OOO Burovoya Kompaniya Eurasia (BKE) is the largest onshore drilling contractor in Russia
EDC is the largest independent oilfield service company in Russia.
We have more than trebled meters drilled and quintupled USD revenues since 2005 and have more than doubled EBITDA margins over the same period, allowing us to grow USD net income by a factor of over 12 times.
Our investment case is predicated on the following six key factors:
We have built a market leading position in one of the world's leading oilfield service markets. We have achieved this by focusing on process and service innovation, by investing in our rig fleet and our people and by concentrating on what we do best.
Our core market environment is less volatile than other major drilling markets globally, as the contractual model in Russia favours longer-term agreements with our key customers.
EDC currently enjoys multiple growth opportunities:
- Core market - the maturity of Russia's producing provinces and the Russian government's desire to at least maintain current oil production will require ever more aggressive drilling and we believe this provides underlying market volume growth of 5% to 10% p.a. in our core onshore market in Russia up to 2014.
- Greenfield - declining prospectivity in Russia's mature brownfield regions is spurring exploration and development in the more remote, more challenging greenfield regions and these require more advanced equipment and more complex solutions, for which our younger, heavier rig fleet and expert rig crews are ideally suited.
- Offshore - we have built a leadership position in the Caspian Sea jack-up market, owning four of the five available jack-up rigs. While short term demand is low at $40 to $50 dollar oil price, we believe demand will return in the future.
- International - we see excellent opportunities to expand in the MENA region, a market with many parallels to Russia, chiefly via acquisition. We have 4 rigs in northern Iraq which are currently idle due to low oil price and security risks.
Higher value for our customers
The core to our success has been our focus on delivering the best solutions to our customers. We operate in an increasingly competitive market and we believe that investment in our rigs and our crews and development of partnerships with best-in-class service providers has significantly enhanced the customer proposition.
EDC has long experience of driving operational efficiencies, doubling EBITDA margins since our formation. We have increased metres drilled per crew per day by 60% since 2005 and have one of the best health and safety records in the industry. We constantly strive for greater efficiency, seeking to improve rig utilisation, minimize downtime and LTI.*
* Lost Time to Injury
Commitment to strong shareholder returns
Our leadership position, substantial growth prospects, focus on improving efficiency and prudent financial management will allow us to continue to deliver strong returns to shareholders. We are committed to retaining a strong balance sheet, allowing us to safely navigate volatile financial markets while giving us the flexibility to take advantage of opportunities that may arise to grow the business in a value accretive way.