Utilisation
Plenty of conjecture and supposition on this board these days. The overall tone seems to be one of optimism. I don't want to rain on the parade but there a couple large question marks that haven't been addressed in CC, NR or this forum. Firstly utilisation...which we all know has been in the shitter for over a year. The big question is why? Is it a depressed market that they operate in or is it the competition they face. Everyone has been assuming (based on Walter's own words) that the utilisation rates would improve but they haven't. I'm questionning whether TID has a decent customer base. Obviously the company has been mismanaged for quite some time and It's pretty hard for the customers to be unaffected by that. How can we be sure all these outstanding receivables are not based on disputes over performance.
I mention this only because TID will burn through that $35MM DIP loan in short order if they are not getting income at decent margins.
Another thing that keeps me up at night...the net asset value which so many of you are relying upon. That number can be reported as just about whatever TID wants it to be. They are probably following GAAP and writing down the asset values by percentage x/annum based on the lifespan of the equipment. I would suggest that if 18-26 used drilling rigs came on the market today, the value of them will be signifcantly lower than what TID has on it's books. The equity we are all praying for may not exist.
I'm not trying to be a gloomy Gus here, but during the last two trading halts this forum was glowing with optimism but history has shown that the news is, and will continue to be bad. Better to prepare for the worst, which in my case is kissing my $10,154.45 goodbye.
Popps, you seem like a nice guy and you have contributed some good commentary but I think you are throwing your money away.