On 3rd July PFC announced that it was trading well ahead of expectations. Not surprisingly, sp jumped but has now fallen back pretty much to the same level as before the announcement.

While perhaps not as exciting as finding the next Cairn, remember that in the goldrush days, it was rarely the prospectors who made the money, but rather the suppliers of the spades and tents and stuff - e.g. Levis if memory serves me aright.

Tim spends some real money... at last http://www.moneyam.com/action/news/showArticle?id=4985232

PFC has been recovering steadily in recent weeks, though it remains miles below its high

the chart below shows sp crashed through 200 dma level in May last year and hasn't been closed to breaking it since ..... at time of writing, it is still about £1.00 from it now

Chart now looking very good Mr C and coming up for a decent divi also.

StockMarketWire.com
Petrofac has just completed a full re-assessment of the schedule and cost-to-complete estimate for the Laggan-Tormore gas plant project. It said it was entering the final stages of the project on Shetland in the UK.

"Whilst we still anticipate project completion in the third quarter of 2015, as a result of the significant amount of additional man-hours and associated support costs required over the remaining months of project execution, we now expect to recognise a further pre-tax loss on the project of around £130 million (US$195 million at current exchange rates) in 2015," the company said.

"The additional costs we expect to incur reflect our firm intention to devote all the necessary resources to the project to meet the delivery commitments we have made to our client. We anticipate that construction activity on the site will be substantially complete by mid-June and we intend to provide an update to the market on the status of the Laggan-Tormore project with our trading statement scheduled for 23 June 2015."

"As we noted in our full year results announcement issued on 25 February 2015, in line with our latest assessment of schedule and cost-to-complete for the Laggan-Tormore project, and the final commercial settlement agreed with our client, Total, the Group had recognised a loss on the project of US$230 million(1) in the year ended 31 December 2014.

"We also stated in the results announcement that we expected to recognise no further profit or loss on the project over the remainder of the contract duration with completion expected in the third quarter of 2015.

"During late March and early April, activity on the Laggan-Tormore site has ramped up substantially as we have moved into the final construction and commissioning phases of the project.

"Continued adverse weather conditions during March on Shetland and industrial action has delayed this ramp up by almost a month from our original expectations.

"As the activity levels have increased, it has become apparent that we will need to expend significantly more man-hours to complete the project than anticipated as a result of low manpower productivity levels as the project nears completion, a greater level of rectification and reinstatement work than expected, coupled with the failure of one of our sub-contractors to deliver in line with their agreed scope."

OUCH "no way jose" I wouldn't touch this stock before not now for some time yet.
The budget for the gas project, certainly wasn't expecting the problem they have encountered.
At 20 most likely I was doing a better job on my "silk company"

more disaster stocks for "Mr C" to put under the mattress for a better day to come "maybe"!

from the Market report >>>>>>

Petrofac (PFC), down 12.52% to 887p and leading blue-chip losers, sees completion of the Laggan-Tormore gas plant project in Q3, but now expected to recognise a further pretax loss on the project of about £130m.

But the market looks forward and they've drawn a line under the project and stated they'll steer clear of further such UK based projects. I suspect they may well be back over 1000p again shortly. Tempted to buy to be honest.

confess this one has certainly not been one of my best for some time, but hey ho, unlike some here, i'm happy to own up to stinkers

You've had a nice divi recently!

Morgan Stanley note today:
"We lower our 2015 earnings by 44% to include the additional cost, with limited tax offset.
A reminder of remaining risks: We believe the market has largely ignored remaining risks through the ~40% (US$) rally up to yesterday by focusing on the core Middle East Onshore E&C business, where order intake has been strong. Beyond Laggan Tormore, we also see risks around the conversion of Mexican PEC’s to PSC’s and the completion of Greater Stella. In addition, we see less cause for optimism over OEC than the market. The Company’s diversification into IES, Offshore and EPC elsewhere reflected a need to find new growth markets as the Middle East plateaued for Petrofac after strong growth 2005-12. We still expect Onshore E&C to become ex growth and see margin contraction in coming years. Therefore the 2015-18 OEC business ex growth with lower returns and higher working capital is incomparable to the core business historically with high growth and returns. In addition, we remain cautious around the offshore strategy, particularly in light of the execution challenges seen on projects outside the core Middle East area of operations.
Stay Underweight, price target unchanged: Our price target remains unchanged at £8.70 based on a 2016 SOTP. We don’t see a spill over into 2016 performance and we were already including a cautious view in our target multiples. We stay Underweight Petrofac relative to our positive view on Oil Services as we see the market unappreciating remaining risks. Valuation at 9x 2016 PE and 2.1x BV is not overly demanding, in our view, but still significantly above the lows earlier this year. We also see an unattractive risk reward vs other stocks with 30% downside to Bear Case and no upside to PT. In the UK we prefer AMEC and then Wood Group. We are also Overweight Subsea 7, Technip, Aker Solutions and PGS."

