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ADES International sees oil price rally feeding through to rig activity

Ades expects “a marked improvement in global supply-demand dynamics"
oil rig
Jack-up rigs work in shallow water

Oil rig owner ADES International Holding PLC (LON:ADES) expects the recent uptick in oil prices will lead to higher tendering activity and hire rates.

The Egypt-based group has just completed the acquisition of three jack-up rigs from US group Nabors.

READ: ADES International adds to firepower with US$140mln Saudi facility

That will increase the size of its jack-up fleet to thirteen rigs and make it one of the largest operators in the MENA (Middle East North Africa) region.

Mohamed Farouk, chief executive, said the new rigs would boost revenues in the second half of 2018.

Turnover in the first three months was US$41.2mln, which was down 15% on this time a year ago but 7% higher quarter-on-quarter.

Rig utilisation rates were 77% with a contract backlog of US$396mln.

“The build-up of our backlog is one of our main pillars for growth, which we are delivering by developing long-term relationships with our existing clients as well as actively participating in tendering activity to acquire new ones,” said Farouk.

He also expects the recent rally in oil prices to feed through into “a marked improvement in global supply-demand dynamics and a resulting upward trajectory in day rates and tendering activity”. 

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