Worley completes $339m share placement

WORLEYPARSONS has completed the placement of $A339 million worth of new shares to help fund its acquisition of a major service provider in Canada’s oil sands industry.
Worley completes $339m share placement Worley completes $339m share placement Worley completes $339m share placement Worley completes $339m share placement Worley completes $339m share placement

Last week, the contracting giant announced it had agreed to pay $A1.13 billion for privately owned and Calgary-based Colt Companies, a move described by chief executive John Grill as a “unique opportunity” to secure a bigger position “one of the world's largest and fastest-growing hydrocarbons markets.”

WorleyParsons will fund the Colt acquisition via debt and share sales, leaving Colt with about 6% of its capital in scrip that will not be placed on the Australian Stock Exchange.

About $100 billion is slated to be invested in the northern Alberta oil sands over the next decade, which could make the region one of the largest oil sources on earth and push Canada into the ranks of world’ top five producers.

Colt, which was founded in 1973 and now has 4600 employees, had originally considered an initial public offering to generate funds to support increasing contracts for oil sands work and ambitions beyond Canada. But after months of looking at various options, the company chose to sell to WorleyParsons.

Colt president Larry Benke reportedly said selling was the best choice to “propel growth and to take advantage of the opportunities that we feel are in front of us”.

The company has contracts with Syncrude Canada, the largest oil sands operation, as well as ExxonMobil, BP and ConocoPhillips.

The acquisition announcement came as WorleyParsons posted a 53% increase in first-half profit to $94.5 million, a result of greater demand for engineering services in the petroleum and infrastructure sectors.

The result was 22.3% higher than the second half of 2005-06, leading Grill to forecast higher earnings in the second half of this year.

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