Wood and Faroe upbeat on oil prospects
Robin Watson: a year of transformation
A loss of $30 million for the year (2016: profit of $34.4m) was reported after exceptional costs of $165m, including $67m in respect of the acquisition of Amec Foster Wheeler and restructuring & integration costs of $51m.
Robin Watson, chief executive, said: “2017 was a year of transformational strategic development. The acquisition of Amec Foster Wheeler in October brought together two businesses and three brands to create Wood, a global leader in project, engineering and technical services delivery.
“We are a broader business with multi-sector, full service capability across energy and industrial markets and a stronger, more balanced offering in oil & gas. Integration is progressing ahead of schedule with initial cost synergies achieved earlier than plan. Financial performance for 2017 is in line with guidance. I am confident we have a unique platform to unlock revenue synergies and generate good longer term growth.”
The Board has recommended a final dividend of 23.2 cents per share, which makes a total distribution for the year of 34.3 cents, an increase of 3%. The final dividend will be paid on 17 May 2018 to all shareholders on the register at the close of business on 20 April 2018.
“We expect further growth in 2018. Government represents the largest sector for our E&IS business and we are well positioned to benefit from increased environmental and infrastructure investment, particularly in the US. In Europe we will also benefit from EPCM work for GlaxoSmithKline in Germany secured in the second half. Due to the multi-sector nature of our capabilities in E&IS we see strong opportunities for revenue synergies across complementary sectors in our Asset Solutions and Specialist Technical Solutions businesses.”
A loss before tax of £13.7m for the year against a loss of £61.6m last time.
Graham Stewart, chief executive, said: “I am pleased to announce our full year results for 2017 which was another significant period for the company and one in which Faroe continued its evolution into a full cycle E&P business.
“We had further appraisal drilling success on our largest ever oil discovery, Brasse, in Norway which contributed to record growth in 2P reserves to 98 mmboe (after our sale of part of Fenja in 2018), with further 2C contingent resources of 79 mmboe.
“We trebled our development capital investment year on year to approximately £100 million, and are on track to deliver our organic production growth target of over 35,000 boepd in the medium term from existing projects, representing growth of around 2.5 times 2017 production.
“Financially, the year was also strong for Faroe, generating EBITDAX of £82.2 million from ongoing operations and completing our debut bond issue in November 2017 to raise $100 million on good terms.
“In February 2018, as part of our ongoing management of the portfolio and capital allocation, we announced a partial sale of our interest in the Fenja oilfield development in Norway, bolstering our strong financial position and freeing up capital for allocation to the pending Brasse field development.
“Faroe now has the distinct advantage of being in a fully-funded position and with clear line of sight to deliver material value growth, whilst continuing to pursue our significant exploration, appraisal and infill programme.
“Opportunities to accelerate further growth through potential value-accretive acquisitions and disposals also continue to be a major focus for the Company going forward.”