Oil & gas facilities service provider Petrofac Ltd (LSE: PFC) said it has had a good start to the year and is increasingly confident that 2009 will be another year of strong growth.
In a pre-close trading update ahead of announcing results for the first half to June 30 2009, it said that, with year to date order intake across the group of US$5.4 billion, including US$5.0 billion of new Engineering & Construction project awards, total backlog is expected to be approximately US$8.0 billion at the end of June, double the figure as at December 31 2009.
In Engineering & Construction, the group has made good progress on the US$5.0 billion of new contract awards secured in the first quarter of the year. The majority of construction subcontracts have been agreed and a significant proportion of activities in relation to the procurement of materials and equipment have been completed, which gives the group a high level of confidence that these projects will be delivered in line with initial expectations.
The Offshore Engineering & Operations, Engineering Services, Training and Production Solutions' business units continue to perform broadly in line with expectations. Tender activity, particularly for brownfield engineering prospects has increased in recent weeks, leading to new business opportunities.
In Energy Developments, the first tanker shipment of approximately 472,000 barrels of oil from the Don field has been delivered to a terminal in Rotterdam. Following commencement of production from the West Don field in late April, we expect commencement of production from two wells on the Don Southwest field in the next few days. Plateau production on the Don fields is expected to be achieved in early 2010 after commissioning of the permanent export route over the Thistle platform.
The group has continued its strong cash generation and, notwithstanding that an advance payment on a recent contract award of around US$300 million is expected to be received early in the second half of the year, expects its gross cash balances to be around US$850 million at June 30 2009.www.proactiveinvestors.co.uk
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