MOSCOW, October 26, 2009 - Eurasia Drilling Company Limited(“EDC” or the “Company” - LSE: EDCL) today released its operational and
financial update for the nine months period ending September 30, 2009.
Dr.
Alexander Djaparidze, EDC’s Chief Executive Officer, commented,
“EDC
continues to perform well in our rapidly changing market.Although the drilling volumes for our largest
client are down 25% from the amount drilled in 2008, we have successfully
replaced much of this lost work such that our overall drilling volumes are down
only 7% through the first nine months of 2009.We are pleased that management has been able to materially increase our
productivity this year which has resulted in continually improving EBITDA
margins during the nine months and further strengthened our already solid
financial position.The Company
continues to deliver remarkable operational performance, as follows:”
NINE MONTHS 2009 OPERATIONAL
HIGHLIGHTS:
Achieved
drilling output of 2,900,309 meters for the first nine months of 2009, 7%
below the output achievedin the
same period of 2008 (3,120,550 meters);
Improved
crew efficiency to 109 meters per drill crew per day;
Retained our dominant market position in Russia
with approximately 26% market share (based on meters drilled);
Remained active in the Caspian Sea, as the ASTRA jack-up rig completed its
second well in Kazakhstan this year, and began drilling in Russian waters
in the 3rd quarter; and
Further
diversified our client base, with our largest client now comprising just
over 62% of our total drilling volume.
Mr.
W. Richard Anderson, EDC’s Chief Financial Officer, added,
“Our
revenues in ruble terms for the nine month period of 2009 were consistent with
our performance in 2008 when adjusted for the decrease in meters drilled in
2009 and for the depreciation of the ruble against the dollar for the two
periods.Our cash balance increased
during the most recent quarter as did our net cash position and free cash
flow.During the nine month period, we
finished our previously announced stock buy-back program, resulting in a
material increase in shareholder value from the program.Our financial health remains unassailable,
leaving us in a position to take advantage of any inorganic growth
opportunities which might arise. Consistent with its strategy for growth and
its aim to strengthen its market position, the Company considers acquisition
opportunities on an ongoing basis.”
NINE MONTHS 2009 FINANCIAL
HIGHLIGHTS:
EBITDA margin was above 23% for the nine months
period ended September 30, 2009;
Top line revenue was US$ 334 million for third
quarter 2009, and US$ 1,007 million for the nine months ended September
30, 2009;
During the first nine months of 2009 the Company
repaid US$ 72.4 million in debt according to its terms in the
ordinary course of business;
During the nine month period the Company
completed its share buyback program and now holds 12.588 million shares in
treasury, increasing shareholder value by approximately US$ 150 million
(based on the difference between the closing price of the shares this past
Friday when compared to the average price per share paid during the
buyback program of approximately US$ 4.70 per share); and
The average exchange rates experienced in the third
quarter and the first nine months of 2009 were 31.3 Rubles per US Dollar
and 32.5 Rubles per US Dollar, respectively.
outlook
We expect drilling volumes in Russia
for the full year 2009 to remain below the record levels drilled in 2008.Our current backlog for calendar 2009 is around 3.775 million
meters, or approximately 7% below 2008 volumes. We expect our full year EBITDA margin to be
above 23%. Assuming no acquisitions, Capital Expenditures for the year will
be US$ 90 million or less.
Reminder:
EDC will host a conference call for
investors and analysts to discuss Third Quarter 2009 results on Monday, October 26, 2009, at 4:00 p.m. GMT
(London time).Equivalent times for
other locations: 5:00 p.m. Central Europe, 7:00 p.m. Moscow, 12:00 noon New York.
Participants can dial in on the day
of the call on UK Tel: +44 (0) 207 162
0025 or US Tel: +1-334-323-6201 (Passcode: Eurasia Drilling Company), but
are encouraged to pre-register for the call using the link below.Pre-registered participants will avoid any
queues on the day of the call.
Each pre-registering participant will
be allocated the conference call number, a participant user PIN, conference PIN
and instructions on how to join the conference call.For security purposes, participants are
advised not to give out their conference details for others to use.All participants must register individually
if they wish to join the call.
Replay of the conference call audio
will be available on Tel: +44 (0) 207 031 4064 or Tel: +1-954-334-0342 (Access
Code: 849056) through Monday, November 02, 2009 (until midnight, GMT).
***
EDC is the largest provider of
onshore drilling services in Russia, as measured by the number of meters
drilled, providing onshore integrated well construction services and workover
services. In addition, the Company provides offshore drilling services in
the Caspian Sea. The Company offers its onshore integrated well
construction services and workover services to local and international oil and
gas companies primarily in Russia and its offshore drilling services to Russian
and international oil and gas companies in the Russian, Kazakh and Turkmen
sectors of the Caspian Sea. The Company is traded on the
London Stock Exchange under the symbol “EDCL”.
Some of the views expressed in this
document may constitute “forward looking statements” that involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
