Good News Trumps Bad for Willbros (WG, ETP)

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Oil & gas construction firm Willbros Group Inc. (NYSE: WG) announced preliminary results for the company’s fourth quarter and full fiscal year, at the same time that it said that it would be unable to file the required SEC documents after the company

determined that a material weakness existed in its controls over the completeness, accuracy and presentation of its accounting for income taxes, including the tax provision and related tax assets and liabilities.

The company is scheduled to file its Form 10-K on April 9th, and the CFO said:

We have reviewed our significant agreements and believe we can complete the filing within the time periods allotted. The generally non-cash nature of the items which require adjustment, primarily goodwill and tax reserves, does not impact our debt covenants or our liquidity.

That’s the bad news. The good news is that the company will begin work this month on a portion of the Red River Gathering Pipeline being built by Energy Transfer Partners LP (NYSE: ETP). Willbros, which will construct a 97-mile long segment of the system, did not indicate the value of the contract.

Investors like the good news much better than the bad, boosting Willbros’ share price by more than 25% this morning, to $4.06 in a 52-week range of $3.13-$11.87.

Paul Ausick