H1 Operational and Trading Update

RNS Number : 2667P

Enteq Upstream PLC

23 October 2012

 



23 October 2012

Enteq Upstream plc

("Enteq" or the "Company")

H1 Operational and Trading Update

Ahead of the interim results announcement for the six month period ended 30 September 2012 scheduled for 28 November, Enteq Upstream today provides an operational and trading update.

Enteq Drilling Tools Division

Enteq completed the acquisition of XXT in May 2012 and KMS & Pro-Flow in July 2012. These companies now form the core of the Enteq Drilling Tools Division.  Investment has been made in manufacturing capacity and engineering skills with the first combined product being released for the common customer base of North American directional drilling companies. Further down-hole data communication products are close to field trials.

XXT

As indicated in recent updates, in the short term a tightening of capital expenditure in the North America upstream market has adversely affected the purchases of high value Measurement While Drilling equipment. As a consequence sales from XXT have been lower than originally envisaged.

A good pipeline of sizeable opportunities exists which, when customer budgets are released, would deliver a strong recovery in sales.

KMS / Pro-Flow

Utilisation of existing drilling equipment and demand for consumable products remains high. Trading is in line with expectations and there is a strong order book.

Corporate Development

Enteq is looking to gain exposure to new customers outside North America and has recently made a senior appointment to assist with this. The finance organisation has also been strengthened in preparation for further expansion.

First-Half Trading

Group sales which incorporate 4 ½ months of XXT and 2 months of KMS / Pro-Flow sales are approximately US$5.2m.

Positive operating profits are being generated from the acquisitions. After group overheads which are appropriate to an anticipated increased scale of the business, it is expected that a net operating loss from continuing operations before exceptional items will be reported for the period.

Enteq has strong cash balances and, with the availability of the agreed revolving credit facility, is well positioned to continue to deliver the planned growth strategy.

Martin Perry, CEO commented 

"Enteq continues to progress the strategy of building a leading oil & gas products and technology business.  Despite short term volatility in North American capital spending, the Directors believe that in the medium term through a combination of acquisition, organic product line growth and geographic expansion some significant market share from a $30bn market can be achieved."

For further information, please contact:

Enteq Upstream plc	[phone]
Martin Perry, Chief Executive Officer
Ian Leaman, Chief Financial Officer
Investec Bank plc	[phone]
James Grace, Patrick Robb
David Anderson
Pelham Bell Pottinger	[phone]
Mark Antelme, Charlie Stewart

 

END

 

 

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