Getech ready for big growth in Russia

The Leeds-based group said that with the oil price relatively stable at $100 a barrel, several big oil companies are making enquiries about its Russian research.

Getech, which was spun out of the University of Leeds, sells complex geological and geophysical data to help oil companies including Shell, BP and Exxon Mobil decide where to sink new wells.

Getech’s chief executive Raymond Wolfson said the group is seeing a lot more interest in Russia.

“I think the volume of business in Russia is set to increase fairly significantly,” he said. “We are looking at areas of the world where there are large oil resources to be found. A lot of the traditional areas are relatively unstable. Russia is more stable than a lot of other places.”

Getech, which has exclusive rights to these Russian aeromagnetic and associated interpretation products, said the order with the major oil company is worth over £200,000.

Professor Derek Fairhead, president and founder of Getech said: “I believe this first sale in 2011 reflects the increased international interest in exploration activity in this relatively stable part of the world.

“This agreement, together with the exclusive marketing agreement for Iraq data announced last December reinforces Getech’s position as one of the leading providers of exploration data to the world’s oil industry.”

Mr Wolfson added that Iraq has settled down recently and as the country with the world’s fourth largest oil reserve, Getech is keen to expand operations there.

Saudi Arabia has the biggest oil reserves in the world, followed by Canada, Iran, Iraq and Kuwait. Russia is eighth behind the United Arab Emirates and Venezuela.

Getech is considering resuming acquisitions after reporting a strong recovery from the downturn, buoyed by the surging oil price.

The company returned to the black earlier this year, making pre-tax profits of £294,000 in the six months to the end of January, compared with £392,000 losses a year earlier.

Half year sales more than doubled to £2.65m from £1.17m in 2010.

“We put new acquisitions on hold through a period when our share price was low,” said Mr Wolfson. “We are ambitious to pick up on the opportunity to build the company over the next few years.”

“The strong message coming through is that oil companies want to spend on our studies,” he added.

In December, Getech won permission to sell data which maps Iraq and Tibet. “All the analysts see there are huge resources to be found in Iraq,” said Prof Fair-head.

“These two new agreements provide further evidence of our global reputation and pre-eminence in the field of gravity and magnetic data as used for exploration purposes,” he added.

“We are particularly pleased to have completed the Iraq data agreement as this follows several years of relationship-building and it has been completed at a time when the exploration potential in Iraq is of increasing interest to our clients”

Getech signed a data marketing agreement with the Geological Survey of Iraq (Geosurv), which won approval from the Iraqi government to enter into the agreement.

The deal gives Getech exclusive rights to market gravity and magnetic survey data held by Geosurv.

The company said this data provides substantial coverage across the whole of Iraq – except Kurdistan where such surveys have not taken place.

“(It) represents a major addition to Getech’s global data library,” said the company.

“Iraq is currently an area of major exploration interest and the directors believe that these data will generate significant revenue from 2011.”

Mr Wolfson said: “Iraq is one of those areas that has a lot of potential.”

The data gatherer

Getech traces its roots back to the University of Leeds’s Department of Earth Sciences, now part of the School of Earth and Environment, when founder Derek Fairhead collected gravity data for Africa in 1986.

This data was computerised to complete Getech’s first study, and it gradually gathered the data of 19 companies. It opened an office in Houston, Texas in 1996, and a limited company was formed in 2000 when Getech spun out of the university.

It floated on AIM in 2005, raising £3m.

Getech’s data spans all of the globe, from the oil-rich west coast of Africa to the largely untapped area of the Arctic circle.