RE:RE:RE:Petrofac
I held Petrofac shares from 2009 to 2010, doubling my investment in the process. Enquest was spun off from Petrofac around that time - Enquest operations were previously Petrofac's production arm until they were listed separately.
Petrofac were for many years regarded as the leading UK listed oil services company in terms of quality and dependability etc. At the time Ithaca contracted with them Petrofac was still the most reliable UK listd oil services partner to team up with.
Things have not gone quite so well for Petrofac since 2012/2013 onwards. Their debt levels increased - not a threat to their solvency by any means but expectations have traditionally been so high for Petrofac that a period of lower cash generation due to the mix of work caused considerable investor frustation.
The FPF-1 delay was clearly a knock back for Petrofac in terms of NS customer confidence. Whilst the increased capacity requirements for FPF-1 and the seasonal restrictions for aspects of the top side work on FPF-1 have exacerbated the delays, Petrofac were clearly not fully on top of the project management.
The importance of FPF-1 to both Petrofac and to the City goes well beyond the size of the project and revenues in financial terms, although the GSA revenues are very important to Petrofac - this has become an extremely important operation for Petrofac in terms of managing customer, investor and City perceptions.
Are Petrofac still the high quality operator that they clearly were pre-2012? In my view yes. Whilst Petrofac have had organisational issues to address they are still unquestionably one of the leading oil services operators - completion of FPF-1 to spec and on time from here is not a demanding task for Petrofac, it is well within their scope - given the percieved importance of FPF-1 to Petrofac's customers, shareholder and City analysts, not to mention their cash flow, I am pretty confident that we will get a solid update.
Doug