UPDATE 2-Wellstream order backlog grows, confident on H2

* Order backlog 246 mln stg, 46 pct higher than end 2009

* CEO says seeing increase in bidding activity

* Wins major installation contract with OGX

* H1 pretax profit 10.6 mln stg vs 25.7 mln in H1 2009

* Shares rise 8.5 pct
(Adds detail, acting CEO comment, analyst comment, share price)

By Sarah Young

LONDON, Aug 19 (BestGrowthStock) – UK oilfield services company
Wellstream Holdings Plc (WSML.L: ) said new contract wins in
Brazil helped boost its order backlog and an increase in
projects up for bidding gave it confidence for the second half,
lifting its shares.

The company, which makes flexible pipes used by oil
companies in deep water, on Thursday said its first-half revenue
backlog was 246 million pounds ($383 million), 46 percent higher
than at the end of 2009, and rose to over 280 million in August.

“What we’ve seen in the first half of this year is that
bidding activity has increased … pleasing to see that the
awards have taken place,” said acting Chief Executive Alasdair
MacDonald.

He said the company expected its results for the second half
of the year to be somewhat ahead of the first six months.

Shares in Wellstream were up 8.48 percent at 550 pence at
0932 GMT, making the company the top riser on Britain’s mid-cap
index (.FTMC: ).

“The one thing that’s coming through from this is that
Wellstream appears to have turned the corner,” says Panmure
Gordon analyst Peter Hitchens.

He added that the long-term outlook for the company was good
as oil companies will have increasing need for Wellstream’s
flexible pipes as they move to deeper water to search for oil
and gas.

Wellstream also said it won a major installation contract
with Brazilian company OGX Petrole e Gas (OGXP3.SA: ), but added
that activity outside its key Brazilian market, where in 2009
state-run oil company Petrobras (PETR4.SA: ) accounted for around
60 percent of its business, remained subdued.

“Outside of Brazil the awards we’ve seen recently are
largely from Asia and Europe … recently we’ve seen an increase
in activity in the North Sea,” said MacDonald.

The company posted pretax profit of 10.6 million pounds for
the first six months of the year, 41 percent lower than the same
period last year on revenues which were down 34 percent.

Reduced demand in the market outside of Brazil resulting in
under-utilisation at its Newcastle plant hurt business in the
first half of the year, said the company, which adjusted its
cost base to improve its gross margin to 24.6 percent from 23.8
percent.

The average forecast for full-year pretax profit stands at
31.9 million pounds, according to a Thomson Reuters I/B/E/S poll
of 14 analysts.

Wellstream said it would maintain the 4 pence per share
level of its dividend.
(Editing by Lorraine Turner and Hans Peters)
($1=.6425 Pound)

UPDATE 2-Wellstream order backlog grows, confident on H2