Western Energy Services

WRG-T

Analysis and Opinions about WRG-T

Signal
Opinion
Expert
BUY
BUY
October 9, 2018

The company is very cheap in terms of price to book. Their book value was $4 at the end of June. However, they have a debt problem: $211 million of debt compared to an equity value of $369 million. He sees this as a takeover candidate especially now because he is seeing consolidation in the rig industry. When the industry turns around, this company will be very profitable. Utilizations rates go from 20% to 70% or 80% and much of the increased cash is profit. In addition, when rigs are busy, rig suppliers have pricing power. So, there can be an increase of 10x in profitability.

The company is very cheap in terms of price to book. Their book value was $4 at the end of June. However, they have a debt problem: $211 million of debt compared to an equity value of $369 million. He sees this as a takeover candidate especially now because he is seeing consolidation in the rig industry. When the industry turns around, this company will be very profitable. Utilizations rates go from 20% to 70% or 80% and much of the increased cash is profit. In addition, when rigs are busy, rig suppliers have pricing power. So, there can be an increase of 10x in profitability.

Josef Schachter
President, Schachter Asset Management
Price
$0.830
Owned
Yes
DON'T BUY
DON'T BUY
August 17, 2018

He would not own this company, because the market cap is too small for the liquidity. Their leverage is higher than their peers – 3.4 times EBITA.

He would not own this company, because the market cap is too small for the liquidity. Their leverage is higher than their peers – 3.4 times EBITA.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$0.900
Owned
No
PAST TOP PICK
PAST TOP PICK
May 1, 2018

(A Top Pick July 28, 2017. Down 23%). This is quiet money. It’s a driller. Its book value is $4.15, which is much higher than its trading price. This is a Canadian driller with only 3 rigs in the United States. Its price hasn’t improved because it is locked in Canada. The AECO price (http://www.gasalberta.com/gas-market/market-prices?p=pricing-market.htm) is about $2 but will be $2.75 to $3.00 by Q4. Similarly, the NYMEX price (https://www.eia.gov/dnav/ng/NG_PRI_FUT_S1_D.htm) was up a nickel today even as oil went down, could by $4 by Q4.

(A Top Pick July 28, 2017. Down 23%). This is quiet money. It’s a driller. Its book value is $4.15, which is much higher than its trading price. This is a Canadian driller with only 3 rigs in the United States. Its price hasn’t improved because it is locked in Canada. The AECO price (http://www.gasalberta.com/gas-market/market-prices?p=pricing-market.htm) is about $2 but will be $2.75 to $3.00 by Q4. Similarly, the NYMEX price (https://www.eia.gov/dnav/ng/NG_PRI_FUT_S1_D.htm) was up a nickel today even as oil went down, could by $4 by Q4.

Josef Schachter
President, Schachter Asset Management
Price
$1.160
Owned
No
PAST TOP PICK
PAST TOP PICK
April 3, 2018

(A Top Pick June 12, 2017. Down 48.76%). This is a driller. Oil service stocks are always more volatile. The drillers are all cheap now. This is on his Action Alert buy list. The company’s book value is $4.19. He has a $2.50 one-year target. This stock traded at $11 in 2014. In bull markets these stocks have a high beta. Western doesn’t have a debt problem. It owes $265 debt compared to $386 in equity. This is lower than Calfrac and Precision. Western’s biggest lender is AIMCO, which knows the oil industry well. AIMCO is also an investor in Western.

(A Top Pick June 12, 2017. Down 48.76%). This is a driller. Oil service stocks are always more volatile. The drillers are all cheap now. This is on his Action Alert buy list. The company’s book value is $4.19. He has a $2.50 one-year target. This stock traded at $11 in 2014. In bull markets these stocks have a high beta. Western doesn’t have a debt problem. It owes $265 debt compared to $386 in equity. This is lower than Calfrac and Precision. Western’s biggest lender is AIMCO, which knows the oil industry well. AIMCO is also an investor in Western.

Josef Schachter
President, Schachter Asset Management
Price
$1.100
Owned
No
PAST TOP PICK
PAST TOP PICK
January 15, 2018

(A Top Pick Jun 12/17, Down 32%) This was a top pick to buy some time after the show. It did quite well after the weakness he was looking for in order to buy. They are a Canadian driller.

(A Top Pick Jun 12/17, Down 32%) This was a top pick to buy some time after the show. It did quite well after the weakness he was looking for in order to buy. They are a Canadian driller.

