August 30, 2012
The Buenos Aires-headquartered company is listed on the TSX Ventures exchange and this year has picked up assets in Colombia.
The company reported 2Q12 revenues were at their highest level ever, EBITDA was positive for the first time in a year and the Net Loss narrowed.
However, rig utilization was down to 42% from 82% in 2011 which the company attributes to an extended strike in the Barancabermeja area.
Other indicators — for example our Drill Rig Utilization report — confirm the weakness in that quarter and as of the end of June the country was not on track to reach its goals for exploration wells. Increasing security problems have played a role as have delays in environmental licensing. During the first half of the year companies were complaining about the National Environmental Licensing Agency (ANLA) but recently we are hearing better things.
Finally, the company announced that it will receive a number of key assets including three 550 HP drilling/workover rigs as part of the unwinding of its relationship with Petroland.
Bottom Line: Solid quarter although not clear how much Colombia contributed to performance. We met senior Estrella officials at a conference in January and it was clear that they were confident about Colombia but being challenged to consolidate their operations. The government stands by its drilling targets for 2012, despite falling short in the first half, which can only be good news for drilling services companies.