Willbros Reports Profitable Third Quarter 2009, Increased Backlog and Improved Visibility for 2010

HOUSTON, TX, Nov 04 (MARKET WIRE) --
Willbros Group, Inc. (NYSE: WG)

-- Third quarter results reflect:
-- Positive performance in Upstream despite loss ($0.08 per share) on an
EPC project
-- Cost reduction charges of $2.4 million, which along with additional
cost saving initiatives anticipated in Q4, are expected to save $17.6
million on an annual basis
-- Backlog increased to $501 million
-- Awarded construction of 2 spreads of the Fayetteville Express Pipeline
-- Executed NiSource Alliance Agreement
-- Formed Joint Venture with Nacap to pursue major projects in Australia
-- Annual guidance for continuing operations for 2009 reduced to $0.50-0.60
per diluted share

Willbros Group, Inc. (NYSE: WG) announced results for the third
quarter 2009: revenue of $247.5 million and net income of $1.7 million or
$0.04 per diluted share. Third quarter results reflect completion of a
major large diameter pipeline project, a loss on an engineering,
procurement and construction ("EPC") project, as well as charges
associated with meaningful cost savings initiatives. While current
markets remain challenging, Willbros continues to be optimistic about
2010 based upon its increase in backlog, the first increase in five
quarters, and significantly higher levels of bid activity across its
business lines. As a result, management is proactively keeping in place
key resources, despite the negative near term financial impact, in order
to fully capitalize on an anticipated improvement in business activity
beginning in the first quarter of 2010.

Third quarter results were also impacted by lower than anticipated
utilization rates due to delays and cancellations of anticipated projects,
higher levels of non-project chargeable staff required to address
increasing levels of bid activity, as well as inclement weather which
reduced the potential to convert project contingencies into income. The
EPC project which incurred additional charges has now achieved mechanical
completion. Randy Harl, President and Chief Executive Officer, explained,
"While the third quarter results were impacted by charges on an EPC job,
we are confident the issue is not systemic, and we are pleased with our
overall execution and job performance reflecting our continuing progress
with our processes and system improvements."

Segment Operating Results

The Upstream Oil & Gas segment reported operating income of $5.5 million
on revenue of $190.2 million. Operating results were driven by successful
execution on large diameter pipeline construction projects, offset by
charges (approximately $4.5 million or $0.08 per diluted share) on an EPC
project awarded in late 2006 that experienced schedule delays and scope
changes, subsequent to a 2009 workplace incident, and charges associated
with cost savings initiatives (approximately $0.9 million or $0.02 per
diluted share). The Downstream Oil & Gas segment reported an operating
loss of $2.0 million, impacted by charges associated with cost savings
initiatives (approximately $1.6 million or $0.03 per diluted share) and
continued customer curtailment of spend for maintenance and capital
projects in the refining sector. Regarding the previously mentioned
strategic retention of key resources, management believes this decision
should ensure critical equipment and personnel are available for
commitments, many of which are included in current backlog, beginning in
early 2010 and assure future performance levels.

Cost Reductions

In the third quarter, Willbros significantly advanced its plan to reduce
staff and indirect expenses in order to realign its costs with the reduced
level of activity in its markets. Given the significant process and
systems improvements the Company has made over the last two years,
management believes many of these cost reductions can be sustained once
market activity increases. Third quarter includes pre-tax charges of $2.4
million associated with cost reductions and anticipated additional
charges of approximately $1.3 million in the fourth quarter, which are
primarily related to office and facility leases, are anticipated to
generate annualized savings of $17.6 million. Total savings related to
cost reductions over the last twelve months should result in annualized
savings of approximately $56.1 million.

Van Welch, Senior Vice President and CFO, commented, "Our expectations for
2009 results have been impacted by continued delays and cancellations of
anticipated work as the macroeconomic environment caused our customers to
reevaluate every aspect of their businesses. Accordingly, we have
reassessed the cost structure of our business units and taken actions to
appropriately size the Company for the market conditions we anticipate,
for our current and future commitments, and for the strategic growth we
plan going forward. We have maintained discipline with respect to our cash
management and capital spending and our leaner structure will contribute
significant savings in 2010."

