LAM – Lamprell – I’m still bullish

LAM (Lamprell) does the following:

The principal activities of the Company and its subsidiaries include the upgrade and refurbishment of offshore jackup rigs; fabrication; assembly and new build construction for the offshore oil and gas and renewable sector, including jackup rigs and liftboats; Floating Production, Storage and Offloading (FPSO) and other offshore and onshore structures, and oilfield engineering services, including the upgrade and refurbishment of land rigs.

The National reports:

A shortage of drilling rigs threatens to hold back Abu Dhabi’s ambitious plans to expand oil production.

Operating companies and foreign partners in exploration projects privately complain of difficulty in securing rigs to develop resources in the emirate.

At the same time, the order books of local rig builders are swelling with demand. Lamprell and Petrofac, two fabricators with UAE shipyards, had a combined order backlog of US$10.9 billion (Dh40.03bn) by midyear, up from just under $9bn in 2010.

LAM has issued a string of profit warnings, sending its share price down 81% from 386p in July 2011 to 74.25 on 9 November 2012. In the latest announcement, the company states that losses will be greater expectations.

However, I am bullish on this stock. It has a healthy order book, and demand is “swelling”. The profit warnings stem from project management issues.

El1te Trader fleshes out the details in his blog.

74.25p

About mcturra2000

Computer programmer living in Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s