ROGTEC Magazine - Russian Oil & Gas Technologies - News, Reviews & Articles

ROGTEC Magazine - Russian Oil & Gas Technologies - News, Reviews & Articles

Eurasia Drilling Company: Results Pleasing in – Challenging Market Environment, High Geopolitical Tensions,Declining Oil Prices and Weakening Ruble

Thursday, October 30th, 2014

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.”



EDC: 1H Results – Revenues Down, Income Down, Horizontal and Lukoil Drilling Metres Up

Thursday, August 28th, 2014

Eurasia Drilling Company Limited, the leading onshore & offshore drilling service provider in the CIS, today releases its Interim Consolidated Financial Results, prepared in accordance with US GAAP, for the six month period ended June 30, 2014.

The reviewed 2014 Interim Consolidated Financial Statements for the six months ended June 30, 2014, and Management’s Report on 2014 Interim Period Results, can be found at the following link: http://www.eurasiadrilling.com/financial_information.html

1H 2014 FINANCIAL HIGHLIGHTS:

– Top line revenue was US $1,551 million, 8.5% lower than revenue of US $1,695 million in 1H 2013;
– EBITDA was US $402 million, 8.8% lower than EBITDA of US $441 million in 1H 2013;
– EBITDA margin was 25.9% compared to EBITDA margin of 26.0% in 1H 2013;
– Net income was US $201 million, 7.2% lower than Net Income of US $217 million in 1H 2013;
– Earnings per share was US $1.37 compared to US $1.48 earnings per share in 1H 2013;
– Capital expenditure was US $222 million compared to US $179 million during 1H 2013;
– Cash flow from operations was US $255 million compared to US $216 million in 1H 2013;
– Dividend paid for the year ended December 31, 2013 amounted to USD 0.92 per share, a 31% increase compared to the dividend paid for the year ended December 31, 2012;
– The average exchange rate for the first half of 2014 was 35.0 Rubles per US Dollar compared to 31.0 Rubles per US Dollar during the corresponding period of 2013;
– In June 2014, the global ratings agency Fitch Ratings revised EDC’s Outlook to Positive from Stable and affirmed its Long-term foreign currency Issuer Default Ratings at ‘BB’.

W. Richard Anderson, EDC’s Chief Financial Officer, commented:

“Overall we are pleased with our first half 2014 results which are in line with our expectations. Despite the challenging market environment, we managed to sustain our leading position in the Russian oilfield services market as well as deliver a stable operational performance and solid financial metrics. The reported US dollar results were negatively affected by a weaker ruble, which devalued by approximately 11% period-over-period, while revenue excluding foreign exchange effect increased approximately 2.3% period-over-period. We are pleased to report that our EBITDA margin was sustained at the level of 25.9% despite significant rig moves and changes in the customer mix. We thank our shareholders for their support to EDC, look forward to further capitalising on our strengths in 2014 and are confident that we will meet both our operational and financial targets for the year.”

1H 2014 OPERATIONAL HIGHLIGHTS:

– Drilling output of 2.763 million metres, 9.1% below the output achieved in 1H 2013 (3.039 million metres);
– Horizontal metres drilled during 1H 2014 were up 22.8% compared to 1H 2013 and account for 22% of total metres drilled compared to 16% during 1H 2013;
– Exploration drilling volumes increased by 12.5% during 1H 2014 compared to 1H 2013;
– The share of our largest customer, LUKOIL, increased to 63% of our total metres drilled during 1H 2014, as compared to 57% during 1H 2013;
– The share of Gazprom Neft, which became our second largest customer, increased to 18% of our total metres drilled during 1H 2014, as compared to 11% during 1H 2013;
– The share of ROSNEFT decreased to 11% of our total metres drilled during 1H 2014, as compared to 24% during 1H 2013;
– Our rig moving crew count increased by 8.5% period-over-period;
– Our market share was approximately 28% based on metres drilled onshore in Russia during 1H 2014;
– Our ASTRA jack-up rig was on paid stand-by for most of the first quarter 2014 and later in the quarter the rig completed one well for LUKOIL and commenced drilling a well for KNK in the Russian sector of the Caspian Sea in the second quarter;
– Our SATURN jack-up rig continued its operations for PETRONAS Carigali (Turkmenistan) Sdn Bhd (Petronas) in the Turkmen waters of the Caspian Sea; one sidetrack well was drilled and a second was begun;
– We drilled and completed two wells on LUKOIL’s Yuri Korchagin field platform in the Caspian Sea, including one extended-reach horizontal development well and commenced drilling another extended-reach horizontal development well;
– The new-build NEPTUNE jack-up rig commenced drilling for Dragon Oil in Turkmen waters of the Caspian Sea;
– Fabrication of our fourth new-build jack-up, MERCURY, continued on schedule during 1H 2014.

