OREANDA-NEWS. January 25, 2010. Eurasia Drilling Company (EDC) intends to raise drilling volumes by 4% YoY in 2010 to 3.9m meters. In 2009, the company’s drilling volume amounted to 3.75m meters, reported the press-centre of OTKRITIE Financial Corporation.

View: If EDC carries out its 2010 plan, it would increase drilling volumes almost to its 2008 level (c.3.8m), which would help compensate for the lackluster operating results posted last year (a 6% YoY drop of drilling volumes). We expect the total market for oilfield services (OFS) to rise by 2-5% YoY in 2010, with the price of oil as the key trigger for this market. In our view, EDC is likely to maintain its 26% share of the domestic drilling services market.

Valuation: Eurasia Drilling’s stock trades at a 21% discount on 2010 P/E (equal to 8.2x) to the rest of the oilfield service sector.

Action: We read this news as positive for EDC stock.