Josef Schachter
President, Schachter Asset Management
Price
$1.350
Owned
No
BUY WEAKNESS
BUY WEAKNESS
November 9, 2017

Mostly in Canada, but trading significantly below $4, so it is a tax loss situation. It is cheap here. It is smaller cap than the others.

Mostly in Canada, but trading significantly below $4, so it is a tax loss situation. It is cheap here. It is smaller cap than the others.

Josef Schachter
President, Schachter Asset Management
Price
$1.300
Owned
Unknown
WATCH
WATCH
September 18, 2017

It is a very cheap driller. $5.53 book value at the end of last year. They are in a break even situation. He sees it doing much better. He likes the stock and covers it. There will be a great opportunity to buy it likely later in the year.

It is a very cheap driller. $5.53 book value at the end of last year. They are in a break even situation. He sees it doing much better. He likes the stock and covers it. There will be a great opportunity to buy it likely later in the year.

Josef Schachter
President, Schachter Asset Management
Price
$1.290
Owned
Unknown
TOP PICK
TOP PICK
July 28, 2017

This is a driller. 51 rigs in Canada and 5 in the US. They also have 66 service rigs. A lot of ownership by management. This could potentially be a double-digit stock. If you are able to buy this at $1.40 or less, it is going to be a great one for the next cycle. (Analysts’ price target is $2.50.)

This is a driller. 51 rigs in Canada and 5 in the US. They also have 66 service rigs. A lot of ownership by management. This could potentially be a double-digit stock. If you are able to buy this at $1.40 or less, it is going to be a great one for the next cycle. (Analysts’ price target is $2.50.)

Josef Schachter
President, Schachter Asset Management
Price
$1.510
Owned
No
TOP PICK
TOP PICK
June 12, 2017

They did $18.6 million EBITDA in the 1st quarter. They’re involved in contract drilling in Canada and the US, with 51 rigs in Canada and 5 in the US. They have 66 well servicing rigs. Under $2, this is a Buy, but under $1.90, it is a table pounding buy. He has a one-year target of $4.80. (Analysts’ price target is $3.50.)

They did $18.6 million EBITDA in the 1st quarter. They’re involved in contract drilling in Canada and the US, with 51 rigs in Canada and 5 in the US. They have 66 well servicing rigs. Under $2, this is a Buy, but under $1.90, it is a table pounding buy. He has a one-year target of $4.80. (Analysts’ price target is $3.50.)

Josef Schachter
President, Schachter Asset Management
Price
$2.035
Owned
No
PAST TOP PICK
PAST TOP PICK
April 7, 2016

(Top Pick Apr 6/15, Down 64.70%) Same as TDG-T. There won’t be any margin expansion going forward.

(Top Pick Apr 6/15, Down 64.70%) Same as TDG-T. There won’t be any margin expansion going forward.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$2.220
Owned
No
COMMENT
COMMENT
November 20, 2015

Typically service companies offer more upside than producers. If he is correct in his oil call of $55-$60, that will increase field activity because a lot of plays will work. He doesn’t see much upside above $60 in the next 1-2 years. In that environment there is still ample capacity in tier 1 drilling rigs, but companies will not have near the same pricing power as they would have coming out of a regular cycle. He is tempted on the valuation of this company, but it is not quite there for him. Liquidity can be a real issue on this one. The dividend is at risk of being cut if oil is anywhere remotely close to where we are now.

Typically service companies offer more upside than producers. If he is correct in his oil call of $55-$60, that will increase field activity because a lot of plays will work. He doesn’t see much upside above $60 in the next 1-2 years. In that environment there is still ample capacity in tier 1 drilling rigs, but companies will not have near the same pricing power as they would have coming out of a regular cycle. He is tempted on the valuation of this company, but it is not quite there for him. Liquidity can be a real issue on this one. The dividend is at risk of being cut if oil is anywhere remotely close to where we are now.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$3.500
Owned
No
TOP PICK
TOP PICK
April 6, 2015

You want to buy the higher quality rigs. The crummiest rigs will probably not come back into service for a couple of years. The service sector does better as you come off a bottom and the best of those are the land drillers. These stocks do well several months ahead of the sector in general. 4.34% dividend.

You want to buy the higher quality rigs. The crummiest rigs will probably not come back into service for a couple of years. The service sector does better as you come off a bottom and the best of those are the land drillers. These stocks do well several months ahead of the sector in general. 4.34% dividend.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$7.000
Owned
Yes
COMMENT
COMMENT
March 11, 2015

He has his eye on a number of other energy service providers. This one is sort of in the middle of the pack for him. He is waiting for prices to stabilize before moving back into this area.

