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The Future is Bright for Subsea Entrepreneurs Says Corporate Finance Expert

10 February 2011

Entrepreneurial subsea oil and gas companies have a real opportunity to seriously increase their value in the next two to three years, according to Colin Welsh, of Simmons & Company International.

The corporate finance expert for the energy industry will encourage independent British subsea firms and their backers to invest in growth when he gives one of the opening presentations at Europe's largest subsea event, Subsea 2011, in Aberdeen on Wednesday 9 February.

He said: 'With demand for oil and prices rising and current producing fields declining, the fields yet to be developed are largely going to be in deepwater environments. The opportunities for the subsea industry are greater than ever before, and now is the time for companies operating in that sector to position themselves to take advantage of the growth coming their way.'

Global capital expenditure in oil and gas infrastructure is expected to be in excess of $450 billion in the next four years, with 40% of that coming from deep or ultra deepwater provinces. Mr Welsh believes that subsea service companies should be looking to drive up the value of their business by investing in additional capacity and services and ensuring they can service key growth markets.

'As spending increases the market revenues will grow and margins will improve as spare capacity falls. This visibility of this growth potential is driving heightened interest in the sector from an investment and M&A perspective. To take advantage of the opportunities companies need to have good management and a robust balance sheet. Those who do will make a lot of money over the next few years.

'There are a lot of smaller companies operating in the subsea segment and doubling or even tripling their revenues over the next three of four years is not an impossible target for those that focus on developing their services and technologies in key deepwater markets where activity is set to explode.

Organised by Subsea UK, Subsea 2011 is expected to attract over 2,000 delegates. The conference boasts an impressive line-up of the UK's leading subsea industry figures. The event will continue this evening with the subsea awards dinner and tomorrow with an exhibition showcasing the best of British subsea talent and technology.

Alistair Birnie, chief executive of Subsea UK said: 'This year is set to be our best since the event was established in 2004. These are exciting times for the subsea sector and our aim is to help member companies take advantage of the global market to create value for them, their stakeholders and the UK economy.'

Sponsored by Shell and featuring its head of subsea, Frank Bee, the conference will cover a wide range of topics including major global projects, health, safety and environmental issues, innovation, operating strategies and legislation, skills development, recruitment and retentions, integrity, reliability and obsolescence. The exhibition will run on the 9th and 10th of February.