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Amedeo Resources eyes recovery in rig market

The Explorer 1 vessel is due for completion in the second half of this year, Amedeo said

“Although the rig market has slowed, we expect it to pick up in the medium term.

Amedeo Resources (LON:AMED) has told investors it expects the market for oil rigs to pick up in the medium term.

The AIM firm, which today released results for 2014, highlighted that during the period the New Yard operation on the banks of the Yantze was operational.

New Yard, a joint venture with Singapore-listed Yangzijiang Shipbuilding (YZJ), has been building the Explorer 1 rig and the vessel was launched into the water this April ahead of its full completion which is due in the second half of this year.

As well as Explorer 1, New Yard has also dealt with overspill workload from YZJ’s principal shipbuilding operation, building blocks for container ships.

Chief executive Glen Lau said that market conditions have slowed Amedeo’s progress, but, he expects a recovery in the medium term and at that point he believes the company will be well placed to benefit.

"YZJ Offshore's New Yard is fully operational,” Lau said. “The build of Explorer 1 is to quality and schedule, building the New Yard's reputation and laying firm foundations for the New Yard's future.

“Although the rig market has slowed, we expect it to pick up in the medium term.

“In any case, the New Yard is able to build a range vessels and blocks and is well placed to take advantage of any upturn.”

Amedeo today reported that pre-tax losses on ordinary activities narrowed by 53% to US$128,000 in the eleven months to December 31; this does exclude non-cash items and one-off items. The loss for the year was reported as US$1.4mln.

The company ended the period with US$2.9mln of cash and equivalents.

Revenues associated with the MGR unit, which the company provides with business and market services, totalled US$91,000.

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