Pioneer Energy Services (PES) study case Pioneer Energy Services (PES) sees problems in Q3 2012 for the companies which are heavily dependent on their Canadian and US-based operations......This is why TID is an acquisition target:
Look what PES says in Q2 2012:
The company has minor diversification geographically as it targets primarily the offshore and onshore U.S. drilling market coupled with a small exposure to Colombia. This U.S.-focused strategy is an obstacle for the next few quarters as: "Due to low natural gas prices and increased competition for energy services in oil and liquids-rich basins, we expect to see moderate pricing and utilization pressure for Drilling Services in the third quarter, which should be partially offset by the impact of deploying our new-build drilling rigs".
Look also what an other driller MTL.TO (Mullen Group) says at the latest report...MTL.TO has also growth problems due to its North America focused drilling operations:
I quote:
Mullen Group's operating income of $70.4 million decreased by $10.7 million, or 13.2 percent, from the $81.1 million generated in 2011. The decrease in operating income was mainly attributable to the lower demand experienced by the Oilfield Services segment, particularly for those businesses tied to drilling activity. Operating income in the Oilfield Services segment accounted for $10.6 million of the decrease while Corporate costs accounted for $0.8 million. These decreases were partially offset by a $0.7 million increase in operating income generated by the Truckling/Logistics segment. This $0.7 million increase was a direct result of the additional revenue recognized in the Trucking/Logistics segment. As a percentage of consolidated revenue, operating income decreased to 21.0 percent as compared to 22.6 percent in 2011.
"Overall, Mullen Group's third quarter performance met our expectations. As we entered the quarter there were clear signs of decreased drilling activity in western Canada, the results of which translated into decreased revenue in our businesses tied to drilling".