Enteq Technologies plc (LON:NTQ) the energy services technology supplier, has announced a trading update for the financial year ended 31 March 2022.
Market recovery has resulted in revenues above expectations and adjusted EBITDA1 in-line. SABER2 technology development continues to be on-track, with sufficient cash to take it through commercialisation in 2022.
Trading Update
The North American benchmark oil price per barrel rose from around $63 in April 2021, at the start of the financial year to around $92 in March 2022, with the North American active rig count steadily increasing throughout the year from 430 to approximately 670 in March 2022. International recovery in active rig count started to increase approximately six months after the North American market, as expected.
Enteq’s reported revenue for the second half of the financial year will be in the region of $4.9m, a significant increase over the $2.3m achieved in the first half. Revenue for the full year ended 31 March 2022, will thus be in the region of $7.2m, ahead of the Board’s previous expectations.
The international market (excluding China) started to recover in the second half of the financial year, with equipment being delivered to a new customer in Central Asia. Since the beginning of the hostilities towards Ukraine, Enteq has not been doing business with Russia, with minimal business impact. A delayed recovery in China has been offset by an increase in revenues from North American activity.
Adjusted EBITDA for the year is expected to be $0.3m, in-line with expectations. The gross margin reflects a sales mix now including an increase in revenues relating to third-party technology partnership agreements. The cash balance as at 31 March 2022 was $4.9m ($5.3m as of 30 September 2021, $8.1m as of 31 March 2021) reflecting the scheduled on-going investment in technologies throughout the year, primarily the SABER technology development.
Technology Investment
Testing has demonstrated that SABER’s unique steering concept can generate sufficient steering forces to perform effectively. Therefore, this simple and lower cost to operate system has the potential to offer efficiency improvements and to disrupt the current market. The system has applications in geothermal, oil and gas and methane capture, with the oil and gas RSS market being over $1.9bn annually.
The SABER system is on-track for commercialisation during 2022, with existing resources in place to complete the remaining phase of the development project.
Enteq Technologies expects to announce its results for the year ended 31 March 2022 on 6 July 2022.
The financial information for FY22 included in this announcement is unaudited.
1 Adjusted EBITDA is reported profit before tax adjusted for interest, depreciation, amortisation, foreign exchange movements, performance share plan charges and exceptional items.
2 SABER (Steer-At-Bit Enteq Rotary Tool), a potential ‘game changer’ compared to current rotary steerable systems available, enables Enteq to enter the Rotary Steerable Drilling service market which has an estimated world-wide annual value of over $1.9bn in 2022, of which approximately 40% is accessible by the SABER Tool technology.
