Energy service technology company Enteq said in a trading update on Thursday that a market recovery had resulted in revenues above expectations for the financial year just ended, and adjusted EBITDA in-line.
The AIM-traded firm said the development of its ‘SABER’ technology was still on-track, with sufficient cash to take it through to commercialisation in 2022.
It said the West Texas Intermediate benchmark oil price per barrel rose from around $63 at the start of its financial year last April, to around $92 in March, with the North American active rig count steadily increasing through the year from 430 to around 670.
International recovery in active rig counts started to increase around six months after the North American market, as expected.
Enteq said its reported revenue for the second half of the year ended 31 March would be in the region of $4.9m – a “significant increase” over the $2.3m achieved in the first half.
Revenue for the full year would 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,” the board said in its statement.
“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 was expected to be $0.3m, in-line with expectations.
The company said the gross margin reflected a sales mix now including an increase in revenues relating to third-party technology partnership agreements.
Its cash balance as at 31 March was $4.9m, down from $5.3m at the end of September and $8.1m a year earlier, reflecting the scheduled on-going investment in technologies throughout the year, primarily the SABER development.
Enteq said testing had demonstrated that SABER’s steering concept could generate sufficient steering forces to perform effectively.
Therefore, the “simple and lower cost-to-operate” system had the potential to offer efficiency improvements and to “disrupt” the current market.