Capital Drilling has said its low-cost drilling model is beginning to deliver results and gain additional contracts for its unutilised rigs.
The company, which is focused on the emerging and developing markets focused drilling company published its third quarter results, which revealed revenue at $20.8million, a third consecutive quarter of growth, but still down on the $23.6million from the same period last year.
The company made a further $8million debt repayment and maintained positive net cash position and robust balance sheet.
Rig utilisation remained stable at 34%
“Recent industry commentary suggests the significant and prolonged downturn of the global mining sector has now reached the bottom of its cycle and will go on to make a measured recovery. There is little indication, however, of a material improvement in the near-term,” the company said in a statement.
Throughout the quarter, market conditions and tendering activity remained subdued.
Capital Drilling’s strategic decision to deliver a low cost drilling model to broaden its client base, and maximize rig utilisation, has resulted in additional revenue and earnings including exploration drilling in Peru and Botswana.
Capital has also recently secured two additional contracts in Tanzania, specifically an exploration drilling contract with Magnis Resources, for one reverse circulation rig, and an underground rig for development drilling with AngloGold Ashanti at the Geita Gold mine.
The company said it remained focused on service delivery for its existing clients, which include large blue chip resources companies, together with mid-tier and juniors.
Chief executive Mark Parsons, said: “Trading remains in line with market expectations for the full year and we are in a stronger position for an upswing of the cycle. A large proportion of our business is secured by long-term contracts and a number of contracts are now expected to run for longer than forecast.
“Further, we are beginning to attract additional work with our low cost drilling model.”
Recommended for you
