Petrofac, the UK-based international oilfield services company, impressed analysts this week with strong full-year financial results as it issued upbeat projections. The crux of the forecast was the company's US$8.1 billion (Dh29.75bn) order backlog, which at December 31 had already exceeded its record order intake of $7.3bn for the whole of last year. The backlog, which indicates how busy Petrofac can expect to be in coming months and years, doubled in the past year after it won several major contracts in the Middle East and Central Asia. "Petrofac has come through what's been a challenging year for many in our industry in excellent shape," said Keith Roberts, the chief financial officer. "The backlog gives us excellent revenue visibility for this year and beyond."
Analysts lapped up the story, and Petrofac's stock, which had already doubled in the past year to become one of the FTSE 100's five best-performing stocks, rose 4.4 per cent on Monday, closing at 1,116 pence, a record since the shares started trading in October 2005. Yesterday, it traded at about 1,110 pence in London. "They are clearly doing everything right," said Peter Hitchens, an analyst with the UK-based investment bank Panmure Gordon.
"They have built order books at the same time as everyone else has seen orders retreat." JP Morgan Cazenove said in a research note that Petrofac's results represented "one of the most positive outlook statements in the sector with respect to 2010". After last year's notable scores in new markets such as the UAE, where the company won a $2.3bn contract to upgrade facilities at one of Abu Dhabi's largest onshore oilfields, and Saudi Arabia, where it is building utilities to serve a huge gas processing plant, Petrofac is bidding for more projects in the MENA and Caspian regions.
Investors may have a treat in store if the company's plan to create a new oil and gas producer by combining its North Sea assets with those of the Swedish company Lundin Petroleum attracts interest. That would be icing on Petrofac's cake. @Email:tcarlisle@thenational