He has his eye on a number of other energy service providers. This one is sort of in the middle of the pack for him. He is waiting for prices to stabilize before moving back into this area.

Bruce Campbell (2)
President & Portfolio Manager, Stone Castle Investment Management Inc.
Price
$5.390
Owned
No
BUY
BUY
February 5, 2015

He has become fonder of this one over the last year. The drilling service business is in an abyss, but the market has already priced this in. It will find a new trading range between $6-$7.

He has become fonder of this one over the last year. The drilling service business is in an abyss, but the market has already priced this in. It will find a new trading range between $6-$7.

Robert Lauzon
Deputy Chief Investment Officer, Middlefield Capital Corporation
Price
$5.920
Owned
Unknown
WAIT
WAIT
January 6, 2015

In the drilling business with one of the better management teams and a pretty new drill fleet. If you are going to own any drillers in the Canadian space, this is one of the top 3 that you want to own. However, with the drop in oil and gas prices, it is difficult for them and you are looking at a few months of weakness. If you are not in a hurry, you can wait to accumulate. Thinks the dividend is sustainable.

In the drilling business with one of the better management teams and a pretty new drill fleet. If you are going to own any drillers in the Canadian space, this is one of the top 3 that you want to own. However, with the drop in oil and gas prices, it is difficult for them and you are looking at a few months of weakness. If you are not in a hurry, you can wait to accumulate. Thinks the dividend is sustainable.

Jim Huang
President, T.I.P. Wealth Management
Price
$6.510
Owned
Unknown
COMMENT
COMMENT
December 11, 2014

This is just going to carry on suffering for the time being, and even lag. Some of these service companies could be worse, not directly the oil companies themselves. One of a bunch, but not one of the best.

This is just going to carry on suffering for the time being, and even lag. Some of these service companies could be worse, not directly the oil companies themselves. One of a bunch, but not one of the best.

Michael Smedley
Exec VP & Chief Investment Officer, Morgan Meighan & Associates
Price
$5.260
Owned
No
COMMENT
COMMENT
November 6, 2014

There is a lot of value here. This is one of the better drilling companies to own. Have about 50 drilling rigs in Canada, about 5 in the US and a fleet of service rigs. The average age of the drilling fleet is about 4 years. Debt levels are reasonable. Utilization and day rates for their drilling rigs are above the industries averages. A company that is worth owning if you want to be constructive in the services space.

There is a lot of value here. This is one of the better drilling companies to own. Have about 50 drilling rigs in Canada, about 5 in the US and a fleet of service rigs. The average age of the drilling fleet is about 4 years. Debt levels are reasonable. Utilization and day rates for their drilling rigs are above the industries averages. A company that is worth owning if you want to be constructive in the services space.

Mason Granger
Portfolio Manager, Sentry Investments
Price
$7.030
Owned
Yes
COMMENT
COMMENT
September 15, 2014

The chart shows the trend is lower highs. The significant moving averages are pointing lower. There is nothing really positive about this. This could go significantly lower.

The chart shows the trend is lower highs. The significant moving averages are pointing lower. There is nothing really positive about this. This could go significantly lower.

Jon Vialoux
Research Analyst, CastleMoore Inc.
Price
$9.810
Owned
Unknown
BUY
BUY
July 17, 2014

Second favourite driller. Thinks they will have a strong quarter. They are now more efficient after lowering costs. Will benefit from increased cap-x spending.

Second favourite driller. Thinks they will have a strong quarter. They are now more efficient after lowering costs. Will benefit from increased cap-x spending.

Robert Lauzon
Deputy Chief Investment Officer, Middlefield Capital Corporation
Price
$10.840
Owned
Yes
BUY
BUY
June 16, 2014

One of the better Junior drillers out there. Especially if the LNG stuff gets approved and starts moving forward, a lot of Canadian oil/gas service companies are going to do quite well.

One of the better Junior drillers out there. Especially if the LNG stuff gets approved and starts moving forward, a lot of Canadian oil/gas service companies are going to do quite well.

Alex Ruus
Portfolio Manager, Arrow Capital Management
Price
$11.450
Owned
No
BUY
BUY
April 21, 2014

(Market Call Minute.) Given what has happened to their customers, in terms of the gas drillers in particular, he thinks you are going to see some increased activity and feels the stock will continue to go up.

