GREY:EGDFF - Post by User
Post by
LTOWNERon Mar 02, 2012 9:59am
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Post# 19616790
Operation Update?
Operation Update? Energold could put out an Operation Update for 2011 soon, ahead of its Annual Earnings Report later in the month. Last year's Update came out March 4. We should see another new company record for meters drilled in 2011. Q4 is generally the slowest period of the mineral drilling season but demand in 2011 was very strong. Last year, Q4 meters drilled beat Q3. EGD is in a real sweet spot in its particular niche, with a shift taking place toward more "frontier drilling" plus the company is increasingly competitive in traditional drilling markets.
In 2012 Investors should also see the effects of EGD's Bertram acquisition, completed last July at approximately 2.5 x EBITDA. Bertram's Oil & Gas services in the oil sands will serve to diversify EGD's revenue mix and smooth activity levels over the November to April seasonal period when mineral drilling traditionally declines. "Based in Carbon, Alta., Canada, Bertram is a diversified specialty drilling company, servicing the energy sector in Canada and the United States. Bertram has a current inventory of 119 rigs specially designed for oil sands coring, shot hole seismic and geothermal drilling services markets. Bertram also provides diamond and pipeline drilling services."
Major Drilling (MDI) and Energold are both on a roll but EGD is not just a smaller version of MDI. Management of EGD has differentiated the company rather brilliantly, if successful, with the Bertram acquisition and the acquisition of Dando, allowing them to manufacture their own specialized drilling equipment. Not only can they respond more quickly to demand for services, the manufacturing plant could have a positive effect in lowering costs and increasing margins.
If earnings continue to hit record highs, EGD and MDI stock prices should do likewise. MDI posts 2011 results and a conference call Tuesday, which should provide guidance on the 2012 outlook for the industry. MDI's stock has been hitting new 52 week highs this week in anticipation.