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Total Energy Services Inc T.TOT

Alternate Symbol(s):  TOTZF

Total Energy Services Inc. is a Canada-based energy services company. The Company provides contract drilling services, rentals and transportation services, well servicing and compression and process equipment and service to the energy and other resource industries from operation centers in North America and Australia. The Company operates through five segments: Contract Drilling Services (CDS), Rental and Transportation Services (RTS), Compression and Process Services (CPS), Well Servicing (WS) and Corporate. The CDS segment is engaged in the operation of approximately 105 drilling rigs. The rig fleet is supported by an extensive fleet of owned top drives, walking systems, pumps and other ancillary equipment. Its RTS segment is conducted from 15 locations in western Canada and three locations in the United States. The CPS segment fabricates a full range of natural gas compression equipment as well as oil, natural gas and other process equipment.


TSX:TOT - Post by User

Bullboard Posts
Comment by dismalscienceon Dec 16, 2003 6:06pm
58 Views
Post# 6789154

PP and share buyback

PP and share buybackThey were in a buyback period when they made the PP - the recent announcement is simply a continuation of the buyback plan. If you compare the average price of their share buybacks to that of the PP, what TOT is doing makes sense. They've bought back shares for less than they received on the issuance of new shares. Also, by cancelling the shares bought back, they reduce the dilutive effect of a new offering, making the latter more attractive to an underwriting syndicate and more acceptable to existing shareholders. If they simply cancelled the buyback and issued more shares in a sccondary offering to the market, they risk a sell off and consequent share price decline - at least that would be the likely short-term effect. A simultaneous PP and buyback strategy hedges against that risk. Other companies have done the same - e.g. Transalta last year I think. Anyway, I'm no expert on this - I'm just putting 2 and 2 together and getting 5! Just my take on it.
Bullboard Posts