After the failed take over bid, Gord threw alot of numbers bout sales, work in progress, billings etc. I will be very interested in seeing the cash position exiting 2012. If the cash position is very strong, We might see HYD start pouncing on depressed players such as Leader and even Poseidon could be challenged and Calmena also. The one trend I am noticing with the recent spike in RIM is that despite the beatings by the analysts RIM really did a masterful job in converting non core assets, inventory, and GSA reductions into COLD HARD CASH. No one expected them to have almost 3 B in cash heading into the BB10 launch. I think the double off that low was the reward for good cash management in challenging times. This allows the company to be able to do the things it wants to regarding bb10 launch.
I have digressed using RIM as an example because I think we might see the same scenario unfold here. Again I am waiting for the numbers. We were led to think because of the Do All posturing that Q3 was going to be terrible and HYD was going to have to pay big penalties on a late contract etc. Gord always keeps cards close to the vest so I was wondering why the quiet accountant all of a sudden threw some huge numbers out there. I cannot gain from my usual sources much about the Houston operation. I also dont really know why the news flow stopped lately. I will see how the cash sits at Q4 2012 but I got a feeling there are a few hidden cards that might unfold. I dont know if HYD will continue to convert non core assets into cash which has kept the company away from the banks, financings, and debt covenants or if there is a grander design either for acquisitions or as working capital buffers for even bigger rig builds in 2013.
I think that cash will be king in 2013 . I think all companies that are struggling with low cash will pay dearly for financing or be forced to issue equity at unfavourable terms. I am watching how HYD and RIM ( too cash rich companies ) will perform in 2013 and am looking for more companies like these. Cash rich companies with good sales and tight fiscal discipline offer multi bagger potential as operating effeciencies increase and salles rise.
There is another link I am curious about also. ESI has always been HYD's biggest customer. They have exited 2012 as one of the better performing drillers and they by far and away generate more international sales than any other driller. They are contracted heavily by Penn West and CNQ . Murray Edwards is the founder of both ESI and CNQ and the biggest shareholder in Penn West. On the TV show on Discovery "license to Drill " a Penn West crew was using a Hyduke rig. I have the feeling that the Houston operation was built for new rig builds for ESI's international customers. I do not think for a moment that HYD would have not undertaken such a large operation had it not been " promised a floor " amount of business with ESI for such an undertaking. If we see early in 2013 some announcements for new internationa rig builds for the Houston operation this would support my hypothesis. Nisku would service Canada and the Bakken and Houston would service Texarkana and the Americas and Eurasia as it is a large accessible port.