1H 2014 STRATEGIC HIGHLIGHTS:

– In May 2014, EDC signed a three-year Framework Agreement for well construction and sidetracking operations with OAO Gazprom Neft.
– In June 2014, EDC signed a Framework Agreement with Benteс for drilling rig manufacturing in EDC’s minority owned drilling rig production facility located in Kaliningrad.

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, added:

“The first six months of 2014 were both challenging and exciting as we were undergoing changes in our customer mix. These changes required us to quickly redeploy a significant portion of our land drilling fleet, done with minimum disruption to our continuing clients. In addition, weather conditions were challenging in the first half of 2014. Given these complexities, we are pleased to have achieved solid operational and financial results.The demand for technologically advanced services such as horizontal drilling continues to accelerate and EDC is well placed to cope with the ongoing shift in customers’ demand patterns. The recently announced sanctions have had no impact to date on our activities in Russia. However, our future growth may suffer if the sanctions are extended to other areas and, specifically, if our clients are unable to expand into shale drilling at the levels envisaged.”



EDC Reports 2013 Full Year Results: NET Income up 13%

Monday, March 31st, 2014

Eurasia Drilling Company Limited,the leading onshore & offshore drilling service provider in the CIS, today announced its consolidated financial results for the year ended December 31, 2013, prepared in accordance with US GAAP.

The audited Consolidated Financial Statements for the twelve months ended December 31, 2013, and Management’s Report on 2013 Results, can be found under the following link: http://www.eurasiadrilling.com/financial_information.html

2013 FINANCIAL HIGHLIGHTS:
· Top line revenue up 8% to US $3,488 million (2012: US $3,237 million);
· Adjusted EBITDA up 19% to US $940 million (2012: US $790 million);
· Adjusted EBITDA margin up to 26.9% (2012: 24.4%);
· Net income up 13% to US $432 million (2012: US $382 million);
· Net income margin up to 12.4% (2012: 11.8%)
· Capital expenditure US $508 million (2012: US $620 million);
· Net debt as of December 31, 2013 was US $337 million (December 31, 2012: $395 million);
· Cash flow from operations amounted to a record US $751 million (2012: US $592 million);
· In April 2013 the Company placed its debut Eurobond, due in 2020, for US $600 million with a coupon of 4.875% per annum;
· Dividends declared for the year ended December 31, 2013 were $0.92 per share (2012: $0.70 per share).

W. Richard Anderson, EDC’s Chief Financial Officer, commented:

“2013 was another year of consistent growth in line with our financial and operating objectives. The sustained strength in the underlying fundamentals of the Russian drilling market coupled with stable commodity prices led to further increases in demand for our services. We continued our investments in technology, people and facilities to support our customers and deliver on their ever more challenging drilling programs. With net debt to EBITDA of only 0.4 at the end of 2013 we retain a very strong financial position. Our track record, expertise and technology give us confidence in the future even in light of the current uncertainties.”

