Willbros Group Focuses on Opportunities in Pipeline Integrity and Canadian Oil Sands

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Researched by Industrial Info Resources (Sugar Land, Texas)--Willbros Group Incorporated (NYSE:WG) (Houston, Texas), which provides design, construction and management services in the oil & gas, petrochemical and power industries, yesterday reported third-quarter earnings results for the 2011 fiscal year. The company reported a net loss of $111.3 million, which includes a pre-tax goodwill impairment charge of $134.3 million. Revenue for the quarter was $466.1 million, compared to revenue of $404 million in 3Q10. Revenue for the first nine months of 2011 was $1.25 billion, compared to $789.3 million for the corresponding period of 2010.

Recent events have prompted the company to focus on pipeline safety services, in addition to traditional engineering and construction services. "We believe our pipeline integrity management services offering presents significant opportunities. Pipeline failures such as in San Bruno, California, and Allentown Pennsylvania, have moved pipeline safety to the forefront of the public and regulatory spotlight," said Willbros president and CEO Randy Harl. "Industry analysis and estimates of this market are in excess of $10 billion per year for pipelines and associated facilities, presenting us with a huge new market opportunity." Much of the U.S. pipeline infrastructure is more than 40 years old, suggesting the need for increased future spending for maintenance and, in some cases, replacement.

In its Downstream Oil & Gas segment, the company won turnaround, tank and field services work valued at approximately $58 million during the third quarter, but noted that activity in the segment was being hampered by delayed turnaround activity and uncertain timing on smaller capital projects.

Harl emphasized that Willbros was involved in "growth opportunities in North America that offer hundreds of billions of dollars of opportunities, including the buildout of electric transmission in the U.S., growing production in the liquids-rich shale plays and basins, the huge potential in pipeline integrity management services, and continuing investment in the Canadian oil sands."

Industrial Info is tracking more than $800 million in North American projects employing Willbros. In the Canadian oil sands of Alberta, Willbros Canada (Calgary, Alberta) is working with Williams Energy Canada (Calgary), the Canadian subsidiary of Williams Companies (NYSE:WMB) (Tulsa, Oklahoma), as general contractor on the construction of a 226-mile natural gas liquids pipeline. The 12-inch-diameter pipe will transport up to 45,000 barrels per day of liquids from Suncor Energy's (NYSE:SU) (Calgary) Fort McMurray upgrader to Williams' olefins fractionation facility near Redwater, Alberta. The pipeline is expected to begin operations next summer.

Information on this and other projects is available in Industrial Info's North American Industrial Database.

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