Agenda 1. Introduction and headlines Ayman Asfari 2. Strategic update and project review Ayman Asfari 3. Operating environment Ayman Asfari 4. Results and financial profile Tim Weller 5. Summary and outlook, Q&A Ayman Asfari, Tim…
Financial headlines Net profit before exceptional items and certain re-measurements of US581 million, in line with previous guidance Record year-end backlog of US18.9 billion, which, together with US3.5 billion of order intake in…
Operational headlines Strong competitive position in core business with record backlog and Well-positioned to respond excellent revenue visibility to operating environment Will maintain bidding discipline and focus on our core areas…
2. Strategic update and project review
Revisiting our key priorities for growth Key priorities for growth Performance Success in Turkmenistan, Iraq, Mexico, Malaysia Geographic Expand existing business Disappointing performance in Shetland on expansion into new…
Project review Ticleni Greater Laggan- Production Stella Tormore Enhancement Area Gas Plant, Contract, Development, Shetland Romania UKCS Islands, UK During 2014, we worked Sailaway expected in early Agreed a commercial towards a…
Our overall portfolio remains in good shape Over 25 years, we successfully delivered, or are delivering, more than US50bn of projects Our existing portfolio of approximately 50 substantial projects is in good shape UK/Europe Iraq…
Reflections on IES strategy IES has successfully Established Petrofac in new strategic geographies PM304 facilitated our entry into Malaysia This helped secure Berantai Risk Service Contract and developed in-country capability to…
Reflections on IES strategy IES has successfully Built our track record Through Ohanet Risk Service Contract, in Algeria, we secured a US600 million EPC project, by far our largest EPC project at that time PM304 gave us skillset to…
Refocused IES strategy IES will act as an integrator of the Groups core capabilities engineering, construction and operations Focus IES Strategy Manage the portfolio Lower capital intensity by Capital to maximise value,…
Strategic update and project review summary Taken decisive action to address challenges on Ticleni, Greater Stella Area and Laggan-Tormore Overall portfolio is in good shape, with built in margins consistent with guidance…
3. Operating environment
Operating environment - overview Industry is adjusting to lower oil price 2014 year-end backlog environment 8% At this stage, clients in our core onshore 18% markets are continuing to commit to ongoing investment 7% 67%…
Onshore Engineering & Construction OEC contributed 80% of ECOM net profit over last 5 years with vast majority of onshore projects in MENA Projects in MENA are often at lower end of oil supply cost curve Majority of clients are…
Offshore Projects & Operations Operations, maintenance and brownfield 2014 OPO revenue modifications activities remain robust 5% More than 50% of gross margin comes 24% from projects outside of UK Opportunities to build upon our…
OPO - Offshore Capital Projects Market for shallow water EPCI remains competitive Long-term market for deepwater EPCI opportunities remains attractive and we remain committed to our strategy Marketing Petrofac JSD6000 from mid-2017…
McDermott strategic marketing alliance Agreed a strategic marketing alliance with McDermott to address the deepwater SURF market Under the 5 year Alliance, we will jointly pursue opportunities in the deepwater subsea, umbilicals,…
Engineering & Consulting Services Recent success in securing ECS largest project on Rabab Harweel project in Oman, worth US1 billion - positioning ourselves for futher EPCm opportunities ECS is helping to take us into new areas:…
Maintaining our strong competitive position Building on cost efficiency and optimisation programme undertaken in 2013 and 2014, which focused on: Resource optimisation Tighter control and enhancing awareness of costs Better…
Operating environment summary At this stage, clients in our core onshore markets are continuing to commit to ongoing investment Operations and maintenance activity remains robust and opportunities to grow internationally…
4. Results and financial profile
Income statement USm 2014** 2013 Revenue 6,241 6,329 Operating profit* 691 793 Profit before tax 634 789 Income tax expense (33) (142) Profit for the year 601 647 Profit attributable to Petrofac 581 650 Limited…
IES exceptional items and re-measurements USmillion Pre-tax Tax Post-tax Ticleni PEC 164 3 167 Greater Stella Area 207 - 207 Other 92 (5) 87 TOTAL 463 (2) 461 Group reviewed the carrying value of IES assets reflecting: decision to…
Integrated Energy Services Revenue i16% reflecting Berantai RSC, now in its operational phase; rephasing field development activities on Mexico PECs; Ticleni PEC in Romania, as we managed field investment prudently; and sale of…
Onshore Engineering & Construction Revenue i8% activity levels and revenue increased substantially in 2H 2014 as moved into execution phase on new projects Net profit i7% loss provision on Laggan-Tormore substantially mitigated by…
Offshore Projects & Operations Revenue h20% higher levels of activity, particularly on capital projects such as Laggan-Tormore, FPF1 modification and SARB3 Net profit i10% pre-tax loss of around US30m on OPOs scope of work on…
Engineering & Consulting Services Revenues h21% substantial increase in activity levels, including Rabab Harweel Integrated Project in Oman and In Salah Gas and In Amenas consultancy contract Net profit h3%, net margin 7.6% net…
Net debt movements Net debt was flat across the year, standing at US0.7 billion at 31 December 2014: cash generated from operations of US0.9 billion net investing activities of US0.8bn consideration in respect of PetroFirst…
