Moscow, August 31, 2010

EDC Reports 2010 Interim Financial Results

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Eurasia Drilling Company Limited ("EDC" or the "Company" - LSE: EDCL) today released its Interim Consolidated Financial Results, prepared in accordance with US GAAP, for the six month period ended June 30, 2010.

The reviewed 2010 Interim Consolidated Financial Statements for the six months ended June 30, 2010, and the Management Report on Interim 2010 Results, can be found under the following link: http://www.eurasiadrilling.com/financial_information.html

Dr. Alexander Djaparidze, EDC's Chief Executive Officer, commented,

"During the first half of 2010 EDC continued to demonstrate remarkable operating and financial results provided by excellent execution of all lines and geographies of our business. Our drilling volumes have increased 2% compared to the corresponding period of 2009, despite the decrease of 3% in drilling volumes of our major customer. We managed to diversify our client portfolio by winning drilling contracts with TNK BP, Rusvietpetro and Pechoraneft and additional drilling volumes with Gazpromneft. The remaining part of the year looks very promising to us as we continue to focus on expansion of our offshore operations, expansion of our customer base by aggressively targeting new international markets, such as Iraq, and increasing our market share in Russia by targeting "smart" acquisitions."

1H 2010 OPERATIONAL HIGHLIGHTS:

  • Achieved drilling output of 1,974 thousand meters for the first six months of 2010, 2% above the output achieved in the corresponding period of 2009 (1,927 thousand meters);
  • Further diversified our customer portfolio by commencing drilling operations for TNK BP in May 2010;
  • Reduced our reliance on our largest customer in the first six months of 2010 with its' share comprising 60% of our total drilling volumes compared to 63% in the corresponding period of 2009;
  • Ordered five new rigs with delivery times commencing in October 2010 for expected onshore operations outside of the CIS and 2 rigs for our operations in Russia;
  • Employed fully our jack-up rig, ASTRA, in Turkmen and Russian waters of the Caspian Sea; three directional production wells were drilled and completed;
  • Continued our operations on LUKOIL's Yuri Korchagin field platform in the Caspian Sea where we drilled three wells;
  • Remained active with two drilling rigs in Kazakhstan; two wells were completed and another two drilled for the first six months of 2010;
  • Completed in March 2010 fabrication of our first 450 ton rig named "YERMAK".

Mr. W. Richard Anderson, EDC's Chief Financial Officer, added,
"Our first six months' 2010 results reflect revival in the overall drilling market as compared to the first six months of 2009. We continued to concentrate on execution backed by our investment in drilling rig fleet modernization and upgrade. We were able to further grow our margins and achieved an EBITDA margin of 23.9% for the first half of 2010. The results were also favorably affected by ruble appreciation."

1H 2010 FINANCIAL HIGHLIGHTS:

  • Revenue for the six months ended June 30, 2010 was US $862 million (1H09 Revenue was US $673 million);
  • EBITDA margin improved to 23.9% for six months period ended June 30, 2010 (1H2009 EBITDA margin was 21.9%)
  • Net Income for the six months ended June 30, 2010 was US $105 million (1H09 Net Income was US $78 million);
  • Net cash position (cash reduced by all debt) was US$ 219 million as of June 30, 2010 (December 31, 2009 net cash position was US $252 million);
  • Diluted earnings per share for six months period ended June 30, 2010 were US $0.81 (1H09 diluted earnings per share were US $0.57);
  • During the Interim Period of 2010 we paid dividends in the amount of US $213 million including a US $179 million special dividend on a treasury share sales transaction and a US $34 million dividend resulting from our successful 2009 operations;
  • Capital expenditures for six months ended June 30, 2010 were US $119 million including changes in restricted cash as compared to US $66 million incurred during the corresponding period of 2009;
  • The six months 2010 average US dollar exchange rate was slightly over 30 rubles as compared to slightly over 33 rubles in the respective 2009 period, a percentage change of 9.1%.

Conference Call Details

EDC will host a conference call for investors and analysts on Tuesday, August 31, 2010, at 3:00 p.m.BST (London time). Equivalent times for other locations: 4:00 p.m. Central Europe, 6:00 p.m. Moscow, 10:00 a.m. New York.

Participants can dial in on the day of the call on UK Tel: +44 (0) 20 8515 2302 or US Tel: +1-480-629-9645 and quote the Conference ID, which is 4350697, Conference title, which is Eurasia Drilling 1H10 Results Conference Call and Speaker's name to access the call. Toll free numbers are also available: in the UK 0800 358 0857, in the US 1-877-941-0844 or in Russia +7 495 580 9543.

Replay of the conference call audio will be available on UK Tel: +44 (0) 207 154 2833 or US Tel: +1 303 590 3030 through Tuesday, September 14, 2010 (until midnight, BST). Toll free numbers are also available for the replay of the conference call audio in the UK 0800 358 3474 or the US 1-800-406-7325. Access code to the replay of the conference call is 4350697#.

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EDC is the largest independent provider of onshore drilling services in Russia, as measured by the number of meters drilled, providing onshore integrated well construction services and workover services. In addition, the Company provides offshore drilling services in the Caspian Sea. The Company offers its onshore integrated well construction services and workover services to local and international oil and gas companies primarily in Russia and its offshore drilling services to Russian and international oil and gas companies in the Russian, Kazakh and Turkmen sectors of the Caspian Sea. The Company is traded on the London Stock Exchange under the symbol "EDCL".

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For further information, please contact:

Kim L. Kruschwitz, VP Investor Relations
+44 (0) 207 717 9707
investors.relations@eurasiadrilling.com

August 30, 2010

Some of the views expressed in this document may constitute "forward looking statements" that involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Next: 03 September 2010: EDC Reports 2010 Interim Financial Results - revised