Petrofac Share Discussion Threads

[dealy] 30/1/2021 14:11

the company didn't pay bribes. The employee did. And anyway, damages based on secondary effects are hard to prove and quantify.

[pogue] 30/1/2021 13:09

dealy
considering PFC would have been proven guilty of bribery I dont think a court would have much difficulty deciding there was material disadvantage to the other bidders. Regards not worth it why wouldnt it be those were very large contracts otherwise the bribes would not have happened.

[pogue] 30/1/2021 13:06

The ramping on this board is getting to stupid levels the price is where the price is unless you are trader then it matters little, if PFC escape a guilty verdict and oil price recovers this will rocket that is all there is to know really. The time lines of both those events are unknown. I am sitting waiting with my underwater position for the day to come.

[pogue] 30/1/2021 13:01

Mr White
I dont have Sami's ear why dont you ask him for me how many people PFC still employ in the UK, I only guess the number based on asking people who are working for them just now and they look round the office. I am unsure how many are working offshore so its an estimate. The SFO are not going to worry about 1500 people who in reality will not lose their jobs as they projects and contracts will be taken over by another contractor as the work needs done and the people doing it are the best for the job.
Regards pipeline of work ask anyone in the contracting industry right now, even Sami, how confident they are of the contracts ever starting with oil at $50 come back with the answer but from years of experience they will not start they will be postponed as I am seeing contracts doing just now. I know so many engineers out of work its easier to count those still working there is nothing going on unless its essential right now.
Regards the INEOS contract please tell me the contract amount? It is an Operations & Maintenance Support Services which means its up to INEOS how much they actually spend and at current oil prices they will not spend money unless its essential so very little.

[dealy] 30/1/2021 12:53

I d not believe any Petrofac peers will be suing them or the customer for a non totally clean tender. Such bidders would have to prove that the bribe is the sole reason for losing the bid. Such a claim would be difficult, time consuming and expensive to enforce. Not worth the trouble imo.

[whites123] 30/1/2021 12:43

Hi Pogue,

1500 employees UK is likely to be a very close estimate.
If you have the ear of Jonny then he will very likely obtain the exact number for us.

1500 or 15000 globally, either number is large and certainly something the SFO would NOT want to do is to levy a fine which puts crucial services at risk and jobs at risk.
You say
"the critical thing for PFC now is to pay a fine and have a not guilty verdict. If they are proven guilty the fine will not be as large as the total of those they have to pay to the competing contractors in the projects they won."

Sami is indeed working on an audience with the SFO and is keen to put this all behind.
But to "Be found guilty" one first has to be charged, and so far no current serving Director or the company has been charged...
After 4 years of investigation no charges have been served.
BUT: On the 11th of this month David is due to be sentenced. He has also held his hands up to 3 further charges. Taking these into consideration lowers his bird time as opposed to increasing it.. "Hands up to these charges and we will look favourably" as opposed to what I suspect will happen in that the SFO will release a similar statement as they did 2 weeks ago regards British American Tobacco and announce they do not have enough to progress to charges and case is closed. By David putting his hands up to 3 further charges he is allowing the SFO to "Tick off as solved" majority of their investigation.

When I read the announcement 2 weeks ago I read it as different to how the market re-acted. I read it as "Great, the SFO are ticking lines of investigation off and can tick that enquiry line as solved".
I sought to take advantage of what we all knew would happen and collect more stock as the fall incurred. (I admit to being flabbergasted by the extent of the drop, and it serves as a reminder how easy people can be spooked).

Cashflow is not an immediate problem with $1 Billion liquidity headroom
Tenders are out for > $42 Billion to be awarded 2021, but with a backlog of >$5 Billion and secured revenue of > $3 Billion the net result is that PFC are actually in quite a good position.

This weeks Ineos news was welcomed and will of course add to these figures positively.

Lets also see what Sami has achieved after his first 2 months at the helm when results are announced.

With preferred partners as you say being squeezed on payments its reassuring to know that PFC have a better than average relationship with our Arab friends.

