Petrofac Regulatory News (PFC)

18 Dec 2006 07:02

Petrofac Limited18 December 2006 PETROFAC LIMITED TRADING UPDATE Petrofac, the international oil & gas facilities service provider, issues thefollowing pre-close trading update ahead of the announcement of its auditedresults for the year ending 31 December 2006, expected to be on 5 March 2007. Petrofac is pleased to confirm that good progress in the Group's performance hascontinued during the second half of the year with a particularly strongcontribution from our Engineering & Construction (E&C) division and thesuccessful start-up of production from the Cendor field, offshore Malaysia. As aconsequence, the Board anticipates that, in the absence of unforeseencircumstances, the Group's net profit for 2006 will be towards the top end ofcurrent market expectations (see note below). In the second half of the year, our E&C division secured major new EPC awards inEgypt and Tunisia which will enable us to develop our capabilities in twoimportant new geographic markets. These awards, together with existing backlogfrom contracts already in progress, substantially underpin our E&C revenuetargets for 2007. In August, our Operations Services (OS) division announced that it had beenawarded a turnkey contract for well and facilities management of Dubai'soffshore oil and gas assets on behalf of Dubai Petroleum Establishment, anentity wholly owned by the Government of Dubai. This contract, which comes intofull operation in April 2007, is believed to represent the first time a nationalgovernment entity has chosen to exploit its hydrocarbon resources through directcontracting with an international service provider. In September, our Resources division announced the milestone of achieving firstoil from the Cendor field, Block PM304, in which we hold a 30% operatedinterest. With the initial drilling programme now complete, the Cendor field iscurrently producing, on average, approximately 14,000 barrels of oil per day,ahead of initial expectations. More recently the division announced two newinvestments in Tunisia and the UK North Sea. Subject to certain governmentapprovals, we will acquire a 45% operated interest in Tunisia's Cherguiconcession, where construction of the production facilities and associatedpipeline is already underway, with production expected to commence before theend of 2007. As announced earlier today, we have acquired a 60% operatedinterest in the Don Southwest field within Block 211/18a in the UK North Sea,building on our existing interests in the area (comprising interests in the WestDon field, which is also part of Block 211/18a, and Block 211/18c). As at 31 December 2006, total backlog is expected to be at a record level ofapproximately USD 4.0 billion (30 June 2006: USD 3.3 billion; 31 December 2005:USD 3.2 billion) comprising approximately USD 2.1 billion from our E&C division(30 June 2006: USD 1.6 billion; 31 December 2005: USD 2.1 billion) andapproximately USD 1.9 billion from our OS division (30 June 2006: USD 1.7billion; 31 December 2005: USD 1.1 billion). Ayman Asfari, Group Chief Executive of Petrofac, commented: "We are very pleasedwith the way the business has progressed over the year and we continue to seegood demand for our services. Our rigorous focus on project execution and riskmanagement, combined with our strong order book, positions us well for furthergrowth in the coming financial year." Note: The current market expectations for Petrofac's net profit for the year ending31 December 2006, referred to earlier in this announcement, are based onforecasts provided to Petrofac by eight equity analysts since publication of theGroup's interim results in September 2006. The range of those forecasts is fromUSD 96.7 million to USD 120.3 million. Ends For further information, contact: Petrofac Limited +44 (0) 20 7811 4900Ayman Asfari, Group Chief ExecutiveKeith Roberts, Chief Financial OfficerRobin Caiger, Head of Investor Relations Bell Pottinger Corporate & Financial +44 (0) 20 7861 3232Ann-marie WilkinsonGeoff Callow Notes to Editors Definition of backlog Backlog consists of the estimated revenue attributable to the uncompletedportion of lump sum engineering, procurement and construction contracts andvariation orders plus, with regard to engineering services and facilitiesmanagement contracts, the estimated revenue attributable to the lesser of theremaining term of the contract and, in the case of life of field facilitiesmanagement contracts, five years. To the extent work advances on thesecontracts, revenue is recognised and removed from the backlog. Where contractsextend beyond five years, the backlog relating thereto is added to the backlogon a rolling monthly basis. Backlog includes only the revenue attributable to signed contracts for which allpre-conditions to entry have been met and only the proportionate share of jointventure contracts that is attributable to Petrofac. Backlog does not include anyrevenue expected to arise from contracts where the client has no commitment todraw upon services from Petrofac. Backlog is not an audited measure. Other companies in the oil and gas industrymay calculate these measures differently. Petrofac Petrofac is a leading international provider of facilities solutions to the oiland gas production and processing industry, with a diverse client portfolioincluding many of the world's leading integrated, independent and national oiland gas companies. Petrofac is quoted on the London Stock Exchange (symbol: PFC)and is a constituent of the FTSE 250 Index. Through its three divisions, Engineering & Construction, Operations Services andResources, Petrofac designs and builds oil and gas facilities; operates,maintains or manages facilities and trains personnel; and, where return criteriaare met and service revenue synergies identified, co-invests with clients andpartners. Petrofac's range of services allows it to help meet its clients' needsacross the life cycle of oil and gas assets. With approximately 8,000 employees, Petrofac operates out of four strategicallylocated international centres, in Aberdeen, Sharjah, Woking and Mumbai and afurther 13 offices worldwide. The predominant focus of Petrofac's business ison the UK Continental Shelf (UKCS), Africa, the Middle East, the Commonwealth ofIndependent States (CIS) and the Asia Pacific region. For additional information, please refer to the Petrofac website atwww.petrofac.com. This information is provided by RNS The company news service from the London Stock Exchange