2013 OPERATIONAL HIGHLIGHTS:
· A record 6.264 million metres drilled onshore in 2013; a 3.5% increase on 2012 (6.051 million metres);
· Horizontal metres drilled in 2013 were up by 50.3% to 1.296 million metres;
· Exploration drilling volumes were down 10.2% in 2013 compared to 2012 as the industry focused more on improving the productivity and efficiency of existing production and development;
· The share in total drilling volumes of our largest customer, LUKOIL, with whom we operate on the basis of a three-year framework agreement (concludes December 31, 2015) remained flat at 57% during 2013;
· The contribution of ROSNEFT to our total drilling volumes was also flat at 24%, while GAZPROMNEFT’s share increased to 12% from 10% in 2012;
· Our market share remained stable and amounted to approximately 29% based on metres drilled onshore in Russia during 2013,according to CDU TEK data;
· During 2013 the ASTRA jack-up rig operated for LUKOIL and CMOC in Russian and Kazakh waters of the Caspian Sea, drilling three wells over the period;
· The SATURN jack-up rig continued its operations for PETRONAS Carigali (Turkmenistan) Sdn Bhd (Petronas) in the Turkmen waters of the Caspian Sea; during 2013 two wells, each with two geological sidetracks, were completed and drilling commenced on a third well;
· Five wells were drilled and completed on LUKOIL’s Yuri Korchagin field platform in the Caspian Sea including three extended-reach horizontal development wells;
· In September 2013, Dragon Oil awarded EDC a three year contract for the provision and management of jack-up rigs the NEPTUNE and MERCURY in theCheleken Contract Area, Turkmenistan in the Caspian Sea;
· The NEPTUNE jack-up underwent final commissioning in 3Q 2013, and moved to the drilling site to commence drilling for Dragon Oil in accordance with contract terms;
· Construction of our fourth new-build jack-up, MERCURY, continued on schedule during 2013. Assembly of its first modules began in a shipyard in the Caspian Sea.

OUTLOOK

The fundamentals of the Russian OFS markets remain strong as most E&P companies have continued to deliver on their capex budgets. Demand is growing for more complex drilling solutions with new technology and heavy rigs and we expect the share of horizontal drilling in our portfolio to grow by 15% in 2014. Our customer mix onshore will continue to evolve, and we expect to increase significantly our activity with LUKOIL and GAZPROMNEFT, while activity with ROSNEFT is expected to decline. During 2014 we expect 80% of the onshore drilling rigs deployed by ROSNEFT to be reallocated to other customers at what should be satisfactory terms, while the remaining 20% will continue to work for ROSNEFT for the full year. Due to the depreciation of the ruble and a significant increase in rig redeployment in early 2014, we expect a decrease in our revenues compared to 2013 and our EBITDA margin to be unchanged vs. guidance given on January 28, 2014 with growth returning in 2015 and beyond.

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, added:

“Our focus on further developing our operational capabilities and delivering improved performance to our customer base has enabled EDC to maintain strong momentum in all of our business segments and generate record results in 2013. We continued to benefit from a positive economic environment with our leading market position enabling us to exploit opportunities. In 2013, the Russian OFS market experienced strong demand in horizontal drilling from the continuing shift towards more complex well designs. We managed to outperform the market for more complex drilling having increased the amount of horizontal metres drilled by 50%. Our offshore division secured a three year contract with Dragon Oil in the Caspian Sea for our NEPTUNE and MERCURY jack-up rigs which was an important strategic development. We enter 2014 in an excellent position to deliver on our strategy and achieve our goals, while at the same time securing attractive returns for our shareholders. 2014 is shaping up to be a year of consolidation as we adjust our client mix and face the business risk environment in the coming months.”



Eurasia Drilling Company: Awarded Multi-Year Contract for New-Build Jack-up Rigs in the Caspian Sea

Thursday, October 3rd, 2013

Eurasia Drilling Company Limited, the leading onshore and offshore drilling service provider in the CIS, announces today that Dragon Oil plc, an international independent oil and gas exploration, development and production company, has awarded a three year contract to BKE Shelf (a subsidiary of EDC) for the provision and management of jackup rigs NEPTUNE and MERCURY in the Cheleken Contract Area, Turkmenistan in the Caspian Sea.

The new build NEPTUNE drilling rig is expected to be available in early 4Q 2013 and will provide well drilling services for nine months; the second new build MERCURY drilling rig is anticipated to be available in 4Q 2014 and will provide well drilling services for the remainder of the term.

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, commented,

“We are very pleased to have been awarded a multi-year contract by Dragon Oil for our new-build jack-ups NEPTUNE and MERCURY. The award marks continuation of our successful cooperation with Dragon Oil and expands our work scope in the growing Caspian Sea market that offers significant exploration and development potential.”



EDC Group: First Half Financials – Revenue Up 7.6%

Thursday, August 29th, 2013

Eurasia Drilling Company Limited, the leading onshore and offshore drilling service provider in the CIS, today released its Interim Consolidated Financial Results, prepared in accordance with US GAAP, for the six month period ended June 30, 2013.

