OREANDA-NEWS. Eurasia Drilling Company Limited ("EDC" or the "Company" - LSE: EDCL), the leading onshore & offshore drilling service provider in the CIS, today announced its consolidated financial results for the year ended December 31, 2013, prepared in accordance with US GAAP.

2013 FINANCIAL HIGHLIGHTS:

Top line revenue up 8% to US ,488 million (2012: US ,237 million);

Adjusted EBITDA up 19% to US 0 million (2012: US 0 million);

Adjusted EBITDA margin up to 26.9% (2012: 24.4%);

Net income up 13% to US 2 million (2012: US 2 million);

Net income margin up to 12.4% (2012: 11.8%)

Capital expenditure US 8 million (2012: US 0 million);

Net debt as of December 31, 2013 was US 7 million (December 31, 2012: 5 million);

Cash flow from operations amounted to a record US 1 million (2012: US 2 million);

In April 2013 the Company placed its debut Eurobond, due in 2020, for US 0 million with a coupon of 4.875% per annum;

Dividends declared for the year ended December 31, 2013 were .92 per share (2012: .70 per share).

W. Richard Anderson, EDC's Chief Financial Officer, commented:

”2013 was another year of consistent growth in line with our financial and operating objectives. The sustained strength in the underlying fundamentals of the Russian drilling market coupled with stable commodity prices led to further increases in demand for our services. We continued our investments in technology, people and facilities to support our customers and deliver on their ever more challenging drilling programs. With net debt to EBITDA of only 0.4 at the end of 2013 we retain a very strong financial position. Our track record, expertise and technology give us confidence in the future even in light of the current uncertainties.”

2013 OPERATIONAL HIGHLIGHTS:

A record 6.264 million metres drilled onshore in 2013; a 3.5% increase on 2012 (6.051 million metres);

Horizontal metres drilled in 2013 were up by 50.3% to 1.296 million metres;

Exploration drilling volumes were down 10.2% in 2013 compared to 2012 as the industry focused more on improving the productivity and efficiency of existing production and development;

The share in total drilling volumes of our largest customer, LUKOIL, with whom we operate on the basis of a three-year framework agreement (concludes December 31, 2015) remained flat at 57% during 2013;

The contribution of ROSNEFT to our total drilling volumes was also flat at 24%, while GAZPROMNEFT's share increased to 12% from 10% in 2012;

Our market share remained stable and amounted to approximately 29% based on metres drilled onshore in Russia during 2013, according to CDU TEK data;

During 2013 the ASTRA jack-up rig operated for LUKOIL and CMOC in Russian and Kazakh waters of the Caspian Sea, drilling three wells over the period;

The SATURN jack-up rig continued its operations for PETRONAS Carigali (Turkmenistan) Sdn Bhd (Petronas) in the Turkmen waters of the Caspian Sea; during 2013 two wells, each with two geological sidetracks, were completed and drilling commenced on a third well;

Five wells were drilled and completed on LUKOIL's Yuri Korchagin field platform in the Caspian Sea including three extended-reach horizontal development wells;

In September 2013, Dragon Oil awarded EDC a three year contract for the provision and management of jack-up rigs the NEPTUNE and MERCURY in the Cheleken Contract Area, Turkmenistan in the Caspian Sea;

The NEPTUNE jack-up underwent final commissioning in 3Q 2013, and moved to the drilling site to commence drilling for Dragon Oil in accordance with contract terms;

Construction of our fourth new-build jack-up, MERCURY, continued on schedule during 2013. Assembly of its first modules began in a shipyard in the Caspian Sea.

OUTLOOK

The fundamentals of the Russian OFS markets remain strong as most E&P companies have continued to deliver on their capex budgets. Demand is growing for more complex drilling solutions with new technology and heavy rigs and we expect the share of horizontal drilling in our portfolio to grow by 15% in 2014. Our customer mix onshore will continue to evolve, and we expect to increase significantly our activity with LUKOIL and GAZPROMNEFT, while activity with ROSNEFT is expected to decline. During 2014 we expect 80% of the onshore drilling rigs deployed by ROSNEFT to be reallocated to other customers at what should be satisfactory terms, while the remaining 20% will continue to work for ROSNEFT for the full year. Due to the depreciation of the ruble and a significant increase in rig redeployment in early 2014, we expect a decrease in our revenues compared to 2013 and our EBITDA margin to be unchanged vs. guidance given on January 28, 2014 with growth returning in 2015 and beyond.

Dr. Alexander Djaparidze, EDC's Chief Executive Officer, added:

“Our focus on further developing our operational capabilities and delivering improved performance to our customer base has enabled EDC to maintain strong momentum in all of our business segments and generate record results in 2013. We continued to benefit from a positive economic environment with our leading market position enabling us to exploit opportunities. In 2013, the Russian OFS market experienced strong demand in horizontal drilling from the continuing shift towards more complex well designs. We managed to outperform the market for more complex drilling having increased the amount of horizontal metres drilled by 50%. Our offshore division secured a three year contract with Dragon Oil in the Caspian Sea for our NEPTUNE and MERCURY jack-up rigs which was an important strategic development. We enter 2014 in an excellent position to deliver on our strategy and achieve our goals, while at the same time securing attractive returns for our shareholders. 2014 is shaping up to be a year of consolidation as we adjust our client mix and face the business risk environment in the coming months.”