RE:Question please Yes, aeco pricing is currently at $0.80Cdn. per gigajoule. But, as per the bottom chart in your link, Aeco futures pricing is ramping up to $3 in January’2025 and for the next 3-4 years (at least), aeco is in the $2.50 to $4.25 range. Again, this is due to LNG Canada coming on-line and taking excess natural gas out of the country, mainly overseas. So yes, those gas production companies geared more toward Aeco spot pricing will probably look at booking drilling rigs later in the year and could be required for years. But it could be too late if drilling companies become fully booked. Nevertheless, it will only add further to demand outstripping supply for drilling rigs near the end of 2024 and forward which will increase prices dramatically in the future.
When you say “this could slow down or delay the 11+ Canadian drilling rigs for Akita from August’24 forward”, I think what you are missing is that these 11+ Canadian drilling rigs have been BOOKED from August’24 forward by Akita, and looking more toward being fully booked judging from Precision Drilling, the Canadian drilling behemoth, already being fully booked. If any of these rigs are cancelled in this high demand environment, it would actually be a benefit for Akita, because Akita would get a cancellation fee. This could be millions in revenue with no offsetting cost. Furthermore, Akita would be able to easily re-book any cancelled drilling rigs.
Yes, Akita stock could go down more. But, it is near the 11 month low of $1.26 (a decrease of 4.5% from the current $1.32), but is well off the 11 month high of $1.99 (an increase of 51% from the current $1.32). How high could Akita go? 11 month high of $1.99 (51% higher) or 12 month analyst target price of $3.75 (184% higher) or even tangible book value of $6.73 (410% higher)? So the downside is reasonably about 10% and the upside is about 200%? At the current $1.32, you would be getting Akita near the 11 month low, which to me is a great entry point. Especially considering that the future has never looked brighter for Canadian drilling companies in the last 11 months. That is why Precision Drilling is trading close to an 11 month high.