The reviewed 2013 Interim Consolidated Financial Statements for the six months ended June 30, 2013, and the Management Report on 2013 Interim Period Results, can be found under the following link: www.eurasiadrilling.com/financial_information.html

1H 2013 FINANCIAL HIGHLIGHTS:

– Top line revenue up 7.6% to US $1,695 million (1H 2012: US $1,575 million);

– EBITDA increased 17.0% to US $441 million (1H 2012: US $377 million);

– EBITDA margin amounted to 26.0% (1H 2012: 23.9%);

– Net Income increased 14.8% to US $217 million (1H 2012: US $189 million);

– Earnings per share (basic/diluted) up 14.7% to US $1.48 (1H 2012: US $1.29);

– Capital expenditures for property, plant and equipment were US $179 million (1H 2012: US $282 million);

– In April 2013 the Company placed its debut Eurobond, due in 2020, for the amount of US $600 million with coupon rate at 4.875% per annum;

– Net debt as of June 30, 2013 was US $527 million (December 31, 2012 net debt position was US $395 million); and

– Dividends paid for the year ended December 31, 2012 amounted to $0.70 per share.

-  In 2012 we changed our revenue recognition policy from units-of-delivery method to the percentage-of-completion method. This change was prompted by our intention to convert from US GAAP to IFRS next year. Prior periods have been adjusted to conform to the current period presentation. For full disclosure refer to our interim consolidated financial statements as of June 30, 2013 (unaudited), available on our web-site.

W. Richard Anderson, EDC’s Chief Financial Officer, commented:

“The first half of 2013 demonstrated another solid set of results for EDC. This reflects our leading position in the world’s second largest oil field services market. All of our key financial metrics improved in the first half of 2013, including our EBITDA and EBITDA margin, both of which expanded to record levels. Such outstanding results are driven by higher total metres drilled period-over-period with the continued shift towards high-value complex drilling and sustained cost control efforts by our management team. The first half of 2013 was also marked by our debut Eurobonds placement which received a very high level of interest from fixed income investors and an upgrade to ‘BB+’ with a stable outlook by S&P. As we move further into the rest of 2013 and beyond, we expect to continue to meet our financial and operational targets.”

1H 2013 OPERATIONAL HIGHLIGHTS:

– Drilling output was up 5.9% to 3.039 million metres, compared to the output achieved in the corresponding period of 2012 (2.871 million metres);

– Horizontal metres drilled was 492 thousand, an increase of 19.6% from the corresponding period of 2012;

– Exploration drilling volumes increased by 12.8% during the first half of 2013 compared to the corresponding period of 2012;

– Sidetracking activity remained at strong levels with 119 well sidetracks performed during the first half of 2013, an increase of 16.7% from the corresponding period of 2012;

– The share of our largest customer, LUKOIL, amounted to 57% of our total metres drilled during 1H 2013 (1H 2012: 56%);     however overall LUKOIL drilling volumes increased by 7.3% for the same period;

– The share of Rosneft, our second largest customer, was 24% of our total metres drilled (1H 2012: 27%);

– Our market share was approximately 29% based on metres drilled onshore in Russia during 1H 2013;

– During the first half of 2013 our ASTRA jack-up rig was employed in Russian waters of the Caspian Sea;

– Our SATURN jack-up rig continued its operations for PETRONAS Carigali (Turkmenistan) Sdn Bhd in Turkmen waters of the Caspian Sea; during 1H 2013 one geological sidetrack was 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;

– Fabrication of our third and fourth new-build jack-ups, NEPTUNE and MERCURY, continued on schedule during the first half of 2013.

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, added:

“The Russian drilling market continued to expand in the first half of 2013 in line with our expectations. Our strong backlog in Russia onshore together with significant investments made to our rig fleet and employees enabled us to continue to outperform the market and generate solid results, which I’m very pleased to report. As we anticipated, the demand for more complex drilling continues to be strong as we help our customers to achieve their production targets. Horizontals account for 16% of our total drilling volumes in the first half of 2013 and we expect that to continue to increase. Our offshore business continues to deliver outstanding results as our jack-ups are committed for multi-year work. We are delivering an excellent level of growth across our operations and we are, therefore, optimistic for the rest of the year and committed to delivering strong results in line with our expectations.”



