Fitch: Eurasia Drilling view to stable

Fitch Ratings said it affirmed Eurasia Drilling Co. Ltd.’s long-term foreign- and local-currency issuer default ratings at BB and revised the outlook to stable from negative.

Fitch said the stabilization of the outlook follows a material reduction in Eurasia Drilling’s leverage in 2016 and the expectation of a further reduction in leverage in 2017-2019, stable demand for drilling services from Russian oil companies, improved free cash flow (FCF) in 2016 driven by significant capex flexibility and the absence of dividends, as well as improving customer diversification.

The agency said it does not incorporate any potential upside from Schlumberger's announcement of the purchase of a 51% stake in the company into Eurasia Drilling’s ratings until the transaction is approved by the Russian authorities and closed.

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