Petrofac Share Discussion Threads

[dipa11] 18/4/2024 19:10

"Petrofac wins USD350 million services contract in Equatorial Guinea
(Alliance News) - Petrofac Ltd on Thursday was awarded a technical services contract with the national oil company of Equatorial Guinea, helping local staff to manage their oil and gas assets.
The energy infrastructure company with core markets in the Middle East and North Africa won a five-year USD350 million contract with Compania Nacional de Petroleos de Guinea Ecuatorial, or GEPetrol, to deliver technical services to the operation of Equatorial Guinea's regional Block B asset.
The contract draws on Petrofac services such as operations, maintenance, asset integrity, integrity management, marine services, well engineering, project delivery and supply chain services.
Petrofac will deliver technical services across onshore support bases, a floating production storage & offloading unit and a platform on behalf of operator GEPetrol.
This follows the company's initial scope supporting the transition of the asset from Mobil Equatorial Guinea Inc. Local staff and contractors will remain in their current roles and Petrofac will manage the contract from Malabo, the capital of Equatorial Guinea, supplementing support from its technical hub in Aberdeen, Scotland.
Nick Shorten, chief operating officer of Petrofac's Asset Solutions business, said: "We look forward to developing our relationship with the national oil company of Equatorial Guinea further, collaborating to extend the life of the field to build a legacy of energy independence and sustainable growth for Equatorial Guinea.
"This award is an excellent example of our strategy in action: selectively growing our geographic footprint and driving value for our clients through late life asset optimisation.
"Africa is a key focus for our Asset Solutions business, and we are pleased to build on our operations in Ivory Coast, Ghana and Senegal and Mauritania with this opportunity in Equatorial Guinea."
Antonio Oburu Ondo, Equatorial Guinea's minister of Mines & Hydrocarbons, said: "Our vision is to create a fully capable nationally-operated oil and gas company to manage our assets. Today, I am proud that our vision is becoming a reality.
"We will grow our economy through diverse partnerships and investment in our people. Combining our strong indigenous capabilities, with Petrofac's global expertise and experience, we will deliver significant value for our country."
Petrofac shares were up 0.9% to 22.80 each in London on Thursday morning."

[investtofly] 18/4/2024 19:09

Petrofac mentioned the BP and Equatorial Guinea contracts on their website but NO mention of any in Algeria

[wellbutpoor] 18/4/2024 16:58

Fund % short change Date changed
Astaris Capital Management LLP 2.53% -0.10% 16 Apr 2024
Helikon Investments Limited 2.55% -0.14% 15 Apr 2024

[dealy] 18/4/2024 15:45

In a takeover you dummy (takeover by stronger player)

[noramping] 18/4/2024 15:27

Dealy, issuing new bonds, yeah dead easy, they will be queuing round the block won’t they 😀

[armbar] 18/4/2024 15:26

Dealy this is not necessarily trueOften in M&A bonds can be assumed Often negotiated depending on the acquirer financial position Also depends on the original bonds conditions which we do not have , we have the RCF but not the bond conditions They could be doing a Dutch auction for them for all we know similar to Tullow

[dealy] 18/4/2024 15:01

By the way, just because the bonds would have to be paid back on a takeover (assuming this is true) it does not present a huge barrier to said takeover because those bonds could be rolled by the company (new bonds in, old bonds out). A takeover by a peer makes a lot of sense, most notably in the form of cost and market synergies. A company with a strong balance sheet would not have Petrofac's current liquidity challenges

[wellbutpoor] 18/4/2024 14:45

The MM's are keeping a lid on the share price in order to clear out the T+ Traders who piled in on the spike last week.

Most of them will capitulate, unable to make good their losses and remain in the game.

When they're finally cleared out and the Brokers have banked their profit, watch the action as the MM's take on the stock and move it on up....

[armbar] 18/4/2024 13:11

That has been coming for a few hours Good luck WBP

[wellbutpoor] 18/4/2024 13:10

Squeeze coming....

[fiscal cliff] 18/4/2024 12:52

Jak - you work from home?

[topazfrenzy] 18/4/2024 12:52

Nobody wants any of their assets nor any equity in this disaster of a company, thus no news whatsoever.

This company will be gone in a year. It's going to Zero. All the management is interested in is getting as much salary payments from it before it dies.

Get out while you still can lemmings.

[dealy] 18/4/2024 12:24

If I was on the board of Petrofac I would say to management: secure 3 methods to improve liquidity / operating headroom and present the 3 alternatives for decision by the BoD. "securing" means obtaining offers (not just ideas but actually agreements, subject to approval).One such alternative is: the bondholders are willing to agree to xyz.