EDC Announces New Senior Appointments

Thursday, August 1st, 2013

Eurasia Drilling Company Limited, the leading onshore and offshore drilling service provider in the CIS, today announces two important appointments to its senior management team.

Atle Løge, has been appointed Vice President, Business Development of EDC.

Atle has 27 years experience of the oilfield services sector. He joins from Baker Hughes where he had held senior field operational positions across Europe, the Middle East, Asia Pacific and Africa as well at the company’s headquarters in Houston. Prior to joining EDC, Atle was Vice President for Baker Hughes’ Drilling and Evaluation in Russia   Caspian Region. He has extensive experience in international operations, product marketing and remote start-up.

Tom O’Gallagher, has been appointed Vice President, Marketing and Investor Relations of EDC.

Tom has 34 years experience of the oilfield services sector. He joins EDC from Schlumberger, where he had worked in field operations, line management, engineering & technology and sales & marketing. He has been based in the Middle East, the Far East, the North Sea, the USA and Russia. Tom has a degree in Electrical & Electronic Engineering from University College Dublin and is a Chartered Engineer.

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, commented,

“We are delighted to welcome Atle and Tom whose experience and knowledge of international best practice will further strengthen our management team. Our strategy is to continue providing excellent service to our customers and to grow the business both organically and through acquiring value-creating assets. Atle and Tom will have an important role in developing the dialogue with our stakeholders and I wish them both every success in their important new roles.”



EDC Announces New LUKOIL Framework Agreement

Tuesday, April 2nd, 2013

Eurasia Drilling Company Limited  announced today that it has signed a new long-term framework agreement for onshore drilling and completion operations with OAO LUKOIL.

The new framework agreement, which concludes on December 31, 2015, defines pricing methodology and minimum work volumes (metres drilled) for exploration and production drilling in Russia. Pursuant to the new agreement, EDC’s services will be provided either on a general contractor basis (per metre basis) or day-rate basis depending on the complexity of drilling. In addition, a management steering committee will be established comprising of members from LUKOIL and EDC. The committee will review all aspects related to drilling complex wells as defined by the new framework agreement.

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, commented,

“We are pleased to have signed a new framework agreement with our largest customer LUKOIL, which further reinforces our already strong relationship. This agreement reflects both LUKOIL and EDC’s mutual interest to continue our long-term cooperation as this is our third long-term framework agreement since 2005. The agreement’s objective is to ensure that our customer achieves its three year onshore drilling plans in the most efficient way, which EDC is well positioned to deliver. The agreement provides EDC with a strong and predictable base for growth which will support our financial and operational targets.”

Source



Eurasia Drilling Signs new LukOil Contract with Net Income Up 35%

Tuesday, April 2nd, 2013

Russia’s top oilfield services company Eurasia Drilling (EDC) said on Tuesday its 2012 net income jumped 35 percent, year-on-year, to $382 million on strong demand from oil firms fighting output declines at depleted fields.

* Net income rises 35 pct to $382 mln in 2012

* EBITDA up 31 percent to $790 mln

* Revenues rise 17 percent to $3.2 bln

* Says signed new deal with LUKOIL on drilling and production

The company also said it had signed a new agreement with Russia’s second-largest oil producer Lukoil for onshore drilling and completion operations, running through to the end of 2015.

EDC’s London-traded shares rose more than 2 percent in early trade.

The group’s revenues increased 17 percent to $3.2 billion last year, while earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 31 percent to $790 million, slightly above prior guidance.

“Outstanding performance in all our business segments enabled us to achieve another year of record financial and operational results in 2012,” Alexander Djaparidze, EDC’s chief executive officer, said in a statement.

As Russia’s biggest driller, EDC reflects trends throughout the oil industry, which is struggling with declines in West Siberia and is faced with the cost and risk of developing new reserves in remote Eastern Siberia and the Arctic.

The potential for the company is seen in so-called ‘tight’ oil production, which may add around 2 million barrels per day to total Russian oil production, the world’s largest at 10.46 million barrels per day, analysts estimate.

New tax incentives for hard-to-recover oil are due to be implemented next year.

