RE:RE:Market cap 40m …. Implied value of deal 77m For disclosure I am not in CWC or ESN but I follow all of these service sector companies as my passion but I havent seen signs in 2022 or 2023 to jump back in. I waited for my data, Q1 and Q2 and I see lots of problems in this sector.
Look I think CWC and ESN were sold on surface at very cheap prices.
Studied CWC deal alot and ESN not as much and it is a bad sign for the sector.
CWC and ESN CEO must have good reasons. I never assume CEO are stupid. They have better informatin on the outlook than anyone. They know their service line well. and future outlook.
This is reality on drilling rig side. Too many rigs in Canada chasing too little work and the man power issue. But I think manpower side is overated.
CWC got sold dirt cheap but it only had 3 of 7 rigs working. ..all by red deer. Still too many companies with good double rigs sitting bidding on work.
Horizon is going to bid on cardium work, Ensign and Precision, Stampeder, Bonzana prob can do Pembina, and Savanna has alot of high quality doubles ready to go.and heck even Akita may bid and has the iron.
And Horizon prob to help with fixed costs will bid very low on work. They seem to be who cheap oil companies use for extra holes or work. This is hurting hurting everyone.
Reality is only good iron left that is available to be marketed. The junky singles are parked.
190-200 rigs in the fall isnt good enough for companies to have pricing power to pass on inflation well.
And then have overhead of all these offices and yards, with inflation on propery taxes to heating these buildings.
Techlogy improvements and less wells being needed has hurt the sector.
They got too good.
I dont think Precision bought CWC to make money on Canadian drilling side. CWC bids were low to get work.