(Market Call Minute.) Given what has happened to their customers, in terms of the gas drillers in particular, he thinks you are going to see some increased activity and feels the stock will continue to go up.

James Hodgins
Chief Investment Officer, Curvature Hedge Strategies
Price
$10.890
Owned
Yes
BUY
BUY
March 25, 2013

(Market call minute.) 4% yield

(Market call minute.) 4% yield

John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$7.470
Owned
Yes
COMMENT
COMMENT
March 1, 2013

Chart doesn’t show that much is happening. Has a band between $6.80 and $9.90 that has run from early 2011 to the current date. Looks like you would want to buy it on a breakout. He would prefer names that are a bit bigger such as Calfrac (CFW-T).

Chart doesn’t show that much is happening. Has a band between $6.80 and $9.90 that has run from early 2011 to the current date. Looks like you would want to buy it on a breakout. He would prefer names that are a bit bigger such as Calfrac (CFW-T).

Hap (Robert) Sneddon FCSI
Chief Portfolio Manager & Founder, Castlemoore Inc.
Price
$6.970
Owned
No
PAST TOP PICK
PAST TOP PICK
October 16, 2012

(A Top Pick Nov 2/11. Down 8.55%.) Pretty thinly traded stock so it could be up or down 5% in a day. Bought this for a 3-4 year investment. Lowest cost, fastest growing drilling company in North America. Highest margins and highest operation rates. 3.6% dividend yield which he feels they can grow at some time.

(A Top Pick Nov 2/11. Down 8.55%.) Pretty thinly traded stock so it could be up or down 5% in a day. Bought this for a 3-4 year investment. Lowest cost, fastest growing drilling company in North America. Highest margins and highest operation rates. 3.6% dividend yield which he feels they can grow at some time.

John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$7.770
Owned
Yes
BUY
BUY
September 10, 2012

Likes this company very, very much. Tremendous management team. All oil field service companies have languished because people are concerned that maybe they are going to buy something. One of the 2 best companies operating in Canada now. Just declared a dividend of about 5%.

Likes this company very, very much. Tremendous management team. All oil field service companies have languished because people are concerned that maybe they are going to buy something. One of the 2 best companies operating in Canada now. Just declared a dividend of about 5%.

John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$6.970
Owned
Yes
TOP PICK
TOP PICK
July 20, 2012
Have 40+ rigs now. Lowest cost, most efficient rigs. They operate at industry-leading capacity levels. Profitable. Acquisitive. Oil/gas companies will use these guys’ rigs first because although they are more expensive and command a premium, they drill the fastest and most accurately. You can see this at $11-$12.
Have 40+ rigs now. Lowest cost, most efficient rigs. They operate at industry-leading capacity levels. Profitable. Acquisitive. Oil/gas companies will use these guys’ rigs first because although they are more expensive and command a premium, they drill the fastest and most accurately. You can see this at $11-$12.
John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$6.470
Owned
Yes
BUY
BUY
March 12, 2012
He is going to won it for the foreseeable future. Just met with management team. They are going to expand into the states in a controlled fashion. Their rigs are really in demand. They are going to be able to continue to demand great prices for their rigs. For the next couple of years the window for drilling companies remains very, very positive.
He is going to won it for the foreseeable future. Just met with management team. They are going to expand into the states in a controlled fashion. Their rigs are really in demand. They are going to be able to continue to demand great prices for their rigs. For the next couple of years the window for drilling companies remains very, very positive.
John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$9.750
Owned
Yes
TOP PICK
TOP PICK
November 2, 2011
Oil field services. Great management team. These are the guys that built Precision Drilling (PD-T) from the ground up. Have gone from 0 rigs to 48. They are profitable. Drilling in Alberta and North Dakota and it rigs are operating at 95% capacity.
Oil field services. Great management team. These are the guys that built Precision Drilling (PD-T) from the ground up. Have gone from 0 rigs to 48. They are profitable. Drilling in Alberta and North Dakota and it rigs are operating at 95% capacity.
John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$8.280
Owned
Yes
PAST TOP PICK
PAST TOP PICK
August 9, 2011
(Top Pick Apr 11/11, Up 5,82% total return) If you want to own a driller, this is the one to own. 0 to 40 rigs in no time.
(Top Pick Apr 11/11, Up 5,82% total return) If you want to own a driller, this is the one to own. 0 to 40 rigs in no time.
John O'Connell, CFA
Chairman and CEO, Davis Rea
Price
$8.200
Owned
No
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