In January the company said its total metres drilled rose 26.6 percent to 6.05 million metres in 2012, a record result for Eurasia Drilling, after Russian oil companies stepped up operations.

As a result, the company’s Russian market share rose to around 29 percent last year from 25 percent in 2011.

Source



Eurasia Drilling Financial Results

Thursday, August 25th, 2011

Eurasia Drilling Company Limited, the leading onshore and offshore drilling service provider in the CIS, today released its Interim Consolidated Financial Results, prepared in accordance with US GAAP, for the six month period ended June 30, 2011.

The reviewed 2011 Interim Consolidated Financial Statements for the six months ended June 30, 2011, and the Management Report on 2011 Interim Period Results, can be found under the following link:

http://www.eurasiadrilling.com/financial_information.html

1H 2011 FINANCIAL HIGHLIGHTS:

  • Top line revenue was US$ 1,265 million for the 2011 Interim period, up 47% compared to US$ 862 million earned during the corresponding period of 2010;
  • EBITDA was US$ 267 million for the 2011 Interim period, up 29% compared to US$ 206 million earned during the corresponding period of 2010;
  • EBITDA margin was 21.1% for the 2011 Interim period, which is below the EBITDA margin for the same period in 2010, which was 23.9%;
  • Net Income was US$ 151 million for the 2011 Interim period, up 44% compared to US$ 105 million earned during the 2010 Interim Period;
  • We paid dividends for the year ended December 31, 2010 in the amount of $ 0.31 per share;
  • Capital expenditures for property, plant and equipment for the six months ended June 30, 2011 were US$ 215 million compared to US$ 119 million for the corresponding period of 2010;

Mr. W. Richard Anderson, EDC’s Chief Financial Officer, commented,
“We are delighted to have delivered such strong results with significant increases in revenues, EBITDA, net income and EPS. This reflects our leading position in the high growth Russian market where we deliver enhanced service and production efficiency.  Although it involves higher levels of joint development with external partners, which affects EBITDA margins, the successful development of our horizontal drilling business provides an important strategic growth opportunity. We are delivering an excellent level of growth across our operations and we are, therefore, optimistic for the rest of the year and committed to delivering strong results in line with our expectations. “

1H 2011 OPERATIONAL HIGHLIGHTS:

  • • Drilling output for the 2011 Interim Period was 2.325 million meters, 18% above the output achieved in the same period of 2010, which was 1.975 million meters;
  • In April 2011 we completed the transaction with Schlumberger to exchange assets and to enter into a Strategic Alliance in the CIS;
  • Drilling assets acquired from Schlumberger contributed 8 percentage points to the growth of our drilling volumes during the 2011 Interim period;
  • Horizontal meters drilled during the first six months of 2011 more than doubled compared to the corresponding period of 2010 and amounted to 365 thousand meters;
  • Exploration drilling volumes were up 9% during the Interim period of 2011 compared to the corresponding period of 2010;
  • Reduced our reliance on our largest customer during the first six months of 2011 with its share comprising 54% of our total drilling volumes compared to 60% in the corresponding period of 2010;
  • Construction of new jack-up drilling rig by Lamprell to be used in our Caspian Sea operations continues on schedule;
  • Our ASTRA jack-up rig was fully employed in Kazakh and Russian waters of the Caspian Sea; two wells were drilled;
  • Our Trident 20 jack-up rig drilled one exploration well and performed one sidetrack operation for our client, Petronas Carigali, in Turkmen waters of the Caspian Sea;
  • Continued operations on LUKOIL’s Yu. Korchagin field platform in the Caspian Sea, drilling three horizontal development wells;

Dr. Alexander Djaparidze, EDC’s Chief Executive Officer, added,
“The Russian onshore drilling market continues its rapid growth with 11% higher drilling volumes in the first half of 2011 compared to the same period in 2010. EDC is outpacing the market, showing 18% growth. In the offshore business the addition of the Trident 20 jack-up rig and a good performance from our existing operations combined to double revenue in the segment during the period. EDC is uniquely positioned through its size, its cooperation with Schlumberger and financial strength, to support our customers in achieving their goals. This will become especially important as we enter the new tendering season for 2012. We will continue to follow our strategy of international expansion, pursuing value adding acquisitions where appropriate.”







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