Revenue / day Total Energy reported after the close yesterday.
Every drillers is a different beast but so far every one of them seems to be
reporting the same thing.That is, soft utilisation in Q4 but good day rates.
Let see what we get when Akita reports.
From what i can see Akita utilization in the USA are going to be down
and may be slighly higher to flat in Canada.
Total showed a loss of 19 cents in Q4 but there was a special item (Tax expense)
Had not been of that they would have shown a EPS of about 45 cents.
Total get only 1/3 of their revenue from the drilling side so not entirely
comparable to Akita.Still, i am encouraged by the revenue side showing strenght.
At the beginning of 2023, Akita started the year with $93.5m in LT debt.
Their primary goal is to get it to $50m.After 3 quarter it's down to $74.4m.
From the info. i got from IR, i think the end goal is to be once again a debt
free company.
Getting to a debt free company would add after tax profit of about $6m
or 15 cents more to the EPS.This is not negligible for a comapny that trades at
$1.80
In the Permian the drilled uncompleted wells(DUC) are way down.With the
natural depletion of about 6% in the shale, if E&P don't start drilling soon,
we will see lower production sonner than latter.Yes, with the new technologies they can extract more but at one point in time there is a limit to all of that.
You don't drill, you don't find and in the end you produce less.
My investment in Akita is not predicated on Q4 results but more on a
12 to 24 month huge improvement in their balance sheet and because of the underlying HUGE UNDERVALUATION of their assets.
I my mind, it is clear that today's buyer will be rewarded big time in 12 to 24 months.
Nice weekend to all.
Here are the Total Energy revenue numbers on the drilling operation
and it’s outlook.
Q4 2023 vs Q4 2022
Rev. / operating days CDN $27,162 vs $24,751 + 10%.
Rev. / operating days USA $30,483 vs $28,270 + 8%
Outlook
Industry conditions remain relatively stable. Oil and natural gas producers continue to be measured in their drilling and completion programs as they pursue acquisition opportunities and execute shareholder return strategies. While recent North American natural gas spot market price weakness may adversely impact near term natural gas drilling activity, the pending completion of several LNG export facilities is expected to provide relief to the North American natural gas market.