Last checked at 29 Sep 2020 07:00
Enteq Upstream plc
("Enteq" or the "Company")
AGM Trading Statement
Enteq, the energy services technology and equipment supplier, will make the following statement at its Annual General Meeting which takes place at 12.00 noon today at St Mary's House, The Broadway, Amersham, Bucks HP0 7UT.
Enteq reports a satisfactory trading recovery from the mid-March 2020 oil price slump and the effects of COVID-19. Enteq's half year revenue and adjusted EBITDA are likely to be in line with management expectations.
Enteq continues to focus on sales opportunities outside its traditional North American onshore shale-based market. The proportion of revenue generated outside North America in the half year is expected to be approximately 75%, an increase from both 36% in the period to September 2019 and 21% for the second half of the year to 31 March 2020.
The North American market remains extremely subdued with the number of active drilling rigs continuing to fall from 1,025 at the start of April 2020 to the current level of 261, with resulting over capacity of equipment in the market. Enteq's rental revenue from the North American market is expected to continue until the current financial year end at reducing levels with limited renewals expected.
The majority of international sales in the first half of this year were into the Chinese market where strategic drilling for gas in challenging downhole conditions can be satisfied by Enteq equipment. The $1.0m contract announced in May 2020 to a new Chinese customer was fulfilled with the equipment successfully operated, and the customer has given an indication of further orders. The $0.9m contract announced in August 2020 to a new customer in Saudi Arabia has been delivered, however, the revenue will only be recognised by Enteq when the equipment completes the Saudi Aramco accreditation process.
The Rotary Steerable System development program that includes elements licensed from Shell continues to meet the project milestones, with prototype deployment scheduled for 2021. A high-speed data transmission project has also commenced with a partner based in Poland.
Cash balances have reduced from $10.2m at 31 March 2020 figure to $8.8m as of today, as Enteq continues to invest in engineering projects and working capital.
The Company plans to release its interim results for the six months ending 30 September 2020 on 12 November 2020.
Martin Perry, CEO, commented
"It is pleasing that Enteq continues to expand its market share and opportunities outside North America. The significant contract awards in both China and Saudi Arabia, demonstrate that Enteq's products continue to offer new customers a proven, cost effective and reliable solution for their drilling requirements. Investment in new and differentiated technology will enable Enteq to address a substantially larger sector of the world market."
For further information, please contact:
Enteq Upstream plc +44 (0)149 461 8739
Martin Perry, Chief Executive Officer
David Steel, Finance Director
Investec Bank plc (NOMAD and Broker) +44 (0)207 597 5970
Chris Treneman, Patrick Robb, David Anderson