We have a strong financial position While we have revised expectations over recent months, including the impact of lower oil prices on IES, net debt is currently lower than our previous plans Balance sheet remains strong and…
Our backlog stands at record levels ECOM year-end backlog (US billion) Backlog stands at record year-end Well-positioned for long-term revenue levels, after delivering a year of record growth in ECOM as move into the order…
Our backlog gives us excellent revenue visibility 31 December 2014 backlog ECOMs year-end backlog has been ageing (USbn)* augmented by the award of the Lower 5.9 Fars heavy oil project in Kuwait in January 5.6 0.5 5.4 This gives…
Dividends, growth and returns Maintained dividend in 2014 DIVIDEND Maintaining robust financial position to support dividend remains a high priority Target ROCE above 20% in medium-term as we RETURNS lower capital…
5. Summary and outlook, Q&A
Summary and outlook Taken decisive action to address Ticleni, Greater Stella Area and Laggan-Tormore and success in closing a number of commercial settlements Re-focused IES strategy to improve synergies with ECOM, lower…
Appendices
Appendix 1: Group organisation structure Divisions Engineering, Construction, Operations & Integrated Energy Services (IES) Maintenance (ECOM) Chief Operating Officer, Chief Executive, Marwan Chedid Rob Jewkes Reporting…
Appendix 2: Key ECOM projects Original contract NOC/NOC led company/consortium Joint NOC/IOC company/consortium IOC/IOC led company/consortium value to Petrofac Laggan-Tormore gas processing plant, UKCS US800m In Salah southern…
Appendix 4: Segmental performance Onshore Engineering & Construction earned 50% of Group revenue and 64%* of net profit Middle East and Africa represents 53% of revenues in 2014 CIS and Asia: primarily relates to activity on…
Appendix 5: Employees Approximately 19,800 people in 7 key operating centres and 24 offices Around 30% of our employees are shareholders/participants in employee share schemes Total headcount 200 3,300 5,900 4,900…
Appendix 6: IES data book update 44
Key IES projects Production Enhancement Contracts (PEC)** END DATE TRANSITION Magallanes and Santuario, Mexico PERIOD 2037 TRANSITION Pnuco, Mexico* PERIOD 2043 TRANSITION Arenque, Mexico PERIOD 2043 Risk Service…
IES project portfolio Oil and gas Intangible oil facilities per and gas assets Oil and gas note 10 (Ohanet per note 13 assets per (fully (Block PM304, note 10 (Block depreciated) OML119 and PM304, and floating other pre- Greater…
Key IES projects The following slides describe the following for each of the three commercial models: A A reminder of how the commercial model works B The current projects within each portfolio C The key facts pertaining to…
Production Enhancement Contracts A Under the PEC commercial model we are paid a tariff per barrel for production and Commercial Model earnings are not directly impacted by commodity prices PECs are appropriate for mature fields…
Production Enhancement Contracts C Magallanes and Santuario, Mexico Petrofac is providing production enhancement services to PEMEX (the concession holder) for the Magallanes and Santuario blocks in Tabasco State, central Mexico…
Production Enhancement Contracts C Pnuco, Mexico Petrofac is providing production enhancement services to PEMEX (the concession holder) for the Pnuco block in Veracruz State, eastern Mexico First award in conjunction with…
Production Enhancement Contracts C Arenque, Mexico Petrofac is providing production enhancement services to PEMEX (the concession holder) for the Arenque block, located 30 kms from Tampico on the Mexican continental shelf, eastern…
Production Enhancement Contracts E As part of the ongoing energy reforms in Mexico, we have the opportunity to migrate our Valuation drivers portfolio of Production Enhancement Contracts in Mexico to a new form of contract At…
Risk Service Contracts A Under the RSC commercial model we develop, operate and/or maintain a field, while the Commercial resource holder retains ownership and control of their reserves Model Our interests are aligned: we…
Risk Service Contracts D Berantai oil and gas field, Malaysia The key operational activities on the Berantai project include: 2012: achievement of first gas and the drilling of the initial phase one wells 2013: completion of the…
Risk Service Contracts E We recover costs and profits from the sale proceeds of production but we do not share in the barrels of production as we have no legal ownership/entitlement to the reserves We are not directly exposed to…
Equity Upstream Investments A Commercial Model Under this commercial model we take a direct interest in a field via a Production Sharing Contract or Concession Agreement We have production and commodity price exposure B…
Equity Upstream Investments C Block PM304, Malaysia Petrofac has a 30% operating interest in Block PM304 The interest was acquired in 2004 and is held through a PSC Petrofacs partners in the PSC are PETRONAS (30%), KUFPEC (25%) and…
Equity Upstream Investments C Chergui, Tunisia Petrofac has a 45% interest in the Chergui gas field, held through a Concession Agreement The interest was obtained in 2007 from ETAP, the Tunisian national oil company, which holds the…
Equity Upstream Investments D Block PM304, Malaysia Operational Activities 2015: Ramp up of production expected as water injection and gas lift fully commissioned C wells being brought on stream Chergui, Tunisia 2015+:…
Equity Upstream Investments D Greater Stella Area Development, UK 2015-16: completion of modification and upgrade of the FPF1 and commencement of production from the Greater Stella Area Operational Activities 60
Equity Upstream Investments E The expected profile of aggregate net production for our existing EUIs is as below: Valuation Drivers Point forward data from 1 January 2015: Liquids as % of barrels of oil equivalent (boe) 71%…
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