Drill company sees brighter days ahead for industry

QUEENSLAND drilling outfit Mitchell Services is seeing clients increasingly wanting to use drills 24 hours a day, as the resources sector slowly recovers.

The customers also are askONLINE ing for drilling to start earlier in the year, the 63-rig business says.

“The worst and the bottom of the market is behind us,” Mitchell chief executive Andrew Elf said.

He was speaking as Mitchell posted a smaller full-year loss of $4.4 million, against $6 million in red ink from a year before. Losses on an earnings per share basis shrunk from 0.43¢ a share to 0.3¢.

Mitchell, which employs more than 200 staff, said earnings (before interest, tax, depreciation and amortisation) were positive at $2.2 million with 35 per cent of their fleet used. They anticipate more than 60 per cent will be used by the first quarter of this financial year.

Mr Elf said it was “early days” but some sites were using rigs 24 hours a day, seven days a week, as opposed to 12 hours a day. Some also wanted to start in January instead of April.

Revenue rose from $33 million to $40 million, and drilling prices remained 20-40 per cent below the highs of the past cycle.

Burrell Stockbroking analyst Bruce McLeary said the resources sector had issued positive reports for the reporting season.