Edison Investment Research has issued a flashnote on Medserv plc following the company’s recent announcement of a significant contract win in a new geographical territory and the latest lean gas discovery announced by ENI offshore Cyprus.
Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and Asia Pacific.
The report issued by Edison highlights that these two announcements are supportive of Medserv’s operations and underpin the potential for substantial revenue growth going forward. As a result, their DCF-based fair value of the Medserv share price was revised to €1.64 per share. Preliminary results are scheduled for April 27.
Medserv started FY18 with a positive operating backdrop. Last week, ENI announced a lean gas discovery in Block 6 Offshore Cyprus. Meanwhile, the company reported further success with its strategy to expand into new territories with a three-year contract.“We believe that building operational visibility in Cyprus while expanding internationally supports the potential for substantial revenue growth for 2018-2020,” Mederv said in a statement.
ENI is the leading offshore international oil company operating in the Mediterranean and Medserv supports its drilling operations in Cyprus from its onshore bases in Larnaca and Limassol. The latest lean gas discovery announced by ENI offshore Cyprus is believed to be ‘Zohr-like’ in nature. Zohr, offshore Egypt, is the largest gas field in the Mediterranean currently.
ENI has a 50 per cent participation in Block 6 where the new find has been made and Medserv’s ILSS business recommenced support for the drilling programme in Q417. The new find should provide an extended drilling programme, providing greater visibility and improved returns from Cyprus.
“Meanwhile, we have made it clear that Medserv’s strategy is to develop its operations into new territories. The company announced on January 23 that it has secured business, via a competitive tender, in ‘a market, considered by the industry to be the big new energy source on Europe’s doorstep’.
The three-year €10m contract to provide integrated logistics support services for the production phase of offshore has an option to extend. Due to commercial considerations, the name of the international oil company has not been disclosed at this time,” Medserv said.
The full report may be viewed at: http://www.edisoninvestmentresearch.com/research/report/medserv234081/full as well as on the www.medservenergy.com