Record high for pipeline maker Wellstream

Jan 11 2008 by Graeme King, The Journal

OIL and gas pipeline maker Wellstream saw its shares rise to a record high yesterday after another positive update on the company’s trading.

The Newcastle company, which listed on the stock exchange in April, saw its price soar a further 10% yesterday to a thumping 1255p – nearly quadruple its debut price of 320p.

While motorists have cursed the ever increasing price of oil, Wellstream has benefited from its customers being ever more willing to pay for pipelines to reach distant subsea reserves.

Yesterday, the company revealed it racked up orders worth £365m in 2007, and Wellstream’s ‘total revenue backlog’ (which takes in orders where negotiations are not yet complete) has reached £330m, up from £226.8m at the end of 2006.

For the year ahead, Wellstream is expecting further growth in revenues, with its Brazilian factory reaching full capacity and its facility on Wincomblee Road in Walker, Newcastle, being expanded to allow further growth.

The 500-strong workforce there has already increased production from 240km to 260km this year and 2008 promises to see this figure rise further.

Now Wellstream is investing £35m to expand its hi-tech factory and install extra machinery to produce even more pipeline, which is then exported around the world on giant ‘cotton reels’ which are a familiar site in the company’s riverside yard.