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AKITA Drilling Ltd T.AKT.B


Primary Symbol: T.AKT.A Alternate Symbol(s):  AKTAF

AKITA Drilling Ltd. provides contract drilling services, primarily to the oil and gas industry, in Canada and the United States. The Company is an oil and gas drilling contractor with a fleet of about 32 drilling rigs. Its United States fleet is supported out of its operations base in Midland, Texas and consists of 13 high specification AC triple rigs, one high specification AC double rig and one DC triple rig, all serving the Permian Basin. With a fleet of 17 rigs, its Canadian division operates in Alberta, British Columbia, Saskatchewan, and as market conditions dictate, the Yukon and the Northwest Territories. The Canadian division operates both wholly owned rigs and rigs. Its Canadian division primarily operates in the oil sands, heavy oil regions and in the Montney deep gas basin. In addition, the Canadian division plays a role in drilling potash and other energy transition targets, including carbon capture wells, hydrogen storage wells and geothermal wells.


TSX:AKT.A - Post by User

Comment by Hockeyzon May 29, 2024 1:42am
120 Views
Post# 36061641

RE:RE:RE:RE:RE:RE:RE:RE:RE:Akita Drilling Ltd. Price Target Raised to C$3.75/Share

RE:RE:RE:RE:RE:RE:RE:RE:RE:Akita Drilling Ltd. Price Target Raised to C$3.75/Share

To me, the Xtreme purchase in 2018 by Akita was very good/timely. Firstly, one of the only ways for Akita to expand into the US was to buy a US driller like this, at only a 32% premium to its then current 2018 share price. Would Akita shareholders sell for a 32% premium now? I am sure not. And Xtreme was already set up in the US with offices, locations, customer base, etc. If Akita were to buy 13 rigs like Xtreme’s, but brand new at $25M each, that would be $325M and would take years to build and would have had to be paid with cash, not shares. And it would have no infrastructure set up in the US. In fact, it is the Xtreme shareholders who have taken the biggest hit, since they received shares of Akita as payment at over $7/share and now they are under $1.50/ share.  Because Akita paid in shares, the Xtreme purchase price is much lower now since the Akita share price is down by $5.50 ($7.00 - $1.50). In fact the Xtreme purchase by Akita is now $122.3M (22.24M shares X $5.50/share) lower than the $211M paid for Xtreme, or $88.7M. Seems like a great deal for new Akita stock purchasers.

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