* Net income rises 35 pct to $382 mln in 2012
* EBITDA up 31 percent to $790 mln
* Revenues rise 17 percent to $3.2 bln
* Says signed new drilling, production deal with LUKOIL
* Horizontal drilling down 2 percent in 2012
By Vladimir Soldatkin
MOSCOW, April 2 Russia's top oilfield services
company Eurasia Drilling (EDC) said on Tuesday its
2012 net income jumped 35 percent year-on-year to $382 million
as oil firms fought output declines at depleted fields.
The company also said it had signed a new agreement with
Russia's second-largest oil producer Lukoil for
onshore drilling and completion operations, running through to
the end of 2015.
Last year, Lukoil accounted for 57 percent of the total
metres drilled by EDC, with state oil major Rosneft
its second-largest customer with 24 percent.
"For the next three-year period we've committed to drill 7.5
million metres. That's a minimum," Chief Financial Officer
Richard Anderson told a conference call about the Lukoil deal.
That is just down from 8 million metres drilled for Lukoil over
the last three years.
EDC's London-traded shares rose by more than 2 percent in
early trading before easing back to trade 1.4 percent higher by
The group's revenues increased 17 percent to $3.2 billion
last year, while earnings before interest, taxation,
depreciation and amortisation (EBITDA) rose 31 percent to $790
million, slightly above prior guidance.
"Outstanding performance in all our business segments
enabled us to achieve another year of record financial and
operational results in 2012," Alexander Djaparidze, EDC's chief
executive officer, said in a statement.
As Russia's biggest driller, EDC reflects trends throughout
the oil industry, which is struggling with declines in West
Siberia and the cost and risk of developing new reserves in
remote Eastern Siberia and the Arctic.
The potential for the company, which acquired Schlumberger's
Russian drilling assets in April 2011, is seen in
'tight' oil production, which may add around 2 million barrels
per day to total Russian oil production, the world's largest at
10.46 million barrels per day, analysts estimate.
New tax incentives for hard-to-recover oil are due to be
implemented next year.
SLOW HORIZONTAL DRILLING
Last year, the company was slow with horizontal drilling,
which is technically more challenging and more expensive than
conventional vertical drilling but taps hydrocarbon reservoirs
more effectively and yields better flows.
Companies mostly use the method to increase productivity at
mature fields, which account for over 80 percent of Russia's
total oil resource base.
EDC said horizontal metres drilled in 2012 were down by
about 2 percent to 862,000 metres.
"It was just that the company got more orders for vertical
drilling," Gazprombank analyst Alexander Nazarov said.
In January the company said its total metres drilled rose
26.6 percent to 6.05 million metres in 2012, a record result for
Eurasia Drilling, after Russian oil companies stepped up
As a result, the company's Russian market share rose to
around 29 percent last year from 25 percent in 2011.