Last investor presentationsGEO did a couple of presentations in the last days, including LD micro and Riley yesterday, which might explain that a few people liked what they heard which would explain the pop.
A couple of questions in the Riley conference notably if GEO could recoup from clients the cost inflation (labor and consumables) from clients. According to Harper, they pricing power shifts to driller when they reach more than 50% utilization rate in the industry. It appears to be the case as per Harper.
As to GEO and West Africa : well, no drill available on the market (or it gets snapped as soon as it gets available), they are running at 70%, adding rigs. While the typical tendering process for a mining co to award a drilling contract would be to annonce the winner 2-3 months after tender closing, adding another month for mobilization, this has now changed to tender on friday, award on the following monday and mobilize on tuesday.
This reminds me of what the Foraco Ceo mentionned in a conference call on previous cycle when "customers would be fighting over rigs".
The next 3-5 years will be more than interesting as this is happenning quite soon in the cycle. Actually, last downturn was so vicious and prolonged, the rebound can be spectacular, a bit like Peter Lynch was mentionning in One up on Wallstreet when he was cheering for another bad quarter so the rebound would be even higher.
GLTA