Awards Improve Visibility

Willbros noted that its focus on diversification of its business model
continues to provide new revenue opportunities as bid and work volumes
increase in the Government Services, Pipeline Manage & Maintain and
Pipeline Specialty Services businesses. Increased bid activity in these
areas, as well as recent awards across business segments, has improved
management's visibility into the first half of 2010. In separate press
releases today, Willbros announced the award of significant new work on
the Fayetteville Express Pipeline project, which is included in third
quarter backlog, and the execution of a long term alliance agreement with
NiSource Gas Transmission & Storage.

Downstream Market Outlook

Willbros remains well positioned for refinery maintenance and turnarounds,
small capital and life cycle extension projects, and is expecting to see
improvement in Downstream activity as early as the first quarter of 2010.
Refinery turnarounds, where early planning activity has already begun, are
expected to be executed in early 2010. Downstream construction groups are
experiencing increased levels of inquiry activity over the previous
quarter, while the Wink engineering business is continuing to position the
Company for engineering work at the plant level as well as for EPC
projects. In the past two months Downstream units have successfully
competed for and won assignments for turnarounds, tank services work and
plant engineering, displacing incumbent service providers at sites in
Cushing, Oklahoma, Baton Rouge, Louisiana and Whiting, Indiana. The
Downstream unit has also won new project work for heater services to
support operations in a large Gulf Coast refinery. At September 30, 2009
turnaround projects comprised forty-three percent of the Downstream
segment backlog. Willbros believes the traditional U.S. market for its
Downstream segment will continue to improve, augmented by increasing
opportunities in Canada and Libya.

Upstream Market Outlook

Willbros continues to believe the fundamentals supporting additional
global hydrocarbon infrastructure build out are positive. New bidding
opportunities for EPC and construction projects in North American, North
African, Middle Eastern and Australian markets are characterized by oil
field development and gas monetization activities which require
significant new investment in pipelines to transport hydrocarbons to
shipping points or end markets. Development of shale gas in the United
States and oil sands in Canada continues to attract capital and should
drive additional infrastructure build-out. In Australia, Willbros has
aligned itself with Nacap, a well-known international pipeline contractor
with operations in Australia, to leverage our complementary capabilities
and experience in pursuit of multiple large diameter pipeline EPC
opportunities associated with delivery of the coal seam methane gas
feedstock for proposed LNG liquefaction plants. The Company noted that
development plans in Canada, Australia and Abu Dhabi anticipate
expenditures, which align with the Company's service offerings, in excess
of $60 billion over the next ten years, representing significant
opportunities for Willbros Upstream units.

Randy Harl, President and CEO, commented, "Our view of the opportunity for
Willbros remains positive as we work through the pause in activity brought
on by recent economic events and we expect to see improvement across our
business lines beginning in the Downstream segment in the first quarter of
2010. In our Upstream segment, we are currently bidding on over $1.0
billion of pipeline opportunities, beyond the FEP project we were recently
awarded, for projects planned to be conducted in 2010 and 2011. To put
this in perspective, and to emphasize the increased level of visibility
we are seeing in the business, at this time last year we were bidding
only $200 million in similar projects, or approximately twenty percent of
the opportunity we see today. The Company's strong balance sheet enables
us to continue to advance our strategy to diversify our business and
expand our geographic footprint, both of which are generating new, quality
opportunities and we will continue our efforts to convert them into
backlog."

Backlog(1)

At September 30, 2009, Willbros reported backlog(1) from continuing
operations of $501.4 million compared to $387.2 million at June 30, 2009;
approximately 44 percent of backlog was cost reimbursable contracts.

Guidance

In light of current market conditions, the charges associated with cost
reduction initiatives, margin erosion primarily in the Upstream segment,
and the decision to maintain resource levels for the anticipated
improvement in 2010 activity, Willbros is now forecasting 2009 earnings
per fully diluted share to be in a range of $0.50-0.60.

