Is Petrofac Limited A Buy?

LONDON -- I reckon that oil equipment and services provider Petrofac (LSE: PFC  ) , despite a slow start to 2012, is back on the fast track to punch earnings higher.

The company has an enviable track record of contract awards and excellent project execution, while operational tie-ups with industry giants such as Schlumberger should underpin some exciting growth prospects.

Tap in to abundant earnings growth
Analysts expect a 12% earnings per share increase for 2012, to 113.5 pence, to be followed by growth of 14% this year to 128.8 pence. Earnings are then expected to rise a further 15% to 148.4 pence during 2014.

Petrofac's shares look ready to offer ever-improving value for money over the medium term as profits balloon -- a P/E ratio of 14.3 for 2012 is set to fall to 12.6 in 2013 before falling to 10.9 next year, the current City consensus indicates.

A limited flow of orders during the first half of 2012 hampered Petrofac's revenues and put paid to the breakneck expansion seen in previous years.

But the group's backlog picked up speed again during the latter stages of last year, and the firm said within its December trading update that its order book stood at $11.6 billion at the end of 2012 versus $10.8 billion at the corresponding point in 2011.

Momentum set to carry on through 2013
Petrofac operates across the globe and boasts a vast presence across the oil-rich hunting grounds of the Middle East. Its Engineering, Construction, Operations & Maintenance arm secured weighty contracts within Saudi Arabia, Iraq and Kuwait last year, and the firm is at the forefront of bidding wars across a multitude of other contracts in the region.

Meanwhile, the firm's Integration Energy Services division -- which brings new oil fields into production and improves production rates at existing sites -- is expected to experience a surge of activity in 2013, as projects pick up and a number of key milestones are achieved.

Indeed, the experts at Bank of America expect the division to drive earnings growth in the future and, on top of ripe opportunities within existing markets such as Mexico and Malaysia, envision a wealth of opportunity in new regions including West Africa, Russia and Indonesia.

Other black gold beauties
Petrofac is not the only London-listed stock that looks set to deliver riches to active investors. In The Motley Fool's "How to Unearth Great Oil and Gas Shares" report, top Fool analysts identify a hatful of other natural resources stocks that are set to explode, as well as investment strategies to help you pick out your own oil and gas winners. Click here to download this totally free report.

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