2009 Annual Report - Rompetrol.com

Rompetrol Well Services
2009 Key Achievements:
• maintain profitability rate despite the decline of the well services
market;
• well cementing, sand control and acidizing technologies were
significantly improved by investing over $ 5 million;
• maintain its market share in Romania in terms of a very competitive
environment.
Rompetrol Well Services (RWS) offers a wide range of specialised
services for the oil and natural gas wells.
The year 2009 marked a sharp decrease of the Rig count and well
services activity both in Romania and internationally due to the
global economic downturn and the relatively low crude oil price. The
average worldwide Rig count dropped by 31% compared with 2008,
while in Romania the average Rig count plunged from 19 to 8 units.
The total volume of well services dropped in Romania by 37% in 2009
versus 2008 and the drilling related services dropped by 58%.
In such market environment, the revenues of Rompetrol
Well Services were negatively influenced compared with the
achievements of the year 2008 which was the peak year in the
recent history of Rompetrol Well Services.
The overseas activity of the company has suffered also a significant
contraction caused by the economic crisis. The revenues of the
Kazakhstan Branch fell heavily and other important overseas
activity of the company was recorded in Turkey and Northern Iraq.
However, the company managed to maintain its profitability rate
of over 17% and to uphold its market share in Romania, for the
whole range of services, by constant technological improvements.
The main financial results of the year 2009 were: total revenues of
over $ 22.5 million, operational profit (EBITDA) of over $ 6.6 million
and a Net Profit of almost $3.9 million.
RWS continued its technologies and equipment upgrade program
under the motto “constantly learn and develop”. In 2009, the
technologies upgrade program had put the emphasis on Sand
Control, Cementing and Acidizing services.
In this regard, a new Sand Blender equipped with the latest
monitoring and automatic control device was acquired. Also,
the company put into production a very advanced Twin Pump
Cementing Unit capable to achieve output performance suitable
for a large range of processes. The equipment used for carrying
and discharging of dry cement has been modernized through the
acquisition of six new high capacity Bulk Trucks. Furthermore, the
Acidizing services were thoroughly modernized by the acquisition
of a combo unit for acid transport and pumping.
In 2009 the company extended its personnel training, primarily
done through in-house tuition programs, to ensure maximum
benefit from the implementation of new technologies.
For the year 2010 it is expected a slow recovery of the Romanian oil
and gas industry. Nevertheless, RWS plans to increase its revenues
form the services provided in the domestic market by at least 6%
versus the revenues achieved in 2009.
In Kazakhstan, the Company will focus on the development
of a medium and long-term cooperation with KazMunaiGaz
and KazMunayGas daughter companies aiming to provide an
increasing amount of cementing and other special services in the
main oil and gas fields operated by KazMunaiGaz. Simultaneously,
the Company wish to continue and develop its business in the
Balkans, especially Bulgaria and Turkey.
RWS plans to continue modernization of its operational
technologies by a planned capital expenditure of over $2.5 million
and estimates to achieve a ratio of 55% equipment less than 5 years
of age by the end of 2010. The investment program is focused on
the upgrade of cementing, acidizing and sand control services.
The company will define the main steps for the future
development of the Enhanced Oil Recovery (EOR) services,
according to the long-term development plan, with the aim to
start the implementation of several projects in close cooperation
with its main customers in Romania.
Evolution of the main Financial Figures
(thousand USD)
2008 2009
2009 Annual Report 37
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
41,918
� Gross Revenues � Net Profit
Client Structure
Domestic market
Overseas
Drilling
Contractors
4.16%
Kazakhstan
7,262
9.1%
Others
69.32%
Independent
Operators
Turkey
17.42%
Iraq
22,574
Romgaz
Petrom
3,848