and the Hamriyah Free Zone, in the Emirate of Sharjah, and in the Jebel Ali Free Zone, in the Emirate of Dubai, all of which are in the UAE.
·; The principal markets in which Lamprell operates, and the principal services it provides, are:
o Upgrade and refurbishment of offshore jackup rigs;
o Engineering, procurement and construction of jackup rigs, liftboats and drilling related equipment;
o New build construction for the offshore oil and gas sector, including Floating Production, Storage and Offloading systems and other offshore and onshore structures; and
o Oilfield engineering services, including the upgrade, refurbishment and new building of land rigs.