Canaccord note:
Losses on the two highest profile offshore projects Petrofac is carrying out – Laggan- Tormore and Stella – obviously raise the question of the wisdom of the deepwater construction capability into which the company is investing $1bn. We remain cautiously supportive of this strategy – Petrofac has most of the required attributes of a deepwatercapable contractor – but we believe the multiple attached to that business is likely to be low, at least until better project performance can be demonstrated.
In-line with our treatment of other loss-making contracts – we view them as ongoing business – we are cutting our 2014 historic and 2015 forecast earnings, to reflect the losses on Laggan-Tormore as normal course events. The result is a 42% cut in earnings to both years, but immaterial moves for 16E & beyond.
At our new target the stock would trade at 19/10x 15/16E P/E, which we regard as realistic in a sector currently trading at 16/11x. We think Petrofac is likely to suffer a continued discount against its large UK peers Amec F-W and Wood Group, reflecting perceived risk in its lump-sum construction model.

Further moves downwards not unexpected then for PFC.

http://www.moneyam.com/action/news/showArticle?id=5021956

Vidacos go above 6% today if I'm not mistaken?

Alf, your thoughts on these please?

just arrived back, but i'm stuck with these anyway

that said PFC have been very disappointing for some time and the oil sector is scarcely one to be excited about
though SL have increased their stake, they haven't exactly gone overboard with the number of new shares they have bought

if i didn't already hold, i don't think i would rush to buy, even though there's a very slim chance that they'll be taken over at some juncture

I thank you, not exactly a shed lowed purchase agreed need to see others buying as well.

Welcome back to blighty -):

StockMarketWire.com
Petrofac's Offshore Projects & Operations business unit has secured contract renewals for operations and maintenance work worth about $400 million on the UK Continental Shelf (UKCS).

The largest of these awards is for the provision of operations and maintenance teams for CNR International across its North Sea assets - the three platforms in the Ninian complex; Murchison; and Tiffany - for the next five years.

Among others, in the East Irish Sea Petrofac has secured a two-year contract renewal from Eni, covering operations and maintenance services for the Douglas fixed platforms, Offshore Storage Installation and Point of Ayr terminal; and Duty Holder responsibility for the Irish Sea Pioneer operations support vessel.

This builds on Petrofac's existing portfolio of service provision for Eni, including as Duty Holder of the Hewett field and assets in the Southern North Sea.

StockMarketWire.com
Petrofac said it has made a good start to the year in ECOM, securing more than $4.7 billion of order intake and, putting the challenges that have been faced on Laggan-Tormore to one side, the rest of its portfolio continues to perform well.

"The Group's backlog stands at record levels, giving us excellent revenue visibility for the rest of this year and beyond," said CEO Ayman Asfari in a pre-close statement.

"Our pipeline of bidding opportunities remains attractive, and ongoing investment by our clients in large strategic projects in our core markets, together with our strong competitive position, should see us secure a number of further awards over the second half of the year.

"In Integrated Energy Services, our focus remains on generating value from the existing project portfolio and reducing the capital intensity of this business."

