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Enteq Upsteam increases revenues as international sales offset US shale

Growth outside of the US, especially in China and Saudi Arabia, helped offset the weak US market

Enteq Upstream PLC -

Enteq Upstream PLC (LON:NTQ), an oil drill technology specialist, increased revenues by 7% in the year to March 31, 2020, despite the industry's problems in the US shale area.

Sales in the twelve months rose to US$10.9mln (2019: US$10.2mln) with underlying profits 24% higher at US$3.1mln.

WATCH: Enteq Upstream reports strong international growth as it continues to invest in new technologies

Growth outside of the US, especially in China and Saudi Arabia, helped offset the weak US market, said the company, with non-US revenue now accounting for 30% of the total.

US revenues dropped to US$7.7mln from US$9.2mln as drilling activity stalled following the fall in the oil price to US$14 a barrel in March.

Enteq said it took swift action to counter the US downturn with the workforce there reduced by 60% and all discretionary spending cut. Directors are also now receiving a significant proportion of their remuneration in shares.

The company also took a write-down of US$7.3mln for products under development and stock to reflect the changed conditions. That meant a pre-loss for the year of US$7.8mln (US$0.2mln), it said, though it ended the financial year with a cash balance of US$10.2mln.

Martin Perry, Enteq's chief executive said that going forward the company would protect its cash position as well as maintaining investment in its rental fleet and in new technology including the development of a rotary steerable drill licensed from Shell.

“Even in a medium-term, reduced oil price, post-Covid-19, world there will continue to be a demand for hydrocarbons and increased efficiency in drilling will be needed for the industry,” he added in the results statement.

Quick facts: Enteq Upstream PLC

Price: 11.5 GBX

Market: AIM
Market Cap: £7.76 m

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