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Amedeo looks ahead to delivery of newly built rig

Stockbroker WH Ireland highlighted Amedeo’s good cost control against a challenging backdrop.
a jack up offshore drilling rig
Amedeo has US$4.15mln of cash.

Amedeo Resources PLC (LON:AMED) told investors it expects to deliver the recently completed Explorer 1 rig during the second half of 2016.

The physical build of the Explorer rig is currently going through the commissioning process.

With the delivery now on the horizon the group noted that winning further new orders had been difficult in the current market, but also highlighted that it does not expect the situation to continue in the medium term.

It added: “When the recovery does come, YZJ Offshore, having proved itself with Explorer 1 and with its capability to produce advanced, specialised and localised rigs as well as a range of other vessels, is well placed to take advantage of it.”

The group this morning released its financial results for the twelve months to December 31.

It reported a US$3.58mln loss for the year.

All group revenue, some US$128,000, came from the non-core MGR Resources iron ore marketing business. The MGR unit made a US$90,000 profit for the year, which saw depressed iron prices and challenging markets.

Group administration costs were reduced by 20% to US$651,000 for the year.

Amedeo said it ended the year with US$2.34mln of cash, and now has a balance of US$4.15mln.

Stockbroker WH IRELAND highlighted Amedeo’s good cost control against a challenging backdrop, and repeated a ‘speculative buy’ recommendation and suggested a ‘fair value’ of 45p per share.

“Amedeo remains well positioned to benefit when the cycle turns, particularly given its low cost capabilities,” the broker said in a note.

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