Highlights:

· Construction activities on the Laggan-Tormore project are substantially complete; we are now busy with final completion and pre-commissioning-related activitiesand our focus remains on delivering first gas in Q3 2015; additional completion and pre-commissioning works are expected to lead to incremental pre-tax costs of approximately £30m; deferred tax asset recognised in respect of tax losses on the project of approximately £20m

· The rest of our portfolio continues to perform in line with our operational and financial expectations(1)

· Net profit(2) expected to be significantly weighted towards 2H 2015, reflecting phasing of project delivery, particularly in OEC, where a number of projects are expected to reach their percentage of completion threshold for initial profit recognition in 2H 2015

· ECOM order intake of US$4.7bn in the year to date, including the US$900m Yibal Khuff award in June 2015; Group backlog stood at record levels of US$20.5bn at 31 May 2015 (31 December 2014: US$18.9bn), with ECOM backlog up 12%

· Net debt of US$1.2bn at 31 May 2015 (31 December 2014: US$0.7bn), primarily reflecting ongoing investment in IES's Greater Stella Area project and our offshore installation vessel, payment of the 2014 final dividend and incremental costs on Laggan-Tormore

this must be a first ...... PFC actually bouncing on its figures
in the old golden days, it always used to slump, regardless

StockMarketWire.com
Petrofac has received an award notification for Kuwait Oil Company's (KOC) manifold group trunkline (MGT) system in the north of Kuwait.

The lump-sum engineering, procurement and construction (EPC) project, valued at approximately $780m, is integral to KOC's plans to increase and maintain crude production over the next five years.

Three new gathering centres (GCs), which form part of the broader project, are already under construction with Petrofac executing the EPC contract for GC 29.

Due for completion towards the end of 2017, the MGT system will provide the feedstock to each of the GCs via three independent networks of intermediate manifolds and pipelines.

Each of the three GCs will be capable of producing around 100,000 barrels of oil per day together with associated water and gas.

StockMarketWire.com
Petrofac has reported that for the six months eneded June 30 2015 revenues were up 25% to $3.2bn (2014: $2.5bn), as a number of OEC projects moved into execution stage.

Underlying net profit was 4% lower at $130m (2014: $136m).

It said it had been successful in new orders for ECOM. Around $6bn of order intake has been secured in the year to date in its core markets and it continues to see a healthy pipeline of bidding opportunities.

Ayman Asfari, Petrofac's group chief executive, commented: "Against the backdrop of a challenging environment for the industry, we are in a strong position.

"We have record levels of backlog in ECOM, which brings excellent revenue visibility for the rest of this year and beyond. Our clients are continuing to invest in large strategic projects in our core markets, where we have an unrivalled track record and a very cost-competitive delivery capability.

"We continue to drive operational efficiencies to maintain our cost-competitiveness and we are working with our clients to address cost pressures and generate value for them whilst protecting our margins.

"As we look forward, we are focusing on our traditional areas of strength, driving for best in class operations and project delivery and improving our cash generation as we reduce the capital intensity of the business and deliver value from our IES portfolio."

Goldman Sachs note:
"Petrofac stands out in our European Oil Services coverage for its: 1) geographic exposure; 2) FCF improvement as the investment cycle for major projects comes to an end; and 3) attractive valuation. The 2Q results indicate it is on track to deliver revenue growth, and management highlighted no interest in increasing capital commitments in IES. Given its strong backlog and Middle East exposure, we expect Petrofac to deliver steady revenue growth and, as the capex cycle ends, we see strong FCF generation (we see a 2017 FCF yield of 11.1%), which could translate into div. growth/ share buybacks. We remain Buy and add the stock to the Conviction List.
Petrofac’s exposure to the Middle East (highest in our European Oil Services coverage) provides it with opportunities to maintain/increase the backlog while most of the industry (mainly companies most exposed to offshore) is struggling to get new orders. We expect activity in the Middle East to remain strong as production continues to ramp, which provides good visibility on Petrofac’s backlog and revenue. In addition, the potential for international sanctions on Iran being lifted could mean new markets for Petrofac. As investment in IES and new vessels come to an end, we see Petrofac generating strong FCF, which provides upside potential to the current dividend yield of c.6%.
Valuation The stock trades on 2015/16E EV/EBITDA of 6.5x/5.5x vs. a last five-year average of 8.5x and averages for our European E&C coverage of 6.4x/5.9x. We marginally lower our 2016/2017 EBITDA estimates by 2%/6%, and our 12-month price target decreases to 1072p (from 1100p) based on an unchanged 2016E EV/EBITDA of 7.0x."