James Telfser Precision Drilling PD-T COMMENT Jan 12, 2017

Still constructive, especially after Q2 reporting. US activity and nat gas remain weak. US investors are buying because Canada's oil & gas industry is very, very strong. LNG Canada is a huge catalyst. Sees $185 target, or 93% upside from here.

The drilling business like the oil price has come under pressure. Short-term, exploration/drilling could be slower, while pipelines will continue to thrive. There needs to be a real, systemic increase in the oil price, otherwise PD will be rangebound.

Is a lower-risk version of Ensign given its healthier balance sheet as reflected in his higher valuation

Remember to buy a sector when it looks terrible, not when it's up 80-90%  ;)

Still likes it but not as much, as drilling is weaker than thought. Selloff in oil, drop in rig count. More efficient drilling ultimately means less work. Continues to de-lever. Everyone's excited about natural gas. Massive exposure to nat gas in Canada, which has better dynamics than US. About a 3.7% weight for him.

More drilling 'should' result in more activity for the service sector, of course. PD is very cheap and seeing fundamental improvement. We would be comfortable in the $76 to $77 range. 
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Many oil and gas services companies under pressure, both here and in US. Concern that energy prices will be lower under Trump. This name might have tariff concerns as well. Good investment long-term.

He exited at a profit. Services have been selling off when gas/oil was recently weak. The problem is that drillers have gotten too efficient. That said, this is looking tempting, trading at 3x EBITDA and 32% free cash flow yield.

He sold. Service sector has been completely eviscerated. Capex is being cut everywhere, as low oil price isn't motivating for drilling. Won't do well if market continues to be risk-off.

Drilling services to energy (oil & gas) producers. This name weakens when energy companies decide to pull back on drilling; they do that when the commodity's weak and there's less $$ to spend. Very volatile, and that's why she stays away.

Gets swayed by underlying commodity prices and the energy sector, in general, has come off. OPEC has indicated its cutbacks won't continue; a bizarre move in the face of weaker demand, which suggests they need revenue from energy volumes to drive their economies.

He sold this around $90. It's tied to the fall in oil prices as drilling activity slides. Shares are at a 28% free cash flow yield, but he isn't confident about that figure. Revisit this in maybe 6 months after the market absorbs OPEC oversupply.