Shares in Petrofac, the UK based oil and gas services company, jumped sharply after the firm released a statement on its Laggan-Tormore gas project.
The statement covered the current state and forecasts for both financial losses and time scales relating to its UK Shetland based project.
The French ‘Total’ owned Laggan-Tormore project, has been dogged by a series of problems and setbacks, ranging from cost blowouts and threats of strike by the workforce to the overall conditions of operating in a Shetlands winter.
In the last year alone, Petrofac revealed US$230m of losses, only to announce a further US$195m in April of this year.
In the announcement, Petrofac claim to be booking a further GB£30m of extra costs against the project, which it states is “substantially complete”. Further, Petrofac claims that Laggan-Tormore will come on-stream in the third quarter of this year.
It seems financial markets saw the final GB£30 million bill as a lot less than expected. Couple this with the fact that by Petrofac’s own estimates, investors will start to see a return on Laggan-Tormore later this year, resulted in Petrofac’s FTSE shares jumping 11 percent (96p) to 965.5p.
It also seems that the markets deemed Petrofac’s order book as one of the most valuable in the global energy industry.
Petrofac claims to have an order backlog of US$20.5 billion, a record high for the company, with US$4.7 billion of orders secured this year alone.
Last updated on 11:04AM - 25/06/15