Eurasia Drilling Company Limited, the leading onshore & offshore drilling service provider in the CIS, today announced its operational and financial update for the nine months ending September 30, 2014. The financial data is based on management assessment only and has not been reviewed by external auditors.
NINE MONTHS 2014 FINANCIAL HIGHLIGHTS:
• Top line revenue was US $2,371 million, 9.9% below revenue for the first nine months of 2013 in the amount of US $2,631 million;
• EBITDA margin was 28.3% compared to EBITDA margin of 26.9% in the first nine months of 2013;
• Net debt on a comparable basis was US $473 million as of September 30, 2014 compared to US $541 million as of June 30, 2014;
• Capital expenditures were US $353 million compared to US $295 million during the first nine months of 2013;
• The average exchange rate for the first nine months of 2014 was 35.4 Rubles per US Dollar compared to 31.6 Rubles per US Dollar during the corresponding period of 2013.
W. Richard Anderson, EDC’s Chief Financial Officer, commented:
“Overall we are pleased with our results for the first nine months of 2014 in the context of a challenging market environment, high geopolitical tensions, declining oil prices and weakening ruble. The strong results, with the expansion of EBITDA margin to a record 28.3%, reflect our progress in executing our strategic priorities including our focus on maintaining effective cost controls, improving core drilling efficiency and higher value drilling both onshore and offshore. As we continue to leverage our competitive advantages and our leading position in the Russian OFS market, our priority is to create further shareholder value through our efforts to maintain a strong conservatively leveraged balance sheet with stable results across all our operations. As a result, we are well placed to meet both our operational and financial targets for this and future years. ”
NINE MONTHS 2014 OPERATIONAL HIGHLIGHTS:
• Drilled 4.380 million metres, 7% below metres drilled during the corresponding period of 2013 in the amount of 4.732 million metres;
• Horizontal metres drilled in the first nine months of 2014 were up 7% compared to the first nine months of 2013 and account for 22% of total metres drilled compared to 19% during to the same period of 2013;
• The share of our largest customer, LUKOIL, increased to 62% of our total metres drilled during the first nine months of 2014, as compared to 56% during the first nine months of 2013;
• The share of our second largest customer, GAZPROMNEFT, increased to 20% of our total metres drilled during the first nine months of 2014, as compared to 12% during the first nine months of 2013;
• The share of ROSNEFT decreased to 9% of our total metres drilled during the first nine months of 2014, as compared to 25% during the first nine months of 2013;
• Our market share was approximately 28% based on metres drilled onshore in Russia during the first nine months of 2014;
• Our ASTRA jack-up rig was on paid stand-by for most of the first quarter 2014, completed one well for LUKOIL and one well for KNK during the second and the third quarters of 2014 and afterwards commenced drilling of one well for LUKOIL in the Russian sector of the Caspian Sea;
• Our SATURN jack-up rig continued its operations for PETRONAS Carigali (Turkmenistan) Sdn Bhd (Petronas) in the Turkmen waters of the Caspian Sea; two geological sidetracks were performed;
• We drilled and completed three wells on LUKOIL’s Yuri Korchagin field platform in the Caspian Sea, including two extended-reach horizontal development wells and commenced drilling another extended-reach horizontal development well;
• The new-build NEPTUNE jack-up rig continued drilling for Dragon Oil in Turkmen waters of the Caspian Sea; two wells were completed and a third was begun;
• Our fourth new-build jack-up, MERCURY, is complete with all required equipment and is being prepared for commissioning.
Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, added:
“We’ve had a very busy third quarter and I’m very pleased to report that we’ve managed to deliver again on our financial and operational targets. Both our onshore and offshore business execution was excellent and I’d like to thank all our employees for their hard work. At EDC we’ve been very disciplined in making decisions regarding our investments both organically and inorganically which in turn will support our operational and financial performance in this challenging market environment. We look forward for continued growth.”