Akita vs, Ensign vs Precision DrillingYesterday, Hockeyz did a very good analysis on a comparative basis between Akita and
Precision drilling that showed how deeply undervalued Akita is.
This morning, Ensign reported their results.If you do the same comparative analysis,
you will see how insane Akita's financial sand assets metric are at a HUGE BARGAIN
vs it's peers.
Yes, Akita is much smaller then these others two and some may say there should
be a discount because of that.
But not at the extent it is right now.The valuation between Akita VS ESI and PD are
at extreme levels.
One day, this chasm will shrink.
P.S. Ensign is seeing weakness in it's US California business.
Akita's has 15 rigs in the US. 14 rigs are all in the Texas Permian and 1 in New Mexico.
One of Akita's major customer is Occidental Petroleum(Warren Buffet is a major stock owner of OXY).
Here is some cut from the outlook of Ensign for 2024
OUTLOOK
Industry Overview
The outlook for oilfield services continues to be constructive despite volatile commodity prices and macroeconomic pressures. Geopolitical tensions and hostilities in areas of the Middle East and the ongoing Russia-Ukraine conflict continue to impact global commodity prices.
Constructively, the outlook for global demand for crude oil continues to forecast year-over-year growth. Furthermore, OPEC+ nations continue to monitor the oil markets and are expected to maintain moderated supply over the short-term. Global crude prices remained range bound over the fourth quarter and into the first quarter of 2024, due in part to the hostilities in the Middle East, with the benchmark price of West Texas Intermediate ("WTI") averaging US $78/bbl in November, $72/bbl in December, and $74/bbl in January.
Over the short-term, volatile commodity prices have impacted the industry rig count in North America and reinforced customer discipline with capital programs. Furthermore, there have been several recent oil and gas sector mergers and acquisitions ("M&A") in both the Canadian and the US operating regions that have impacted drilling programs over the short-term. Over the long-term, the Company expects customer consolidation to be positive for oilfield services activity and facilitate relatively consistent drilling programs.
In 2024, the Company expects positive oil prices to support relatively steady oilfield services activity in order to maintain or potentially grow production, especially so in consideration of well productivity declines and low drilled but uncompleted ("DUC") well inventory in certain producing areas in the United States. In addition, the Company remains optimistic regarding Canadian drilling activity with the completion of the Trans Mountain oil pipeline expansion project and the completion of the Coastal GasLink pipeline expected in 2024. In additional, several liquefied natural gas ("LNG") projects, including LNG Canada, are expected to support activity over the medium-to-long term.
Canadian Activity
Activity in Canada is expected to increase in first quarter of 2024 due to positive market conditions over the winter drilling months. In the Canadian market, additional pipeline capacity and general market conditions are expected to support positive activity in 2024.
United States Activity
United States activity, representing 58 percent of total revenue in 2023, declined modestly in the fourth quarter of 2023 compared to the third quarter of 2023 largely as a result of customer M&A activity and depressed activity in the Company's California region. Operations in California continue to be challenged as producers are currently working through drilling permit challenges that have impacted drilling programs over the short-term. The remaining areas of the Company's United States operations are expected to remain steady in the first quarter of 2024.