Petrofac was added to thesharehub’s B-list on Jan 2nd, 2012 at 1441p with a target of 1720p. The stock currently trading at 1740p has been above the target price on several occasions showing strength against a weaker market background. The 2012 sp high is 1774p.
The company has a $10.8Bn backlog which provides much of the strong 2012 revenue visibility.
However, it is the recent deal with Gazprom in Iraq on the first phase of the Badra Oilfield Development Project which highlights the companies ascendancy in the region. This is the 3rd meaningful contract for PFC in Iraq.
Next month the Iraqi government plans to hold its fourth international bidding round for licences in the southern region and it is highly expected that many of the contracts/terms will be more lucrative for IOC’s. This is largely due to criticism via Super majors on the current contracts but also due to recent defections to Kurdistan which the Iraqi government are keen to avoid. Kurdistan currently has more attractive contracts, more streamlined systems (less red tape) and on the whole, is booming.
PFC clearly has firm intentions of growing their presence in Iraq and with the recent Gazprom success, thesharehub believes they are well placed to see more contracts tenders coming their way.
Thesharehub is upgrading Petrofac’s 2012 target to 1900p per share.