RE:RE:RE:RE:RE:RE:RE:RE:Question please At the 2024 annual meeting in mid-May, Akita said they would be running at least 12 rigs in the U.S. for the 2nd half of 2024 and forward. Comparing the 10.56 average US drilling rigs Akita used in 2023 to at least 12 rigs for Q2’2024 forward, means adjusted US operating margins will increase by 13.6% (12 rigs/10.56 rigs), from $44.0M to $50.0M, an increase of $6.0M in profits just in Akita’s US operations. Add that to the $17.7M increased profits in the Canadian operations = $23.7M increase in total profits for Akita starting in Q2’2024. Net income would increase by $23.7M from $18.4M to $42.1M and earnings per share would increase to $1.05 per share. Also, instead of paying off $24M in debt like Akita did in 2023, they would be able to pay off more than $47M in debt.
As I said previously, yes, aeco Canadian pricing is currently low at $0.80Cdn. per gigajoule. But, 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. But, almost all the natural gas production companies that Akita deals with only have a small portion of their revenue geared toward Aeco spot pricing, and they usually can shut in production when it is low like it is currently and start production back up when prices improve, like they will by January’2025.