DRILLING contractor Archer has predicted an upturn in activity in the fourth quarter, but revenues next year are still likely to see a drop.
The Norwegian headquartered company, which has a base in Blackburn, near Aberdeen, recorded revenues of £705 million in 2019, but it is predicting a 10-15% decrease in 2020.
Its net debt should be reduced by £80m year-on-year, to around £380m at the end of 2020.
Third-quarter revenues totalled £140m and Ebitda before exceptional items came to £17m.
The firm was recently awarded contract extensions for 14 UK North Sea platforms which included a £78m deal with Apache.
Archer said activity would “increase in Q4 compared to Q3”.
Dag Skindlo, chief executive officer, said: “Despite the reduction in activity in the quarter, Archer continue to generate positive operating cash flow and to reduce its net interest-bearing debt substantially.
“The improved liquidity combined with the announced amendments to our loan facility enhances Archer’s financial flexibility going forward.”
He said the firm’s land-drilling operations in Argentina were hit by a government-imposed lockdown.
A modest increase in activity was experienced towards the end of the quarter.
Mr Skindlo added: “With the announced gas subsidy regulation in Argentina to stimulate local gas production, we expect the activity to increase going forward, and Archer is well positioned to benefit from the stimulation package.”
