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gee baussie - you coulda posted the article - effortlessly typed up by woywoy of HC fame - but stuff 'Ãm, i'll take the credit lol.
todays afr - pg35
With the oil price hovering around record levels and intense exploration and production activity in train, it is not surprising to see the share prices of companies that service the sector experiencing strong support.
One of the largest operators in the oil and gas services sector is Worley Parsons. It's share price has risen from about $29 in mid August to more than $44, an increase of about 50 per cent.
While the performance of Worley Parsons is outstanding, there are smaller players operating in niche markets that have the scope to achieve similar levels of growth in the medium term.
Neptune Marine is one such company. The business provides specialised services to operators of offshore oil and gas facilities. Its scope of services includes pipeline inspection, maintenance and repair work, an area that is likely to produce robust revenue growth due to the fact that many major pipeline facilities are overdue for repair because of their age.
Neptune's proprietary underwater welding technology, NEPSYS, can be used to construct or repair metal objects underwater. This patented technology has been used in ship repairs as well as construction and maintenance work relating to offshore oil and gas platforms and pipelines.
The NEPSYS method of welding is of the same quality as that achieved in a dry environment. Significant cost savings can be achieved using NEPSYS, as it usually avoids or minimises the need to shut down facilities and provides a more economical method of construction or repair.
While NEPSYS was the platform for Neptune's launch as a listed company in 2004, several developments in the last two years have catapulted Neptune onto the international stage as a provider of multi-disciplined marine services to oil and gas companies.
Christian Lange was appointed as managing director of Neptune in 2006 following an executive career spanning 16 years with Schlumberger, one of the worlds largest global oilfield services groups.
Mr Lange has drawn on his experience in operational strategy and his understanding of capital markets in the energy services industry to pave the way for strong growth and the establishment of diversified and reliable revenue streams. As well as one-off project, Neptune is pursuing opportunities in the inspection, repair and maintenance areas where long-term contracts generating recurring revenue can provide earnings stability. With this in mind, the company has made several acquisitions that have broadened its service offering and in particular strengthened its ability to conduct underwater inspection, repair and maintenance work.
Between December 2006 and August 2007, Neptune acquired three diving services businesses, two subsea engineering companies and one company that specialises in underwater surveying. Neptune also has the $17 million acquisition (plus a 3 year earn out agreement) of Sea-Struct awaiting settlement.
Sea-Struct is a Perth-based company that has 14 years experience in manufacturing, supplying and installing pipeline and cable stabilisation protection and erosion control products. The company services a broad range of industries that own and maintain underwater infrastructure.
The Sea-Struct acquisition is expected to be immediately earnings per share accretive. Furthermore, Mr Lange sees considerable scope to broaden Neptune's international presence through Sea-Struct's overseas affiliates and representatives. New areas that Sea-Struct's network opens up include Singapore, Indonesia and the Middle East, but Neptune's immediate focus is on growing its already strong presence in the United States, and building on its relatively new position in the Asian market.
In October, Neptune's US-based underwater services business signed an agreement with the Colorado River-Authority to provide diving services for all LCRA projects in the Texas Lakes, Neptune's other success in the water services area was an inspection, cleaning and maintenance project that it undertook on behalf of the US Army Corps.
Mr Lange believes Neptune's ability to establish a safe and efficient work record with large oil and gas-companies in the Gulf of Mexico has lifted the company's profile, enabling it to compete for large government contracts. More positive news is likely in the near term with acquisitions under review, long-term contracts up for renewal and new tenders in the pipeline.
For some time Neptune has been waiting for the right opportunity to emerge in the North Sea region. There is a significant subsea infrastructure in that area, much of which is overdue for maintenance, repair or replacement. While oil and gas supply from some North Sea fields is diminishing, it remains an active area of exploration, offering Neptuen a good mix of recurring revenue and contract work.
Neptune is believed to be close to clinching a deal to purchase an established subsea service provider in the North Sea. Such an acquisition is likely to be larger than the Sea-Struct purchase, with the potential to have a material impact on 2007-08 earnings.
With regard to Neptune's existing operations, Mr Lange said more than half the group's 2007-08 forecast revenue of $70 million had been confirmed. He noted that contracts that stemmed from recently acquired businesses were consistently higher than historical levels, as clients were more comfortable in awarding substantially larger and more complex projects to a $200 million listed company rather than a small private enterprise.
Based on consensus forecasts for 2007-08, Neptune is trading on a prices-earnings ratio of about 15. But these forecasts do not include the Sea-Struct acquisition or the impact of recent contract wins.
Consequently, the company's value could be in for a re-rating once analysts have crunched the numbers and upcoming developments are confirmed.
todays afr - pg35
With the oil price hovering around record levels and intense exploration and production activity in train, it is not surprising to see the share prices of companies that service the sector experiencing strong support.
One of the largest operators in the oil and gas services sector is Worley Parsons. It's share price has risen from about $29 in mid August to more than $44, an increase of about 50 per cent.
While the performance of Worley Parsons is outstanding, there are smaller players operating in niche markets that have the scope to achieve similar levels of growth in the medium term.
Neptune Marine is one such company. The business provides specialised services to operators of offshore oil and gas facilities. Its scope of services includes pipeline inspection, maintenance and repair work, an area that is likely to produce robust revenue growth due to the fact that many major pipeline facilities are overdue for repair because of their age.
Neptune's proprietary underwater welding technology, NEPSYS, can be used to construct or repair metal objects underwater. This patented technology has been used in ship repairs as well as construction and maintenance work relating to offshore oil and gas platforms and pipelines.
The NEPSYS method of welding is of the same quality as that achieved in a dry environment. Significant cost savings can be achieved using NEPSYS, as it usually avoids or minimises the need to shut down facilities and provides a more economical method of construction or repair.
While NEPSYS was the platform for Neptune's launch as a listed company in 2004, several developments in the last two years have catapulted Neptune onto the international stage as a provider of multi-disciplined marine services to oil and gas companies.
Christian Lange was appointed as managing director of Neptune in 2006 following an executive career spanning 16 years with Schlumberger, one of the worlds largest global oilfield services groups.
Mr Lange has drawn on his experience in operational strategy and his understanding of capital markets in the energy services industry to pave the way for strong growth and the establishment of diversified and reliable revenue streams. As well as one-off project, Neptune is pursuing opportunities in the inspection, repair and maintenance areas where long-term contracts generating recurring revenue can provide earnings stability. With this in mind, the company has made several acquisitions that have broadened its service offering and in particular strengthened its ability to conduct underwater inspection, repair and maintenance work.
Between December 2006 and August 2007, Neptune acquired three diving services businesses, two subsea engineering companies and one company that specialises in underwater surveying. Neptune also has the $17 million acquisition (plus a 3 year earn out agreement) of Sea-Struct awaiting settlement.
Sea-Struct is a Perth-based company that has 14 years experience in manufacturing, supplying and installing pipeline and cable stabilisation protection and erosion control products. The company services a broad range of industries that own and maintain underwater infrastructure.
The Sea-Struct acquisition is expected to be immediately earnings per share accretive. Furthermore, Mr Lange sees considerable scope to broaden Neptune's international presence through Sea-Struct's overseas affiliates and representatives. New areas that Sea-Struct's network opens up include Singapore, Indonesia and the Middle East, but Neptune's immediate focus is on growing its already strong presence in the United States, and building on its relatively new position in the Asian market.
In October, Neptune's US-based underwater services business signed an agreement with the Colorado River-Authority to provide diving services for all LCRA projects in the Texas Lakes, Neptune's other success in the water services area was an inspection, cleaning and maintenance project that it undertook on behalf of the US Army Corps.
Mr Lange believes Neptune's ability to establish a safe and efficient work record with large oil and gas-companies in the Gulf of Mexico has lifted the company's profile, enabling it to compete for large government contracts. More positive news is likely in the near term with acquisitions under review, long-term contracts up for renewal and new tenders in the pipeline.
For some time Neptune has been waiting for the right opportunity to emerge in the North Sea region. There is a significant subsea infrastructure in that area, much of which is overdue for maintenance, repair or replacement. While oil and gas supply from some North Sea fields is diminishing, it remains an active area of exploration, offering Neptuen a good mix of recurring revenue and contract work.
Neptune is believed to be close to clinching a deal to purchase an established subsea service provider in the North Sea. Such an acquisition is likely to be larger than the Sea-Struct purchase, with the potential to have a material impact on 2007-08 earnings.
With regard to Neptune's existing operations, Mr Lange said more than half the group's 2007-08 forecast revenue of $70 million had been confirmed. He noted that contracts that stemmed from recently acquired businesses were consistently higher than historical levels, as clients were more comfortable in awarding substantially larger and more complex projects to a $200 million listed company rather than a small private enterprise.
Based on consensus forecasts for 2007-08, Neptune is trading on a prices-earnings ratio of about 15. But these forecasts do not include the Sea-Struct acquisition or the impact of recent contract wins.
Consequently, the company's value could be in for a re-rating once analysts have crunched the numbers and upcoming developments are confirmed.