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Petrofac sees good revenue visibility as new order intake gains

Published: 07:51 26 Jun 2018 BST

Petrofac
Petrofac is seeing early signs of recovery in the UK North Sea

Petrofac Limited (LON:PFC) said on Tuesday that it was well-positioned for the second half with good revenue visibility as it recovers after a difficult 2017.

The oilfield services company revealed in a trading update that new order intake in the year to date was US$1.8bn, compared to US$1.7bn last year.

The group also has about US$20bn of bid opportunities due for award in the second half.

In April, Petrofac sold its JSD6000 installation vessel as part of its strategy to focus on its core business and improve its balance sheet.

Trading in line with expectations 

“"We are trading in line with expectations, delivering best-in-class project execution, continued momentum in new orders and further progress in our strategy,” said Petrofac chief executive Ayman Asfari.

“Furthermore, we are well positioned for the second half with good revenue visibility, a strong competitive position and healthy liquidity.”

READ: Petrofac making “good progress” in 2018 as new contracts roll in

Petrofac said its engineering and construction division was making good progress on several major projects that are expected to be mostly complete around the end of the year, including the KNPC Clean Fuels project, Lower Fars Heavy Oil project, Upper Zakum Field Development and Fadhili Sulphur Recovery Plant.

The business secured new order intake of US$1.2bn in the year to date, including a major upstream project in the Middle East and three awards in India.

The engineering and production services unit has secured US$0.6bn of new order intake, including on a US$265mln project in Oman and contract extensions in the UK with Chevron and ENI.

UK North Sea recovers 

Petrofac said it has seen early signs of recovery in the UK North Sea despite continued low activity, utilisation and order intake.

Production in the integrated energy services business is in line with expectations and the average realised oil price for the first half is expected to be about US$58 per barrel of oil equivalent.

The company expects net debt to be around US$0.9bn at June 30, compared to US$0.6bn in December.

Petrofac has been bouncing back from a tough 2017 when it had to suspend its chief operating officer Marwan Chedid amid a Serious Fraud Office investigation into the activities of the business on suspicion of "bribery, corruption and money laundering”.

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