Purchase to help engineer cash in on deep drilling

WorleyParsons Ltd, Australia's biggest engineering company, agreed yesterday to buy Intec Engineering BV for $108.5 million to benefit from increased investment in deepwater and arctic oil and gas project development.

The purchase from Heerema Group will be funded by debt and will add to earnings, Sydney-based WorleyParsons said in a statement. Separately, the company said a venture in which it has a 50 percent stake won a A$190 million ($174 million) contract for work on an Australian natural gas project.

Deepwater offshore oil and gas production is set to jump by 78 percent in the five years to 2011, more than four times the rate in waters less than 500 meters deep, according to United Kingdom-based researcher Energyfiles Ltd.

Gaining access to deepwater services will help WorleyParsons expand into Latin America, Chief Executive Officer John Grill said.

"We certainly see Intec as providing a missing link in the business as far as the technology is concerned," Grill told reporters on a conference call.

"It's our belief that deepwater and ultra-deepwater developments will continue to grow strongly and the market for specialized engineering services will grow at a corresponding rate."

WorleyParsons gained A$1.82, or 5.4 percent, to A$35.29 in Sydney trading, outpacing a 0.4 percent advance in the exchange's benchmark energy index.

Further acquisitions

Intec has revenues of about $100 million and an earnings before interest, tax, depreciation and amortization margin of about 14 to 15 percent, Grill said. The company is able to carry out work in water as deep as 9,000 feet, said Intec Chief Executive Edward Smith, who is being retained by WorleyParsons.

Agencies

(China Daily 04/02/2008 page16)