AGM Trading Statement

RNS Number : 1127A

Enteq Technologies PLC

21 September 2022

 

Enteq Technologies plc

("Enteq" or the "Company")

AGM Trading Statement

Enteq Technologies plc (AIM: NTQ.L) 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 the offices of finnCap Group plc, 1 Bartholomew Close, London, EC1A 7BL.

The trading period to date has seen a slight softening in the relatively high oil price seen at the start of April, but despite this the oil companies have still generated significant positive cashflows. This is reflected in the increased number of active North American drilling rigs during the period, rising from approx. 700 at the start of April to approx. 760 currently. In this climate however a number of new competitors have emerged in the Measurement While Drilling (MWD) market space, many as a result of spin-offs created during the previous down-turns. The market for Rotary Steerable Drilling equipment remains strong, with significant growth forecast.

The demand for Enteq's MWD products has remained constrained with continued erosion of margins. The revenue in the first six months of this financial year is likely to be similar to that seen in the second half of the previous year.

The international MWD market continues to see a muted demand compared to pre-COVID levels. Of particular note is that the level of activity in the Chinese market remains at a low level; there is no sign of an increase in the near term.

The Board's current evaluation of the full year revenue and profit generation from MWD products is below previous expectations. Enteq continues to evaluate changing business models in order to maximise cash generation.

SABER, the unique Rotary Steerable Drilling product, based on IP from Shell and subsequent Enteq developments has now successfully passed all stages of passive testing. Field trial systems are currently in manufacture, albeit slightly delayed due to supply chain challenges. As a result the revenue expectations from SABER will be delayed from previous expectations. A full active drilling test site has been booked in Norway and commercial agreements for field trials, initially in the Middle East, are being concluded with the expectation of commercial operations closer to the end of this calendar year.

Enteq continues to invest in the final engineering phases and build of the first operational SABER equipment and, in order to ensure that there are sufficient resources to fund the working capital for additional growth, a number of sources are being considered from existing assets.

The Company plans to release its interim results for the six months ending 30 September 2022 on 16 November 2022.

Andrew Law, CEO, commented:

"The future of Enteq, through the commercialisation of the SABER product, is extremely exciting as we move to address the significantly larger and growing RSS market.

Continued achievement of the test milestones for SABER have given us further confidence in the SABER product and we are looking forward to the active drilling testing.

The management of the cash to ensure we can fully take advantage of this growth opportunity is of key focus."

For further information, please contact:

Enteq Technologies plc                                                              [phone]

www.enteq.com

Andrew Law, Chief Executive Officer

David Steel, Chief Financial Officer

finnCap Ltd (NOMAD and Broker)   [phone]

Ed Frisby, Emily Watts, Tim Harper (Corporate Finance)

Andrew Burdis, Barney Hayward (ECM)

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

END

 

 

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