Rising oil price could see Getech return to buying trail

Leeds-based Getech yesterday returned to the black with 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 chief executive Raymond Wolfson. “We are ambitious to pick up on the opportunity to build the company over the next few years.”

Shares in the company edged up 1.6 per cent to close at 16.25p. Founder and president Professor Derek Fairhead said Getech hopes to issue paper as well as use cash to make acquisitions. It had £1.03m cash at the end of January.

“There’s quite a number of small consultancies out there that might be on offer,” he said. “To achieve (acquisitions) we have got to get our share price up.”

Getech sells complex geological and geophysical data to help oil companies including Shell, BP and Exxon Mobil decide where to sink new wells. “The strong message coming through is that they want to spend on our studies,” said Mr Wolfson. “The oil price has been very strong – it’s well above a level that’s a concern.”

In December it 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 Fairhead.

Getech said its full-year prospects depend on the “crystallisation of a number of deals”. Analyst Eric Burns at house broker WH Ireland said: “By any standard, Getech’s interim results are outstanding.

“This outcome reflects a substantial freeing up of exploration budgets on the back of a surging oil price... Given the substantial reduction in risk brought about by a strengthened balance sheet, we also revise our speculative buy rating to buy.”