Archer Limited: Awarded strategic P&A contract and delivers record EBITDA
Hamilton, Bermuda (November 3, 2023)
Archer delivered record level EBITDA for the quarter, accomplished through the combination of solid revenue-growth and margin expansion resulting in improved credit metrics.
The outlook for the company remains positive, particularly as the decom and plug and abandonment (“P&A”) market is expected to increase substantially going forward. In August, we announced the Fulmar P&A contract which evidences Archer’s strategy to grow in this market.
Following the successful establishment of our Well Services division in the Brazilian offshore market, we were awarded a strategic contract with Petrobras to develop new proprietary technology for P&A of deep-water wells in Brazil. Successful development and commercialization of the method and tools will open up a large market for Archer.
Third Quarter 2023 Highlights
- Revenue of $303 million; up 26% YOY
- Adjusted EBITDA of $32.3 million; up 37% YOY
- EBITDA of $30.7 million, or 10.1% of revenue
- EBIT-margin of 5.5%, totaling $16.6 million
- On track to meet upper range of our financial guidance for 2023
- Adjusted net income of $ 3.7 million
On the strong performance in the third quarter, Dag Skindlo, CEO of Archer, comments:
“I am pleased to report another record level EBITDA for the quarter driven by growth in our Well Services division, improved performance in Platform Operations, slightly offset by an anticipated softer result in Land Drilling.
We see a high demand for P&A and decommissioning services going forward. The strongest activity and near-term increase in the decom market is in UK, where operators will spend an estimated $26 billion towards 2040. As evidenced by the integrated P&A Fulmar contract awarded to Archer in the third quarter, we are well positioned to service our customers to permanently P&A their wells. The global offshore decom market has grown considerably the last few years and is furthermore expected to grow by more than 100% over the next 10 years. This market, which only to a lesser degree is impacted by fluctuations in the oil price, will underpin profitable growth for Archer for decades to come. The permanent P&A of oil and gas wells is an essential activity to curb global emissions and protect the environment. Our goal is to industrialize the P&A process and spearhead innovation to cut operators’ costs globally.
We remain committed to promote industry-leading quality delivery and best in class health, safety and environment performance across all operations globally.
We continue to deliver on our strategy with both organic expansion and selective accretive bolt on acquisitions, which together will drive our business growth in terms of turnover, profitability, and shareholder value. As such, we are on track to meet the upper range of our financial guidance for 2023, which implies an EBITDA growth of close to 35%.”
Archer will host a conference call at 9:00 am CET on November 3, 2023. To follow the presentation, the following options are available:
A. Webcast
To register for the webcast please go to https://events.q4inc.com/attendee/991788945
B. Conference call
To access the call, which is open to the public, please dial in at the participant telephone numbers listed below. Please call in 10 minutes prior to the scheduled start time, and ask for the “Archer Third Quarter 2023 Earnings Release Call”
Participants dial-in:
- United Kingdom +44 20 3936 2999
- United States +1 646 787 9445
- Germany +49 32 221098334
- Norway: +47 815 03 308
- Access code: 043310
The operator will ask for your name and company. Following the presentation there will be a Q&A session. Information on how to ask questions will be given at the beginning of the Q&A session.
For additional information please contact:
Dag Skindlo, Chief Executive Officer | Mobile: +47 982 26 624 | Email: [email protected]
Espen Joranger, Chief Financial Officer | Mobile: +47 982 06 812 | Email: [email protected]
Joachim Houeland, Manager Treasury & Investor Relations | Mobile: +47 482 78 748 | Email: [email protected]
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)