Conference Call

In conjunction with this release, Willbros has scheduled a conference
call, which will be broadcast live over the Internet on Thursday,
November 5, 2009 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

What: Willbros Group, Inc. Third Quarter 2009 Earnings Conference Call
When: Thursday, November 5, 2009 - 9:00 a.m. Eastern Time
Where: Live via phone by dialing 866-550-6338 or 347-284-6930, passcode
9209847, and asking for the Willbros call at least 10 minutes prior
to the start time.
Where: Live over the Internet by logging onto www.willbros.com on the home
page under Events.

A telephonic replay of the conference call will be available through
November 12, 2009 and may be accessed by calling 888-203-1112 or
719-457-0820 and using the passcode 9209847. Also, an archive of the
webcast will be available shortly after the call on www.willbros.com for a
period of 12 months.

Willbros Group, Inc. is an independent contractor serving the oil, gas,
power, refining and petrochemical industries, providing engineering,
construction, turnaround, maintenance, life cycle extension services and
facilities development and operations services to industry and government
entities worldwide. For more information on Willbros, please visit our web
site at www.willbros.com.

This announcement contains forward-looking statements. All statements,
other than statements of historical facts, which address activities,
events or developments the Company expects or anticipates will or may
occur in the future, are forward-looking statements. A number of risks and
uncertainties could cause actual results to differ materially from these
statements, including the potential for additional investigations; the
disruptions to the global credit markets; the current global recession;
fines and penalties by government agencies; new legislation or regulations
detrimental to the economic operation of refining capacity in the United
States; the identification of one or more other issues that require
restatement of one or more prior period financial statements; the
existence of material weaknesses in internal controls over financial
reporting; availability of quality management; availability and terms of
capital; changes in, or the failure to comply with, government
regulations; ability to remain in compliance with, or obtain waivers
under, the Company's loan agreements and indentures; the promulgation,
application, and interpretation of environmental laws and regulations;
future E&P capital expenditures; oil, gas, gas liquids, and power prices
and demand; the amount and location of planned pipelines; the refinery
crack spread and planned refinery outages and upgrades; the effective tax
rate of the different countries where the work is being conducted; and
development trends of the oil, gas, power, refining and petrochemical
industries; changes in the political and economic environment of the
countries in which the Company has operations; as well as other risk
factors described from time to time in the Company's documents and
reports filed with the SEC. The Company assumes no obligation to update
publicly such forward-looking statements, whether as a result of new
information, future events or otherwise.

TABLE TO FOLLOW

WILLBROS GROUP, INC.
(In thousands, except per share amounts)

Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Income Statement
Contract revenue
Upstream O&G $ 190,172 $ 404,402 $ 854,066 $ 1,171,007
Downstream O&G 57,361 86,249 211,875 278,995
----------- ----------- ----------- -----------
247,533 490,651 1,065,941 1,450,002

Operating expenses
Upstream O&G 184,712 379,894 807,086 1,088,839
Downstream O&G 59,322 81,526 210,366 260,223
----------- ----------- ----------- -----------
244,034 461,420 1,017,452 1,349,062

Operating income
(loss)
Upstream O&G 5,460 24,508 46,980 82,168
Downstream O&G (1,961) 4,723 1,509 18,772
----------- ----------- ----------- -----------
Operating income 3,499 29,231 48,489 100,940

Other expense
Interest - net (1,977) (2,359) (6,093) (7,075)
Other - net (126) 58 (18) 204
----------- ----------- ----------- -----------
(2,103) (2,301) (6,111) (6,871)
----------- ----------- ----------- -----------
Income from
continuing
operations before
income taxes 1,396 26,930 42,378 94,069
Provision (benefit)
for income taxes (659) 8,057 13,257 36,450
----------- ----------- ----------- -----------
Income from
continuing
operations before
noncontrolling
interest 2,055 18,873 29,121 57,619
Less: Income
attributable to
noncontrolling
interest (372) (413) (1,543) (1,433)
----------- ----------- ----------- -----------
Income from
continuing
operations
attributable to
Willbros Group,
Inc. 1,683 18,460 27,578 56,186
Income (loss) from
discontinued
operations net of
provision for
income taxes (27) 1,219 (1,527) 3,042
----------- ----------- ----------- -----------
Net income
attributable to
Willbros Group,
Inc. $ 1,656 $ 19,679 $ 26,051 $ 59,228
=========== =========== =========== ===========

