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