Enteq Upstream PLC results highlight stability whilst adapting to challenging

() has highlighted its stability with its interim results, thanks to its rapid response to the challenges in its markets amidst the pandemic and lower crude oil pricing.

The specialist oil and gas services firm noted that international diversity has increased, with non-US sources now accounting for some 74% of revenue versus 42% in the same period a year ago.

Specifically, it has seen growth in China and the Middle East.

It has, however, seen challenging market conditions in the United States and in its outlook said that it expects the region will remain subdued for the medium term, but, outside the US the company is finding increased demand for its services. This will be further boosted driving by technology, Enteq noted.

READ: Enteq’s overseas business wins boost revenue

“2020 has dramatically changed the market for Enteq,” said chief executive Martin Perry in the results statement.

“The USA land shale drilling market has significantly reduced with on-going over capacity likely. Outside North America, despite the effects of oil price uncertainties and COVID-19, Enteq has succeeded in developing a strong customer base in China and the Middle East with good further opportunities.

“New technology will drive the efficiency of future drilling in all markets, and Enteq has some exciting product release plans which have the potential to change the scale of our business.”

Perry added: “A rapid response to the market challenges through reducing overheads whilst maintaining investment in our new product engineering has given Enteq stability, supported by a secure cash balance.”

The results showed Enteq ended September with US$8.8mln of cash.

Revenue for the six-month period amounted to US$2.6mln, down from US$6.5mln, while underlying earnings (adjusted EBITDA) remained positive at US$0.1mln, albeit down from US$1.5mln, while the loss after tax widened to US$0.7mln from US$0.5mln.

Board changes

Separately, Enteq announced upcoming board changes via its successions plan with founder and chief executive Martin Perry moving to the non-executive chairman role from April 2021.

Andrew Law, currently commercial director, will become the company’s chief executive.

Current chairman Iain Paterson will remain on the board as a non-executive director, Neil Hartley will be the senior independent non-executive director and David Steel will continue on the board, under the title of chief financial officer.

“In a further response to the contraction of the USA land drilling markets in 2020, the Board has chosen to restructure in order to match the scale of the executive management to the current operations while continuing to address growth opportunities,” Paterson commented in the statement.

“Andrew Law, who is well qualified and proven in the business, will drive forward the on-going strategy for development and commercialisation of our innovative new technology as well as continuing his success in establishing new geographical markets and customers for equipment outside USA.

“Martin will continue to support Andrew, whilst also reviewing strategic growth opportunities with further support from the considerable industry and financial experience of Neil Hartley,” he added.