[pogue] 30/1/2021 11:48

Mr White
can you name some of those multi $billion contracts PFC have won recently? I know of nobody winning any large contracts just now in the industry as no companies are looking at doing anything apart from essential care and maintenance until the oil price recovers until at least $60 for a few months. I expect contracts to start being awarded end of this year for ones that were shelved and new ones the following year.
By the way the 15000 employers of PFC are not in the UK so is not something that will deter the SFO from fining PFC. I estimate there are probably 1500 maximum left at most in the UK as most of the design work is done in the Middle East with cheap Indian nationals. In the UK the Woking and Aberdeen offices are down to skeleton staff levels.
All based on 30 years experience of the cyclic O&G contracting industry.
If you want something to worry about cashflow is going to get very tight soon and many expect contractor companies to go backrupt as oil companies have called Force Majure on many large contracts meaning they are not paying up what they owe. The hope is common sense prevails and they cough up otherwise there will be no companies to service their needs when we come out of this madness but expect them to take it to the line especially the arab ones.
PS
the critical thing for PFC now is to pay a fine and have a not guilty verdict. If they are proven guilty the fine will not be as large as the total of those they have to pay to the competing contractors in the projects they won.

[plunger2] 30/1/2021 11:07

Excellent work Whites - your thinking + analysis matches by own.
I would add also that Asfari's retirement will surely count as a "win" for the SFO.
Well done for setting it all out.

I'm hopeful for a return to the better days here.

JMHO

[rocket57] 30/1/2021 10:51

Hi, thanks for your post - very reassuring. Just one question: I heard yesterday one of the companies increased their short portion. Why would they do that is the share price is about to climb?

[rocket57] 30/1/2021 10:51

Hi, thanks for your post - very reassuring. Just one question: I heard yesterday one of the companies increased their short portion. Why would they do that is the share price is about to climb?

[twixy] 30/1/2021 10:44

Nice post - thanks for taking the time.

[whites123] 30/1/2021 09:32

OK.

Not sure how many of you call and speak to IR or anyone else at PFC.
I generally call them a couple of times a year just for a "Catch up".

I read someone saying they could have to raise funds to pay any fine... LOL...
Sorry, that isnt going to happen.
But what is on the table is some high power meetings to try and sort this mess out without any liability being accepted.

Sami had only held his position for 2 weeks when the latest SFO announcement hit, and it landed on their desks at 4.30pm on Thursday.
Sami was scheduled to be flying out to UAE that very evening and was going through customs when it landed.
They knew they had to respond and they did so.
Suddenly the agenda for his visit was changed from "Business" to ensure shareholders were onside..
The SFO threw a curveball.
Shareholders are resilient though and this is demonstrated by the fact there have been no reduction in disclosable interest.

The only changes have been in short sold positions, and until this week that was to increase shorts.

As for comments regards doing business with PFC, again to suggest that companies are holding back is to be frank, quite laughable.
Tenders for contracts have grown despite the economic slowdown and secured revenue is just 200 Million below comparative pre-covid times.

Covid has been the factor the world has had to deal with and consider the average oil price for 2020 was just a few cents above $40 per barrel.

As we enter 2021 with vaccines and industry clambering to get going again we currently sit with an average price of oil thus far at above $51 per barrel.

Sami has intimated he is willing and ready to speak to the SFO.
He has even intimated that PFC may be willing to find a way to closure by accepting a fine with no liability.

The SFO will this month succeed in seeing David Lufkin sentenced and off to do some bird.
This alone will draw one line under the situation, and there is expected to be no surprises as it is widely believed that the sentence has been agreed and the hands up to 3 further charges earlier this month were to allow SFO to close those lines of enquiry.

Petrofac in the meantime carry on winning Multi Billion $ contracts and the news this week from Ineos / PFC confirms that their relationships are strong.

The share price was hammered when the SFO investigation broke 4 years ago.
Since then the share price has been hammered again and again on the same news, to suggest its "New news" each time it runs to print.

The SFO average investigation time is 4 years 7 months, so you can see that the investigation thus far has not even reached the average time.

The sum of parts does not reflect the true story, what we are seeing is fear and more fear being peddled and armchair investors accepting this as gospel.

The remit of the SFO is not to bankrupt a company, and chatter again of fines that will see the demise of PFC are ludicrous.. Headlines: "SFO complete investigation and hand out fine that cripples company and puts 15,000 people out of work leaving Oil services with no support"

Feb is going to be an interesting month.

Armchair investors Stateside have bloodied the noses of short sellers.

If we see this occur here then we can expect a HUGE re-rating with immediate effect.
Without it, I still expect to see a steady climb to from whence we fell on 15th January (£1.70)
The stock was building momentum at that point and heading to £2.00

We have UK Tech week 16th - 18th Feb
Oil and Gas conference 18th - 19th Feb

Both of these alone will generate interest and very likely improved share price.
Results are scheduled for 24th Feb and it will be first time for Sami as CEO to captain.

