Medserv PLC (MT:MDS) has started FY18 with a positive operating backdrop. Last week, ENI (MI:ENI) announced a lean gas discovery in Block 6 Offshore Cyprus. Meanwhile, the company has reported further success with its strategy to expand into new territories, with a three-year contract. We believe that building operational visibility in Cyprus while expanding internationally supports the potential for substantial revenue growth for 2018-20.
ENI is the leading offshore IOC operating in the Mediterranean and Medserv supports its drilling operations in Cyprus from its onshore bases in Larnaca and Limassol. The latest lean gas discovery announced by ENI offshore Cyprus is believed to be ‘Zohr-like’ in nature. Zohr, offshore Egypt, is the largest gas field in the Mediterranean currently. ENI has a 50% participation in Block 6 where the new find has been made and Medserv’s ILSS business recommenced support for the drilling programme in Q417. The new find should provide an extended drilling programme, providing greater visibility and improved returns from Cyprus.
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