Trinidad Drilling Ltd (TDG.TO)

Likes this space. Prefers Canelsen Drilling (CDI-T), but it has been hurt also. He would look at this as the time to “dollar cost average”. Doesn’t look like this is going to be a long-term rout in oil/gas prices.

Announced a great partnership with Slumberger last year, but the issue is that it takes a lot of time to get it ramped up. At the same time, they may have had less focus on North America than other players who have been gaining more market share. The story is fine and they have great assets. Eventually the ball will get rolling and he wouldn’t be worried. A great entry point. Trading below 5X earnings value to EBITDA for next year, which is almost the lowest in the group.

Doesn’t know why this one came down so much. There is a little bit of support at about where it is now, so it should stop. Doesn’t like the corrective period, but does like the stock. Little disappointed in this one, coming down like it did.

In energy, he likes the energy service companies. The excessive cash flow being thrown off by the oil companies still has to be put back into the ground. This company had a high debt level but have started paying it down. Getting great rig activity. More importantly, they have this great joint global venture with Halliburton (HAL-N) which is going to be phenomenal for the growth going forward.

This one ranks in the middle of the pack in his processing. Expects there will be continued growth in the industry. A good-quality name. Currently, we are seeing a little bit of wind come one of the sails of the service stocks.

Prefers over precision. Used to own then he sold and it pulled back and he is now looking at it again. Likes the management. They are conservative.

Not his favourite driller, but right now, the valuation is quite compelling. Trading a little below the peer group. Prefers CanElson Drilling (CDI-T) and CWC Well Services (CWC-T). (See Top Picks.)

Has been staying away from drillers and playing the direct exposure on the oil/gas side. Drillers are going to do well where everyone is expanding their budgets in the right basins and this company seems to have the asset base that is in the right place.

Done well over the long term. He likes this stock and the space. A good time to get exposure to this one. Arrangement with Halliburton shows credibility. He has PD-T in this space. He prefers the large guys right now.

Ranks in the lower end of his process. Wait to see a little bit more recovery from earnings before going in. There is a lot of activity in the Western Canadian sedimentary basin where they tend to do a lot of their work. They are specialists in deeper well drilling. (See Top Picks.)

Used to be structured as an income trust and was forced to cut the distribution. They like to spend a lot of money on CapX and build sophisticated equipment, which is very much in demand recently. However, they can’t seem to find a level at which they are built out enough so that they can start free cash flowing money back to their shareholders. Drilling companies are very, very cyclical and the market treats them as such.

Sold his holdings because of concerns on the overall environment. Has performed extremely well in the last little while but feels it is probably fully priced. There is lots of competition and pressure on margins. The environmental side is putting pressure on fracing.

(Market Call Minute.) This has done extremely well. Excellent management.

Drilling space is exciting for the next decade. There is some technical resistance and for the next year or two he thinks these stocks are range bound now.

Have a very new fleet and 80% of their fleet can go down very deep to a 8000 m level. A lot of activity is centered around the Duvernay play. Last year there were about 100 wells drilled in the Duvernay and this year the amount will be doubled. Looking at the overall basin year-over-year, for drilling activity, it has been flat here and in the US but on the gas side it is actually up 50%. Valuation is good at 10X versus its competition of 12X.