Cameron: [00:00:00] Welcome back to QAV America, Tony. I think this is episode 11. It’s been a big week. Tony, since we last talked, people. Yeah. Bombing America’s Back doing what it loves best bombing. Other countries love a good bombing. Uh, it’s funny, you know, I read the New York Times every day, as you know, and you know, most of their articles, uh, are negative towards Trump and the Trump administration.

As soon as he starts bombing somewhere. It’s been interesting to see how the New York Times started to rally around the, [00:01:00] you know, say what you want about Trump, but, uh, he’s doing the right thing here. This is, yeah. He got a bomb. Iran. This is good. This is good. Trump Trump’s finally doing something. We agree with bombing, bombing another country.

Anyway, it’s obviously been an interesting time for the

Yes.

Tony Kynaston: It, its effect on the, on the oil market. sure it’s had an effect on the stock market yet Too much.

Cameron: No, uh, it’s the stock market. Well, it did, it dipped. Uh, when people thought, whoa, I don’t know, maybe oil is gonna, maybe they’re gonna. Block the Straits of Hormuz, but, uh, nah. Then it sort of rebounded. After that, everything dipped for a day and then they got over it. They decided it was, uh, TACO bombing and, uh, they, they, they, they recovered.

Tony Kynaston: Uh,

Cameron: the latest news.

Tony Kynaston: Trump declared a truce, a cease one

Cameron: Trump. Trump said that there was a truce and then Iran and [00:02:00] Israel came out and said, what? Uh, what? We’re not aware of that, but um, I. Yeah, market got on the front foot, and I thought I would start this with just reviewing our portfolio. So in the last 30 days, our US portfolio is up 6.89% versus the s and p 500, up 3.83%.

So been a good month for us vis-a-vis that. Year to date though, our portfolio is still down 17.4% versus the s and p 500, up 2.4%. Um, but over the last 12 months, we’re up 33.3% versus the s and p up. 10.2%. So we’re still doing three [00:03:00] times the market over the last 12 months, which I’m not gonna complain about.

It’s pretty good. The big winners in our portfolio. Well, let’s do, I don’t think Wikipedia. Yeah, it doesn’t change when I change the timeframe. Let me big gains, uh, Willis Lease Finance is still our biggest, it’s, uh, up 199% since we bought it. What’s next? BLX Foreign Trade. Bank of Latin America is up 68% in Nova, internationally and VA is up 67%.

Euro Cs up 65 gas GASS, which is stealth gas up 33. Optimum Bank Holdings, OPHC is up 32%. Kt your initials backwards up 28% regional management. Up 20 Sarcos Energy navigation, another shipping company up 16, uh, [00:04:00] EOS Greek, another Greek shipping company up 6.84 UBS up about 1% since we added them. And The Big Loser is the one that I did the Paul Pork on a few weeks ago.

NL Chile, the company that builds mobile phone towers everywhere from memory. Uh, they’re down 10% since we bought them, so haven’t looked into that. Not sure what’s going on there, but, uh, all in all portfolio is doing pretty, pretty good in a very frothy market. And we don’t own any of the MAGA seven still.

Tony Kynaston: no all value stocks. Um, and, you know, just to prove that they can grow as as the mag seven or the growth stocks.

Cameron: Not the sure as they’re doing as well as the MAGA seven stocks, but they’re doing okay. I saw a Tesla, I was out, uh, going out to dinner last night in Brisbane, and I [00:05:00] saw a Tesla parked in front of me that had a sticker on the back that said, I bought this before I knew Elon was crazy. So, uh.

Please don’t key my car, I guess is the, uh, thing I said to Chrissy just the day before that we saw a Tesla, I was like, I wonder how many Teslas get keyed these days. I wonder how many people walk around keying Teslas not the Tesla owner’s fault. Any who? Um, I have a pulled pork to do on a company called PDS or Precision Drilling.

Ticker. PDS today, Tony Canadian Company. Do you have anything about the American market you want to talk about before I get into that?

Tony Kynaston: No, I mean, we just touched on the fact that the oil prices is swinging. Uh, it’s quite volatile. It, it’s, uh, was a buy last week. It’s, it’s back below its buy price now. Um, it did drop after ceasefire was announced today, and people weren’t as worried about the straits of  Hormuz being closed. And so [00:06:00] that’s kind of the pre oil price again, but who knows where it’s gonna go to from here. So,

Cameron: Yeah.

Tony Kynaston: a lot of our all stocks have come off. Today. Today they were bolstered by the rise oil last week. Um, so we’ll see what happens. Do we have any, I don’t think we have any oil stocks in the US dummy portfolio, do we?

