Trading Statement
Expro International Group PLC
25 September 2006
Embargoed until 07.00 25 September 2006
EXPRO INTERNATIONAL GROUP PLC
Expro Announces Pre-Close Trading Update and £144 million of Contract Wins
Expro International Group PLC ("Expro" or the "Group") announces today that
trading during the six months ending 30 September 2006 has seen a continuation
of the positive momentum established in prior periods. Expro's focused organic
strategy coupled with the acquisition of Power Well Services Inc. ("PWS"), has
enabled the new combined business to build an enhanced platform for sustained
progress.
The market for late cycle upstream oil and gas products and services remains
very positive. Driven by global demand for energy, the hydrocarbon industry
continues to be the only real answer to the supply equation, a situation which
is likely to prevail out to 2010 and beyond. This environment has driven strong
demand for oil and gas well activities and as a consequence all Expro product
lines are enjoying high levels of demand.
Integration of PWS
The acquisition of PWS was a step change in the global development of Expro,
adding markets and technologies to our portfolio, whilst bringing synergies to
the Group and assisting our existing growth strategies. The integration of PWS
is progressing well and at a pace ahead of our initial plans. Our customers have
welcomed our enhanced capability and the benefits are already being seen. PWS
has brought to us a strong business platform in the increasingly important
markets of the Middle East and Brazil. The technology within Power Chokes is
benefiting our domestic U.S. business, as well as providing good international
growth prospects. In the former market, our Choke products play an essential
role in the development of unconventional, land based gas reserves where flow
management in association with rock fracturing is critical to commercialisation
of tight gas prospects. This type of gas field is increasingly important within
the domestic U.S market which is becoming service intensive as more complex
reservoirs are exploited.
New Contract Wins totalling £144 million
In the Regional Businesses, where the majority of PWS' products and services
fit, £88 million of new business was secured in the period. Now organised on an
Eastern and Western hemisphere basis, all geographic areas enjoyed new contract
awards which are phased to deliver income over the coming 5 years.
In the Eastern hemisphere new contracts were secured in the North Sea with
Statoil, CNR and Gaz de France totalling £16 million. In the markets of North
and West Africa further progress was made in Algeria, and Libya for Total,
Repsol, Woodside and Sonatrach with Total and Woodside also featuring in new
business awards offshore West Africa in Angola and Mauritania. The total of new
African business came to £32 million. Notable was the contract award valued at
£24 million over 3 years made by Saudi Aramco as a result of the PWS
acquisition. This new market position and contract for Expro offers considerable
promise as a growth platform in the important Middle East region.
In the Western Hemisphere a further £16 million of new contracts were secured,
the most notable being the continuation of progress in the deepwater Gulf of
Mexico with welltest awards from BHP and Anadarko, complementing our existing
deepwater subsea contracts. In South America, excellent progress is being made
in establishing Expro as a preferred supplier to Petrobras in Brazil for
welltesting services and establishing a solid distribution platform for
additional Group products.
The market for our Global Businesses, where Expro has material technical
positions has continued to be strong. Prior period investments in technology has
resulted in contract awards totalling £56 million. The majority of these have
come in the area of Subsea tools. Awards from bp in Azerbaijan, CNR in the UK,
BHP and Anadarko in the Gulf of Mexico are representative of the increasing
international diversification of the global subsea markets. This growing market
segment also drives demand for our leading TronicMatre business. In this area we
provide state of the art instrumentation and high reliability connectors to
enable our customers to manage their subsea production throughout the economic
life of the field. At the end of the period TronicMatre, which uses short lead
time as a competitive advantage, held a healthy confirmed order backlog of £16
million.
The final part of our Global portfolio is Production Solutions where we provide
fast-track, cost effective topside solutions to small field developments. The
gestation period to contract award can be very long in this business as
customers' decisions are driven by commerciality and, increasingly, security. In
the first six months of this year the Production Solutions business secured a
small contract with a total value £4 million to provide an early production
facility for the Kangean concession in Indonesia. Other highlights include the
imminent completion of a high specification production barge in Nigeria for
Chevron. This barge was successfully constructed in country and will commence
operations early in the second half of the financial year for a minimum period
of 2 years. Revenue recognition of £22 million will commence with operations
delivering revenues evenly over the contract life.
These awards have helped Expro maintain high levels of order backlog, which now
stands at £478 million across the Group. Conversion of the backlog to revenue
varies from contract to contract, with some phased over 3-5 years, improving the
visibility of future revenue streams.
Graeme Coutts, Group CEO commented: "I am very pleased with the pace and
progress of the integration of PWS. The acquisition has created a strategic
bridgehead for Expro to meaningfully participate in new and important geographic
markets as well as adding real capacity at a time when the outlook for products
and services has seldom been stronger. Our overall strategy of enhanced customer
care, technology development and geographic alignment remains as valid post the
PWS acquisition as before. In the eyes of our customers, employees and
shareholders, the value position of Expro has been retained and enhanced and I
look forward to continued progress in the second half and beyond."
- Ends -
For further information, please contact:
Expro International Group PLC 0118 959 1341
Michael Speakman, Finance Director
Ed Cutts, Investor Relations
Weber Shandwick | Square Mile 020 7067 0700
Rachel Taylor / Stephanie Badjonat
Note to Editors:
Expro is one of the leading UK international oilfield services companies,
supplying services and products fundamental to the safe, efficient and economic
exploitation of hydrocarbon reserves. Expro provides the international oil and
gas industry with a range of high value added, differentiated services focused
on improving well-performance and optimising well production in a safe and
environmentally friendly way. The Expro Group employs over 3,700 people and
operates in fifty countries worldwide. In August, Expro completed the
acquisition of PWS, its largest acquisition to date and is currently capitalised
at c. £730 million. For more information, please refer to the Group's website at
www.exprogroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange