Petrofac soars 45% as offshore wind deal cements revenue

Shares in Petrofac (LSE: PFC) catapulted 45% higher to close at 32.44p on Wednesday after the oil services firm secured a landmark $1.4 billion contract from Hitachi Energy to deliver a major North Sea wind project.

The agreement will see Petrofac join forces with Hitachi’s energy arm to construct the Nederwiek 1 offshore wind farm on behalf of Dutch transmission group TenneT. It represents the second deal under a broader $14 billion framework pact to expand TenneT’s offshore wind capacity in the region.

News of the contract coup coincided with Petrofac confirming it has now obtained the necessary performance guarantees for the initial $1 billion scheme awarded by TenneT in March.

Buoyed by these latest offshore wins, Petrofac said it expects full-year 2023 net debt to eclipse mid-year levels but remain broadly in line with 2022’s $2.5 billion revenue tally.

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Chief executive Tareq Kawash said securing backlog visibility will be key to strengthening Petrofac’s balance sheet and delivering on long-term potential as it continues to transition towards renewable energy projects.

The group enters 2024 with a “high-quality” combined oil, gas and offshore wind backlog of around $8 billion. Petrofac shares nonetheless remain down 54% over the last year.