RE:RE:New Press Release - GEODRILL ANNOUNCES RENEWAL OF NORMAL COURSE ISSUER BIDNo doubt, in my mind anyway, that the stock is undervalued and shareholders would benefit from buybacks. But the company needs to dedicate cash to add to the equipment base. I support the cancelation of dividends for this purpose.
Ending rig count for the last several quarters:
Q1-22 to Q3-23 - 80 - 81 (steady)
Q4-23 - 83
Q1-24 - 89
Over many historical quarters, there have been 4 or 5 rigs in the workshop. At the end of Q1-24, there are 9. A handful of these should soon be deployed and operational.
In the video, there is mention of the current rig count being increased to 90 and other good info such as record utilization.
With these larger contracts, gross margin won't be as high as it was in record years, but there is revenue certainty and with an increasing focus on having producers as customers, there will be less AR collection risk. Currently 4 rigs being rented so you can hope these are replaced with owned rigs to increase profitability.
All this points to increased cash flow in the coming quarters. NCIB might not be active until next year after the reinvestment in rigs slows down, but as long as profits increase, I don't mind - either should contribute to an increase in SP.