RE: totally leveraged to price of oilLeader is leveraged to the price of oil but in a different way than drillers. Drillers financial results are directly tied to the price of oil. But if oil drops $20, it doesn't directly affect the number of jobs that Leader gets. However if the price falls enough, drillers will slow down their drilling projects and that will lower the number of jobs and the price that Leader can charge.
I had a good talk with the IR at Leader. He is also on the board and is a CFA. He emphasized that mgmt is well aware of the dangers of debt and they are glad to have survived 2008-9. That is the reason they will not expand capex this year and use cashflow to pay down debt.
They intend to increase capex in 2012 after repairing the balance sheet.
Leader cannot control the price of oil but they can manage their balance sheet and increase their chances of weathering price volatility or unknown financial conditions.
As I stated before, I think Q2 will be relatively lower than previous qtrs because of the spring breakup. Q3 and 4 will be more indicative of Leader's capability going forward.