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SciDev (ASX:SDV) share price surges 8% on this announcement

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The SciDev Ltd (ASX: SDV) share price has surged up today, after the company announced record quarterly sales in its United States oil and gas business.

At the time of writing, the SciDec share price is trading up 7.64% at 78 cents.

What’s moving the SciDev share price?

Investors are buying the water engineering company’s shares today, after it announced increased activity levels within its US oil and gas sector business.

It says that drilling activity continues to recover from the COVID-19 lows of the June quarter, and the company is continuing to win business, gain market share and grow revenue in the sector.

The second-quarter FY21 revenue from the oil and gas sector is now forecast to be approximately $4 million, ahead of the previous quarter of $3 million.

SciDev also said that activities in the Canadian oil-sands industry are on track with progress outcomes to be reported in calendar year 2021.

Commenting on this latest update, SciDev managing director and CEO, Lewis Utting, said:

SciDev, through our highland fluid technology (HFT) services, continue to see strengthening activity levels in the US oil and gas sector.

Our supply chains remain strong and customer demand is growing. Our investment in organisational capability during 2020 is yielding results, with HFT capturing an increasing amount of market share.

New contracts update

In today’s release, SciDev also announced that a purchase order from a major South Texas company for completion fluids has been extended, and the company is seeing an expansion of purchase orders from other existing clients.

It also said that a major European oil company has seconded HFT staff to provide product development for the new environmentally friendly oilfield performance chemistry. Several patent applications have been lodged with commercial activities now under consideration.

About the SciDev share price in 2020

SciDev develops chemistries and engineering solutions to help clients with a range of operational issues associated with water.

The company acquired the HFT business, which provides a range of water chemicals and professional services to the oil and gas sector, for $5 million in March this year.

In its latest quarterly update in October, the company reported a record $9.4 million in sales, which included $4.6 million in sales during September alone. 

The SciDev share price meanwhile, has had a volatile year, trading within a low-high price band of 280% – between 25 cents and 95 cents. 

However, the share price has now gone full circle and back to roughly where it started at the beginning of the year.

At the current share price, the company boasts a market cap of $117 million.

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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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