With the oil price having breached $140 a barrel and demand as yet undimmed by recessionary economic trends, oil service companies around the world are scrambling to reap the benefits from the quest to find new oil and gas deposits to develop. One with several balls in the air just now and striving for growth both organically and through potential acquisitions is GETECH Group, which has followed buoyant first-half results with two useful new marketing agreements in the former Soviet Union and the launch of two new studies of the Yaoudenni Basin in the West African state of Mali.

IP Group, a specialist backer of companies with intellectual property to commercialise, holds 20 per cent of GETECH, which has its origins in the 1980s in a research group headed by the company’s founder, executive chairman and 32 per cent shareholder, Derek Fairhead, professor of applied geophysics at Leeds University. Floated on AIM three years ago, the company, itself based in Leeds, supplies exploration data and oil systems studies and evaluations to oil companies and has lately been vying for new potentially advantageous deals.

GETECH, whose non-executive chairman Peter Stephens has a 2.8 per cent stake, insists that the commercial details of its latest agreements are strictly confidential. However, the company says the Russian marketing agreements cover studies of the Russian Arctic, to generate new oil and source rock geochemistry databases for four Arctic basins, as well as aeromagnetic studies of basins in the former Soviet Union, which should enable oil companies to evaluate their geometries ‘to a degree not previously possible’.

GETECH has also embarked on the Mali studies to provide both a geophysical analysis of the Yaoudenni Basin and information about the basin oil systems in Mali and Mauritania. The company, which lifted interim profits from £21,000 to £603,000 in the six months to January, says these deals, following recent successes in South East Asia, are not likely to make much immediate impact on the bottom line, but reflect new commercial relationships and augur well for the longer term.

Fairhead, whose reputation in this field has helped open doors for GETECH across the international oil industry, built a leading oil and mineral consultancy, supported by its stock of ‘unique’ global gravity and magnetic data. He and his colleagues were initially able to compile available gravity data for West and Central Africa and interpret it in terms of the distribution of sedimentary basins caused by the shift in tectonic plates that resulted in the break-up of South America and Africa 140 million years ago.

This provided a useful geological model for oil exploration, and GETECH began by compiling such data and interpreting it for large oil companies and then licensing out the material. Chief executive officer Raymond Wolfson, the former director of commercialisation services at Leeds University who took up his present post last year, explains that GETECH processes its gravity and other data into ‘digestible’ form, obtains the right to market it and then licenses it to oil companies.

The company carries out some specific interpretation and other jobs for industry clients, but its valuable ‘data brokering’ and licensing activities are its prime and most rewarding business, he maintains. ‘We have the biggest commercially available database in the industry,’ boasts Wolfson, previously a non-executive director, and ‘we want to sell it on’.

His appointment as CEO reflected GETECH’s desire to adopt a more commercial stance and accelerate its growth plans. Similarly, he says the company’s recent replacement of Landsbanki with WH Ireland as broker and nominated adviser was prompted by a wish to communicate more effectively with smaller company investors.

This new approach should be welcome. Profits so far have tended to be ‘lumpy’, as the above first-half figures showed.

In the year to last July, pre-tax profits slipped from £970,000 to £810,000, though WH Ireland analysts predict an up-tick to £880,000 pre-tax for 2007/08 and more than £1 million next year, as recent agreements start to pay off. With £1.6 million cash at the end of January, GETECH is also on the lookout for appropriate acquisitions.

The shares have proved a disappointment since flotation, reaching 56p in April 2006 before crumbling to 19.5p last March. They have since rallied strongly to 31p and could repay a purchase over the medium term.

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GETECH Group	AIM	£7.62m	27.50p	0.00p
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