ADES International, oil and gas drilling and production company, said it saw a strong operational performance in the first quarter as the company won new contracts and rig utilisation rose.
The company said revenue in the quarter ending March 31 reached US$108.7 million, up from $41.2 million in the year ago period.
Its profit margins were in line with expectations, ADES said without revealing a net profit figure.
Its cash decreased to $23.6 million with a net debt of $533.2 million as the company completed acquisitions from Weatherford in Algeria and Iraq for $72 million and also carried out planned capital expenditures related to the acquisitions.
“We delivered a strong operational performance in the first quarter of the year, significantly accelerating revenue growth which increased by almost threefold compared to Q1 2018,” said Dr. Mohamed Farouk, Chief Executive Officer of ADES International. “Our results were supported by the steady ramp up of utilisation rates and the increasing contribution from the 2018 acquisitions.”
ADES said it recorded utilisation rate of 92 per cent in the first quarter, up from 77 per cent a year ago. It also won its first deep water drilling services contract in the Egyptian Mediterranean Basin and renewed six contracts in Saudi Arabia for the recently acquired rigs from Weatherford for three years each. ADES also received two new contracts for new-build rigs in Saudi Arabia for a tenure of seven years each.
“ADES’ growing order backlog combined with improving end markets and higher utilisation rates provide significant growth potential and visibility, underpinning our confidence for 2019 and beyond,” Farouk said.
ADES secured new contracts in Algeria earlier this year for onshore rigs ADES 2 and ADES 3. The ADES 2 contract comprises one firm well and four optional wells and adds an estimated backlog of $ 8 million. The ADES 3 contract was signed for two years firm and one year optional and will add an estimated backlog of $19 million, the company said.
“Trading in Q1 2019 has been positive and with the addition of incremental revenues from the now completed Weatherford acquisition and new Algerian contracts, this will drive sequential progress during Q2 2019,” ADES said in a statement. “We are trading in line with current expectations for FY 2019 with strong revenue visibility underpinned by the contracted backlog.”