Enteq Upstream says XXT sales missed targets

Shares in Enteq Upsteam fell after it admitted sales from its XXT division have been lower than expected after a tightening of capital expenditure in the North America upstream market adversely affected the purchases of high value 'measurement while drilling' equipment.

Despite this, the firm feel there exists a good pipeline of sizeable opportunities exists which, when customer budgets are released, would deliver a strong recovery in sales.

Trading in KMS / Pro-Flow has been in line, with the utilisation of existing drilling equipment and demand for consumable products remaining high.

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First half roup sales which incorporate 4.5 months of XXT and two months of KMS / Pro-Flow sales were approximately $5.2m, with positive operating profits being generated from the acquisitions.

After group overheads which are appropriate to an anticipated increased scale of the business, it is expected that a net operating loss from continuing operations before exceptional items will be reported for the period.

Enteq has strong cash balances and, with the availability of the agreed revolving credit facility, the company believes it is well positioned to continue to deliver the planned growth strategy.

Chief Executive Officer Martin Perry said: "Enteq continues to progress the strategy of building a leading oil & gas products and technology business. Despite short term volatility in North American capital spending, the directors believe that in the medium term through a combination of acquisition, organic product line growth and geographic expansion some significant market share from a $30bn market can be achieved."

NR