Basic income (loss)
per share
attributable to
Company
shareholders:
Continuing
operations $ 0.04 $ 0.48 $ 0.71 $ 1.47
Discontinued
operations - 0.03 (0.04) 0.08
----------- ----------- ----------- -----------
$ 0.04 $ 0.51 $ 0.67 $ 1.55
=========== =========== =========== ===========

Diluted income
(loss) per share
attributable to
Company
shareholders:
Continuing
operations $ 0.04 $ 0.46 $ 0.71 $ 1.41
Discontinued
operations - 0.03 (0.04) 0.07
----------- ----------- ----------- -----------
$ 0.04 $ 0.49 $ 0.67 $ 1.48
=========== =========== =========== ===========
Cash Flow Data
Continuing operations
Cash provided by
(used in)
Operating
activities $ 13,263 $ 35,867 $ 81,230 $ 97,193
Investing
activities (14,533) (14,356) (16,091) (23,943)
Financing
activities (2,836) (14,181) (32,203) (41,616)
Foreign exchange
effects 2,580 74 3,145 (499)
Discontinued operations (143) 939 (222) 3,531

Other Data (Continuing
Operations)
Weighted average
shares outstanding
Basic 38,722 38,314 38,657 38,237
Diluted 38,919 43,803 38,817 43,864
EBITDA(2) $ 12,516 $ 40,077 $ 78,010 $ 133,699
Capital expenditures 3,710 14,362 10,369 45,985

Reconciliation of
Non-GAAP Financial
Measure

EBITDA (2)
Net income from
continuing
operations
attributable to
Willbros Group,
Inc. $ 1,683 $ 18,460 $ 27,578 $ 56,186
Interest - net 1,977 2,359 6,093 7,075
Provision
(benefit) for
income taxes (659) 8,057 13,257 36,450
Depreciation and
amortization 9,515 11,201 31,082 33,988
----------- ----------- ----------- -----------
EBITDA $ 12,516 $ 40,077 $ 78,010 $ 133,699
=========== =========== =========== ===========

Balance Sheet Data 9/30/2009 6/30/2009 3/31/2009 12/31/2008
----------- ----------- ----------- -----------
Cash and cash
equivalents $ 243,723 $ 245,392 $ 255,562 $ 207,864
Working capital 327,259 321,419 307,164 285,166
Total assets 758,290 779,096 793,421 787,344
Total debt 104,967 102,263 117,723 120,514
Stockholders' equity 487,439 477,566 457,770 442,556
Backlog Data (1)
By Reporting Segment
Upstream O&G $ 310,407 $ 235,724 $ 383,795 $ 484,068
Downstream O&G 190,951 151,462 154,410 171,426
----------- ----------- ----------- -----------
$ 501,358 $ 387,186 $ 538,205 $ 655,494
=========== =========== =========== ===========

By Geographic Area
North America $ 465,259 $ 358,415 $ 512,347 $ 621,313
Middle East &
North Africa 36,099 28,771 25,858 34,181
----------- ----------- ----------- -----------
$ 501,358 $ 387,186 $ 538,205 $ 655,494
=========== =========== =========== ===========

(1) Backlog is anticipated contract revenue from projects for which
award is either in hand or reasonably assured.
(2) EBITDA is earnings before net interest, income taxes and
depreciation and amortization and intangible asset impairments.
EBITDA as presented may not be comparable to other similarly titled
measures reported by other companies. The Company believes EBITDA is a
useful measure of evaluating its financial performance because of its
focus on the Company's results from operations before net interest,
income taxes, depreciation and amortization. EBITDA is not a measure
of financial performance under generally accepted accounting
principles. However, EBITDA is a common alternative measure of
operating performance used by investors, financial analysts and rating
agencies. A reconciliation of EBITDA to net income is included in the
exhibit to this release.

CONTACT:
Michael W. Collier
Vice President Investor Relations
Sales & Marketing
Willbros
713-403-8038

Connie Dever
Director Strategic Planning
Willbros
713-403-8035

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