UPDATE 2-Petrofac to start output soon from Don Southwest

* Sees Don Southwest output starting in next few days

* Sees total backlog of about $8.0 billion at end June

* Petrofac reiterates that it has had good start to the year

* Hopeful of winning more business over second half

(Adds comments from interview with CFO, share price)

LONDON, June 30 (Reuters) - Oil and gas services company Petrofac (PFC.L) said on Tuesday it expects to start production from the Don Southwest field in the UK North Sea in the next few days.

Petrofac reiterated that it has had a good start to the year and is increasingly confident that 2009 will be another year of strong growth. [ID:nLF921838]

The shares were down 0.4 percent at 656 pence at 0955 GMT.

The company also said its total backlog is expected to be about $8.0 billion at end June, down from $8.2 billion at end April but up from $4.0 billion at the end of 2008.

It secured $5.0 billion of new contracts in the first quarter, but hasn't announced any major wins since April.

"We are still bidding and are hopeful of winning more business over the second half of the year, but our principal focus is obviously to make sure we get a good start on the business we have already won," Chief Financial Officer Keith Roberts said in an interview with Reuters.

"Revenue is only worth having if you make the right margins out of it."

Petrofac is looking into three new bids this week in the Middle East.

It has gross cash balances of around $850 million, down from more than $900 million at end April, although an advance payment on a recent contract award of around $300 million is expected to be received early in the second half.

Petrofac said trading was in line at its Offshore Engineering & Operations unit, an area of its business that has seen slightly softer demand because operators in the typically high cost area of the North Sea have focused on cost control.

"That said revenues have been pretty robust and we are seeing increasing levels of bidding activity not just in the North Sea but in international markets," said Roberts.

DON FIELDS

Petrofac is operator of Don Southwest and holds a 60 percent interest in the field, while Valiant Petroleum Plc (VPP.L) has a 40-percent interest.

Peak production from Don Southwest and nearby West Don, where Petrofac is also operator and where production started on April 28, is expected to reach more than 40,000 barrels of oil per day (bopd) in early 2010.

The first tanker shipment of about 472,000 barrels of oil from the Don field has been delivered to a terminal in Rotterdam.

On the outlook for oil, Roberts called crude prices at around $70 a barrel a reasonable level.

Oil CLc1 fell to a low of $32.40 a barrel in December from record highs above $147 in July last year, but have since recovered to above $70. [OIL/]

(Reporting by Julie Crust; editing by Hans Peters)