IF we circle back to February  last year, the sentiment toward Tuscany was quite good, Even Veronica Hersh of Bluemont Capital was a supporter and the prognosis was very good. Then two major factors surfaced that significantly impacted both the financial performance and sentiment. The market realized that their debt level was above average, but there was also a clear path forward to debt reduction to around the average of the peers and considering the book value being over $1 per share many thought the price would be heading well over a $1 as debt was reduced and capital was deployed toward adding more rigs and revenue growth.

That all changed when the company had premature ending to the contracts in Trinadad and then followed by the terrible event where HRT defaulted on their long term agreement on the two most expensive and highest revenur and margin generating rigs the company has.....the two heli-rigs. These two rigs cost the company approximately $50 million and they have been idle now since last June. Along the this loss of very substantial revenue, the company has had to pay for the tear down and transport back to civilization from the jungle. HRT really screwed the company badly out of tens of millions of dollars. I hope Tuscany has some retribution from the arbitration.

The other change was the slow down in the oil and gas drilling market in NA and to a lesser extent in SA which is Tuscany's major market.

So, Tuscany needed things to really well and in fact they have gone quite the other way. As a result instead of them paying down their debt levels they have increased them some and deferred the first payment due through a restructure that cost the company over $5 million of wasted money.

They took a calculated risk with the leveraged buyouts (just like Precision Drilling did when they bought Grey Wolf at the top of the market just before the financial collapse in 2008. They made it through and are prospering but they got some help from an Alberta provincial fund and the share price is no where near it was in 2008 due to the market and share price dilution to fix the debt problem)

IF HRT had not screwed this company, this situation in my opinion would be much different rigtht now. The company would be generating $80 of EBITDA and the share price would be 65 or 70 cents as opposed to 24 cents.

If large holders like M&P, Dawson and Wright are anxious to monetize their shareholdings, they are going to have to compromise their expecation of share price as Contragalo indicates as the company equity is only worth in the range he indicated due to a large portion of enterprise value being still composed of debt. For me, 50 - 75 cents would be fabulous and even if there are holders that bought higher will get a good portion of their investment back (remember M&P paid $1.50 for their shares in effect as the sale price they received with they sold their driller to Tuscany included cash at equity in Tuscany at the value of 29 million shares at $1.50)

I for one would be very pleased if an offer was announced in the 50 to 75 cent range at this point (with 75 cents being a very pleassent surprise)