With its new casing mill in Alabama, LS has a very bright future indeed, and perhaps a valuation well above the
.40 offer.
The new casing mill, with an estimated capacity of 192,000 annual tons, began production in December 2011. The thermal treatment and end finishing facility for tubing products will be completed in January 2012.
This facility will add 67,000 annual tons of thermal treatment capacity and 55,000 annual tons of end finishing capacity for tubing products.
This facility will add 150,000 annual tons of thermal treatment capacity and 110,000 annual tons of end finishing capacity for casing products.
Cash costs are expected to be amongst the lowest in its sector.
The current lack of sufficient thermal treatment and end finishing capacity in the market illustrates the importance of Lakeside’s vertical integration strategy and will enable Lakeside to become a full-service provider of thermally treated and end finished OCTG products.
By moving towards self-sufficiency in thermal treatment and end finishing, Lakeside should return to strong profitability with fully finished products to meet customer demand.
Alboni owns nearly 20 % of the company, so his interests are aligned with ours.
The deal will go thru imo, otherwise they would not have cancelled their $22 million in debt refinancing.
I continue to buy on any weakness, as the earnings upside should be quite robust in 2012 and 2013 regardless of whether or not LS is taken over.
of NFC.