Cameron: No, we’ve got a lot of, got a lot of shipping companies that are shipping oil, but uh, not oil companies per se. And the one I’m gonna talk about today, precision Drilling is a Canadian company that makes oil rigs. I. There are specialists in making and running oil rigs that they contract out. And it was really interesting, as I say, every week, ’cause I know nothing about any of these businesses.

And uh, it was just really interesting to learn about what’s going on with state of the, a, state of the art, uh, oil rigs, uh, lean, mean, technologically advanced, [00:07:00] uh, oil rigs, which is what these guys do. But, um, couple of caveats before I do it. So I haven’t run a, a new checklist since the one I did at the beginning of June.

Their share price when I ran this analysis was about $47 78. Today it’s $48 oh three, so it’s up a little bit, but I reran the scores. It didn’t change the scores. The other caveat though, is like the Japanese one I did last week, ORX. In Wikipedia, the reporting for this isn’t in USD, it’s in Canadian dollars, but the prices is in USD, so a lot of, not a lot, but a few of the scores that we have in our checklist.

I assume that they’re all in the same currency. They’re not. So I had to go in and, uh, fix a couple of the scores. Didn’t change it dramatically. Um, but I’ll get into that later on when I do the scoring. [00:08:00] But just again, for any listeners out there who are using the spreadsheet that I built for Stockopedia for stocks on the New York Stock Exchange, just be aware of the currency difference and check it.

If you’re looking at buying something, just check it. Check the currency that it’s reporting in, in Stockopedia, and, um, adjust your numbers. Uh, so far, as I said, it hasn’t made a great deal of difference, but it, you know, you don’t wanna get caught out for reference. One Canadian, a dollar at the moment is worth 72.9, uh, US cents.

Tony Kynaston: So

it’ll

Cameron: So.

Tony Kynaston: becomes a 51st state of the us.

We’ll

Cameron: Yeah.

Yeah.

I’m, I’m pushing for that, um, for that, for just to make my life easier. Yeah, yeah, yeah. Get it, get it done. Trump, don’t tar it. Um, so a little bit about precision drilling. [00:09:00] They build own and crew land rigs that punch holes in the ground for oil and gas producers. Then they rent. Out the rigs, camps, tool packages and keep the wells flowing.

So they’re like, uh, the landlord and handyman rolled into one for shale and oil sands operators. There’s, you know, we will bring in the rig, maintain the rig, and uh, get the whole thing up and running for you. Which is kind of seems weird to me that all of that side of it is outsourced. You know, I kind of think of oil companies as doing it all, you know, sort of soup to nuts.

But like everything these days like that, like the mobile phone operators, we talked about the, the mobile phone companies, the telephony companies don’t actually own the mobile phone towers. [00:10:00] In some cases, somebody else come. These guys are basically the oil rig version of. Um, NL NL that I talked about a couple of weeks ago.

You don’t have to, you don’t have to worry about the oil rigs. We’ll take care of the oil rigs. We’ll, Mabb, we’ll, we’ll build them. We’ll run all the tech, we’ll maintain them, you know, drop ’em on your land, run the whole thing, and you don’t have to worry about it. So, yeah,

the.

Tony Kynaston: the old

buying picks and shovels in a gold brush, isn’t it? So you’re getting a, uh, a company supporting the gold brush. You don’t have to care about where they dig for gold or oil. In this case, you just, um, are happy that people are gonna rent the picks and shovels from you to do it.

Cameron: Yeah, launched in 1951 when two. Entrepreneurs in Calgary bought a single wooden Derrick for 25,000 Canadian dollars and nicknamed it old number one. And then there was a post-war drilling boom in Alberta at the time. They ended up [00:11:00] having. 10 rigs by the end of the 1950s and earned a reputation for being fast and furious to get rigs out there and get oil out of the ground.

1987, they were taken over by a company called Cyprus Drilling, and the end of the floated on the Toronto Stock Exchange gave it a lot of money to go and start rolling up. Competition and they set up a buy the fleet, keep the cruise playbook that drove 40 boltons through the 1990s supercycle. Um, buy the fleet, keep the cruise.

Just basically means they walk, you know, walk up to a mom and pop drilling operation, cut a check for the rig and keep everybody on staff basically. Keep ’em, keep ’em all part of the operation. [00:12:00] So they did a, a lot of rollups over the years. They survived the 2015 2016 oil crash by parking half of their rigs, slashing their overheads by 45%.

And then they did a lot of refinancing in 2020 at pretty high rates. They issued a lot of bonds at like six, 7% high sixes, low seven percents, which is, uh, they’ve been buying out with their cash, um, doing early cash outs with those of those to reduce their debt. But I’ll talk about that a little bit more later on.

But a lot of their peers. In the US got chapter 11, uh, during the sort of oil crash, but these guys managed to finance their way out of it, cut their costs and refinance their way through it. One of the biggest, um, [00:13:00] things that they’ve got going for them, which isn’t unique, but is one of the key.

