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Thalassa Holdings Ltd

  • BY: Andrew Hore |
  • POSTED: 27/02/2013 |

A potential $50m contract for seismic services has prompted WH Ireland to increase its earnings forecast for Thalassa Holdings by 32% this year and by even more in the following year, thereby sparking a doubling of the share price. 

Statoil has signed a letter of intent for a contract that could be worth more than $50m over the next five years. There is even scope for contract extensions worth a further $35m. Thalassa will provide seismic acquisition equipment and services for permanent reservoir monitoring. The majority of the revenues will come from the services with less than $20m relating to the supply of the Dual Portable Modular Source System (D-PMSS). The equipment payments will be staged so Thalassa wil not require additional working capital. Thalassa has also gained a $500,000 contract in Ecuador.

The 2012 earnings forecast has been increased by 31% to 16.9 cents a share, while the 2014 figure has been raised by 52% to 21.3 cents a share. This reflects the fact that the lower margin equipment revenues will be in 2013.

The contract with Statoil is likely to make other oil and gas explorers take notice of the D-PMSS technology.

At 165p a share, up 93p, Thalassa is valued at 19.6m. The shares are trading on 12 times prospective 2014 earnings.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFFebruary2013_41.pdf

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