[jaknife] 18/4/2024 12:23

dealy,

"The credit facilities were renewed 1 year ago. Net-net, things have not "gone wrong" for the company since then. "gone wrong" would be a cancellation of a major project or a new liability emerging or an industry down turn.We have not seen this - just some hysteria"

1. You're right, the facilities were renewed one year ago and, as we all know, they now provide that the bank debt must be fully repaid by October 2024 with some amortisation in advance of that date.

2. Personally I would argue that the banks made a big mistake extending the facilities by a year and they should have forced the issue back then when PFC was in a better position to raise funds. But that's in the past.

3. You say that "things have not "gone wrong" for the company since then"

Did you not read the interim results? which revealed a $180m loss for H1?



Did you miss the profit/cash flow warning on 4 Dec last year?



4. Regardless of whatever you think about supposed "hysteria", Petrofac appears to be taking the matter a little more seriously and are ...

"in discussions with its lenders to restructure its debt which would result in a significant proportion of the debt being exchanged for equity in the business."

From:

Have you considered the possibility that these words mean that the topic is much more important than you think?

JakNife

[armbar] 18/4/2024 12:18

Anyone getting a feeling :)

[dealy] 18/4/2024 12:06

The credit facilities were renewed 1 year ago. Net-net, things have not "gone wrong" for the company since then. "gone wrong" would be a cancellation of a major project or a new liability emerging or an industry down turn.We have not seen this - just some hysteria

[armbar] 18/4/2024 11:50

Its a massive project Andoc Upper and Lower ZakumResearch it , 30bn Uae in country value :) PFC are in the race EPC2 four artificial islands Still think watch out for Adnoc imo curve ball JV, TO could acquire PFC , ROI over a couple projects, cost control , resource, expertise, tech etc

[jaknife] 18/4/2024 11:46

dealy,

"if banks thought like that, they would[n't] lend the money in the first place !! it's a dynamic market place. New developments can mean new business"

1. When the banks originally lent the money to Petrofac things were not as bad as they are now. I would remind you that Petrofac went to the market in October 2021 to raise $275m of fresh equity to repair its balance sheet. Since that date PFC has lost almost twice that amount ($310m in 2022 and an estimated £230m in 2023).

2. A proceeds clause is a standard provision, as a reminder for those who can't find the clause:

================================================
Proceeds – if the Company or any member of the Group receives capital raising
proceeds, debt issuance proceeds, disposal proceeds or UKEF loan proceeds (each as
defined in the Existing Revolving Credit Facility). Upon receipt of such proceeds, the
Company shall ensure that such proceeds (excluding fees, tax and other specified
exclusions) are applied towards prepayment of outstanding loans and cancellation of
commitments under the Existing Revolving Credit Facility and the Existing ADCB
Term Loan Facility (defined below) pro-rata to the total commitments under those
facilities. The relevant proceeds must be applied towards cancellation on the date of
receipt and towards prepayment within five business days of receipt;
================================================

From page 191 of:

90% of a loan document is to deal with what happens when things go wrong. Things have gone dreadfully wrong at Petrofac, which is why the banks are demanding repayment.

3. As a reminder, I am merely highlighting this to explain why your idea of

"Why on earth can't they do an RI to raise 200m, half of which goes to buy back bonds like Tullow did"

doesn't work

The banks want their money back and they have a contract that explicitly provides for the eventuality where Petrofac raises money from a rights issue. The contract wording couldn't be clearer.

JakNife

[armbar] 18/4/2024 11:41

Now who won the Adnoc Upper Zakum announced but who ? PFC bid for it but always thought lower Zakum with previous work was the favourite for PFC and Target for upper zakum but you never know All seems a bit cloak and dagger Andoc staying silent , Algeria upstream 1bn petrofac selected is a different project previously was downstream, then Bahrain awardedLike they are holding back for one all inclusive announcement , you know where I stand GL

[dealy] 18/4/2024 11:16

* I mean they "wouldn't" lend in the first place

[dealy] 18/4/2024 11:15

if banks thought like that, they would lend the money in the first place !! it's a dynamic market place. New developments can mean new business

[jaknife] 18/4/2024 11:09

dealy,

"Well I'm sure the lenders will be open to a conversation about the best use of funds"

That's hopelessly naive of you. From their perspective the best use of funds is to repay the bank debt.

It's almost as if you've completely misunderstood what the whole problem is!

The banks want their money back!

JakNife