Some replies from TID CEO...... Q: Is there a plan to reduce debt levels? ANS: There is a plan to reduce the debt levels. Last year we had a significant growth/capex program that consisted of new rig builds and two substantial acquisitions. Our goal through this growth was to keep our debt/EBITDA under 2.5 times. As we are now at the upper end of that range and as a result, we currently have a limited capex program and plan to use free cash to pay down debt.
Q: When is the release date for Q2 earnings? ANS:We plan to issue Q2 earnings in mid August…likely August 9th.
Q: Do you expect to be generating positive earnings soon? ANS: We hope to see positive earnings this year. We would have seen significant positive earnings last quarter if we had not had a hedging loss related to currency hedges required by our current credit agreement.
Q: When is your debt due? ANS: The vast majority of our debt is a five year term loan that was structured as interest only until the 4th quarter of this year at which time we will start to pay down principal.
Good prompt responses from management to my inquiries. One must consider the fact that the company was able to raise cash through debt as a junior is a vote of confidence from the banks on the viability of the company.
The question I did not ask and should have is "how is the utilization rate going in the Markets you operate in". North American drillers and frackers are getting hit hard because of the glut of natural gas in the US. I suspect that capex levels in South America and Africa which are based off of Brent and have much higher natural gas prices than US and Canada would still be robust.