In August 2017 the SFO started investigation into BAT (British American Tobacco)
Earlier this month they announced the investigation was closed as they could not offer evidence to support a realistic prospect of conviction.

The SFO have their fall guys from PFC and on the 11th February will see David convicted. That will in essence draw a line under those part of the investigations

Pay your money, take your side.
All i see is an overwhelming compelling argument to buy as many PFC shares as one can afford. To me this is a no brainer.

[twixy] 30/1/2021 09:20

9 trading days until sentencing: How many shorters will be bold enough to stay in that long?

[wardy333] 30/1/2021 08:41

Blackrock reduced again as well as Cape view, and Engadine slight increase, expecting Rye Bay to reduce next Week also.

[dealy] 30/1/2021 08:40

There was quite a meltdown in the overall indexes last week. A mixture of high Vix (caused by the targeted short squeezes) and a sort of frustration about Covid. Nothing new really. It meant that the Ftse was basically back to where it was in August despite a) vaccine success and b) Brexit trade deal c) Biden presidency.That index hangover should lift soon paving the way for a huge recovery in stocks like Petrofac

[oakville] 30/1/2021 08:19

And still the share price falls shorters in control.

[leoneobull] 30/1/2021 06:15

Webba1 LSEi looked at this from a technical and fundamental then compared market cap and growth prospects to competitors. seriously undervalued and suffering from the SFO hang over. The risk is two fold as i see it 1. Fine and it has to raise equity to cover - I see that as highly unlikely but not impossible. 2. Growth prospects - lots of pipeline but want to see that they can win it with no hang up from the "bribery" piece although to be brutally honest there will be lots of other companies from other countries who will have engaged in the brown paper bag in some of the less regulated bidding territories! i didnt buy into this on a "short squeeze" looked at those shares that had taken a huge hit and believed this was undervalued and driven down by shorts. i see a recovery in line with decent results end of Feb and expectation of the SFO debacle to give a boost also .i have a target here of 1.70 but think it could go way higher as the Oil sector recovers. Thats my view- was a touch nervous as i saw the technical bottom at 1.06 and it went below that, i then gave it a bash but have bought in and out and then stuck some play money in America! the key message is if it drops and theres no difference in the rationale, dont sell- you only realise the loss when you do and i can give you lots of examples where you'll watch the share and kick your self. my only advice is never buy or sell at the bell and be patient with stocks unless there is a massive external issue or a material issue with the company. The market can spook and is meant to so you sell and some one else prospers!! GLA

[leoneobull] 30/1/2021 05:56

Pfc shorters hall of shame...Great to see Capeview reduce significantly...Fund % short change Date changedBlackRock Investment Management (UK) Limited 3.04% -0.06% 28 Jan 2021CapeView Capital LLP 0.53% -0.55% 28 Jan 2021Engadine Partners LLP 0.53% 0.18% 28 Jan 2021RYE BAY CAPITAL LLP 3.53% 0.29% 21 Jan 2021Total 7.63%

[twixy] 29/1/2021 22:09

Cape View just halved their short position - seems like most of the bigger shorters think they have squeezed enough.

[cybernest53] 29/1/2021 21:09

asa8 Either way both in halfwitville! 😂😁

[asa8] 29/1/2021 20:47

Oakville ie halfpenny

[whites123] 29/1/2021 16:20

Absolutely 100%.
Today the stock is just tracking the FTSE

After the shenanigans yesterday of Wall Street trying to ensure the small guy is screwed it unnerved a few.

The Shorts have increased to ensure that what has happened stateside doesnt happen here... (Call it a pre-emptive botty smack)

BUT..... PFC is not a shop in a Mall.
It is an absolute pivotal point in Oil services. From exploration to distilling to new energies.

With tenders for Hundreds of BILLIONS, and backlog of BILLIONS and an improving POO, there really is only one way...

Pay your money, take your chances...

In truth, this has northwards of £4.00 written all over it, and thankfully the sum of parts all add up to suggest that will easily be realised.

But what of these shorts?

The only way to deal with them is to BUY, BUY, and BUY some more when finances allow..

[comedy] 29/1/2021 16:14

agree wardy. like many have loaded up.will just wait it out.

[wardy333] 29/1/2021 15:40

A/Ts to sell and plenty of them, seen it all before , shorts trying to hold this but the tide will turn in the longs favour, just a waiting game.

[mastersmix] 29/1/2021 15:33

I'm in at 103 for the run... should be fun