The company expects delivery to begin in the first quarter of 2011. The order is part of FMC Technologies’ strong and longstanding relationship with Total and will be supported by its Kongsberg and Stavanger facilities in Norway, and the Dunfermline facility in Scotland.
 
Total E&P U.K. Ltd. (a subsidiary of Total) holds an 80% operated interest in the Laggan-Tormore field, with the other partner being Danish player Dong. The offshore natural gas development lies west of the Shetland Islands in the North Sea in water depths of approximately 1,950 feet.
 
FMC Technologies sees the Total award as recognition of its highly sophisticated technologies and systems, as the Laggan-Tormore field is located in one of the most complex environments of the U.K. Continental Shelf.
 
Incorporated in 2000, Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. 

The company, which operates 25 manufacturing facilities in 15 countries, is engaged in the designing, producing and servicing technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry.
 

Funds from Operations (FFO), a widely used metric to gauge the performance of REITs, and obtained after adding depreciation and amortization and other non-cash expenses to net income, was 13 cents during the quarter excluding significant non-cash items, compared to 56 cents in the year-earlier period.

ProLogis’ non-development portfolio leased at quarter end marginally decreased to 92.4% from 92.7% in third quarter 2009. The company’s static development portfolio was 68.2% leased at year-end 2009. With global economies emanating positive signs of revival, ProLogis remains optimistic about its future performance and anticipates strong market occupancies in 2010.

Furthermore, ProLogis has witnessed a growing customer interest in new build-to-suit development projects across the globe. In addition, leasing decisions that were earlier postponed due to volatility in the markets are gradually coming off the shelf. In order to decrease the risk associated with cyclical local real estate markets and economies, and increase the stability and predictability of the earnings, ProLogis has drastically reduced its non-income producing assets on the balance sheet.

During the quarter, development starts included a 667,000 square feet facility for a major home improvement retailer in Southern California and a 504,000 square feet facility for a leading UK retailer in Scotland. Including joint venture partner capital contributions, total expected investment for all build-to-suit developments started in the second half of 2009 is $336 million.

ProLogis expects to start $700 million to $800 million of new developments in 2010, primarily in Europe and Asia. The company also expects to monetize approximately $350 million to $400 million of land in 2010. For full-year 2009, ProLogis completed gross asset sales and property contributions of $1.53 billion, which was well within its original target of $1.5 billion to $1.7 billion.

With improving property values and growing institutional demand for quality properties, ProLogis expects to generate $1.3 billion to $1.5 billion of proceeds in 2010 from sales of existing assets and contributions to funds primarily in the U.S. The company intends to utilize the proceeds to fund its existing development portfolio as well as development starts in 2010.

For full year 2009, ProLogis reduced its overall debt by $2.7 billion. During the fourth quarter, the company issued $600 million of 10-year senior notes and closed on a $108 million secured financing deal in Japan. The company has effectively reduced its 2010 debt maturities in its European funds to approximately €327 million from over €1.8 billion at the beginning of 2009.

For full year 2010, ProLogis expects FFO, excluding significant non-cash items, in the range of 74 cents to 78 cents per share.

The proposed wind farm zone is located approximately 22 kilometers from the East coast of Scotland, and covers an area of 2,852 square kilometers in the outer Firth of Forth. The zone has a potential installed capacity of up to 3.4 gigawatts (GW) which would almost double Scotland’s entire existing renewables capacity.

The 32 GW of installed capacity proposed by the offshore wind energy developers for 2020 would supply a quarter of the UK’s electricity needs. It implies that the UK will have a secure and low carbon electricity supply. In addition, the UK economy will benefit as offshore wind farm is a growth industry that will create new businesses and jobs as well as attracting inward investment.

Seagreen Wind Energy Limited, formed by Fluor and SSE, integrates extensive renewables development, asset management and operations experience of a UK utility with the offshore project delivery expertise of one of the larger publicly owned engineering, procurement, construction and maintenance services companies.

Seagreen will shortly commence the environmental assessment and technical feasibility phase of the development. This will be followed by securing supply chain commitments and structuring the financing for the projects. Fluor does not anticipate booking the first project into backlog before 2015.

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction management, and project management services worldwide. Its two segments are Oil & Gas and Power. Major competitors are ABB Ltd (ABB) and Foster Wheeler AG (FWLT).

We currently have a Neutral recommendation on FLR.

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