Tuscany International Drilling Inc T.TID

Do no expect too much in Q3.....

[dbeaude]

They had at least four rigs worth of margin that will not be in the GM verses Q2. They may have lost more contracts.....who knows. However, they are one of the go to names in a number of SA countries and have a rig fleet with an average age of less than 5. They have a very good management team and BOD and the netbacks for SA producers are based of of Brent and are high. More and more countries want to acelerate exploitation of their natural resources. They will have a solid 2013 and with the margin improvement activities they are working on like buying back rental equipment (which I was told was worth at least $15 million of gross margin improvement which will flow right to the bottom line. This initiative alone has earnings value of over 4 cents a share of earnings. Their growth will have to be postponed for a while until they get their rigs all contracted and their margins and expenses optimized. If they can just accomplish these three things, I beleive they will generate around $100 million of EBITDA in 2013. If they can accomplish this, their debt to EBITDA will be great reduced to just over 2 times which is very acceptable and they would easily be able to pay the $52 million of debt repayment each year and leave another $50 of EBITDA to resume solid growth.

I hope they have found some homes for the 6 rigs they have available.and are waiting to update during the Q3 MD&A. To simplify the solution to Tuscany's current dilemma.....contract the rigs and keep utilization at that level and the EBITDA will look after itself.

[dreaddogs]

as per raymond james comments...two new contracts....we are in q4 right now...that is what i am thinking. q3 events have already been factored into share price....