Interesting things about them as an operator is in 2017, they launched a series of what they’re called super series rigs, the super single and the super triple. These are pad walking, a powered, high torque units designed for North American stale laterals, and it’s now 72% of their active fleet. So let me break all that down.

If anyone listening to this, like me knows nothing about oil rigs. So these are like, uh, the EVs of oil rigs, basically. Um, super loaded with high tech. Oil rigs. A super single is a compact trailer mounted unit with one pump set [00:14:00] and a high torque top drive. It drills shallower horizontals and runs off a single.

Motor can be hauled down a highway behind two prime movers. You roll you, you roll it in, level the pad, flip up the telescoping mast, and start making holes before lunch. With this thing. It’s uh, crazy. It’s all full of touchscreen, Tesla, like tech. Um, I saw, I watched some YouTube’s guys sort of running these whole things.

It’s all, yeah, it’s like super high tech stuff. Then they have the super triple, which is the beefed up Big brother. This has three pump sets. Um, that you can use for getting down into Permian laterals, same AC engines, but double the volume stronger, Ryan. And they can rip down 7,000 feet per day, which I believe [00:15:00] is two Empire State Buildings top to tail in a day.

It can drill down. So, and then one of the other cool things is I said, pad walking feet. They have hydraulic shoes. That can crawl 30 feet sideways in an hour. So you basically set up an oil rig. Don’t like where it is, move it down. 30 feet, drill again. Don’t like that. Move it down 30 feet. Next day drill again.

So, um, yeah, it’s like walking oil rigs and they have this thing called, uh, this system called Alpha automation Sensors and software that stab pipe manage weight on bit and cycle mud pumps. Sounds like one of those, uh, fake tech videos where they just make up, you know, names.

Tony Kynaston: Sounds like an AI nightmare when the, the computers take over these walking drilling machines. uh,

gonna

Cameron: Yeah, yeah, yeah. [00:16:00] They’re gonna be, they’re gonna be marching on the humans. Somebody, I was on a, a Reddit thread the other day. Somebody was complaining about the way that AI today will glaze you. They were like, you, you say you did something like I, I’ll say that I. Brought in my calories for the day under 2000.

They’re like, that’s not just dieting, that’s you’re rewriting the book on calorie management. They’re always like telling you, you’re an absolute. And people were complaining about this tendency, and I’m like, I dunno what you’re complaining about. A few years from now, you’ll be looking back on the days when AI used to.

Tell you how great you were when they’re hunting you down. Instead, maybe with movable oil rigs hunting you down, trying to punch a seven foot thousand hole through you. Um, so basically this alpha automation system, one driller. In a control room in Houston, can babysit three rigs, manage the whole thing remotely.

You can, you [00:17:00] still need a, an onsite crew, but it reduces it from 22 headcount to 14 headcount. They also have a battery hybrid evergreen system. It’s basically a, a battery hybrid pack. It charges while drilling and then discharges while tripping. Diesel engines, idle noise drops. CO2 shrinks and the rig passes the newer emission caps.

The places like Colorado and Canada have. So these are like. Um, sustainable, environmentally friendly oil rigs that have a lot less diesel usage and, yeah.

Tony Kynaston: when you, so when you drill the oil out of the ground

Cameron: Mm-hmm.

Tony Kynaston: to produce the carbon, you do

it

Cameron: Yeah.

Tony Kynaston: Good, Good,

Cameron: Don’t.

Tony Kynaston: up with that legislation.

Cameron: Don’t think too much about it. Tony, you do your head in. [00:18:00] No, no, it’s all good. It’s all, it’s all green.

Look, you know it’s green because they used it in the name Evergreen. Tony, what do you, what? You know, evergreen. You know, it’s good. Um, they’ve got other stuff too, technically. Quick rig, Mabb system.

No cranes, no 12 hour rig ups. Fewer hands crushed by monkey Board slips. You just whip these things up and off you go. So anyway, bottom line is. Same hole in the ground, but half the time, fewer bodies, less diesel, more day rate. Bonus, it’s about speed, uh, and high tech remote management. And if the, you know, when the next oil crash happens, um, you’ve got.

Lower costs. Uh, you can shut these things down, get them up and running faster when the oil price, the shale oil price, as we know, we’ve talked about it on our shows over the years, shale oil operators, um, run up and shut down [00:19:00] depending on where the oil price is, whether or not they could be profitable or not.

So anyway, that’s the bottom line of what they do. They’ve been doing a lot of deals. Um, they’re, they’re buying lots of stuff. Um. They’re, they’ve got a lot of contracts. There’s a big contract, um, coming up in Canada, which I’ll get to in a minute, but they’ve, they’ve got operations not just in Canada, but uh, different parts of the world.

Canada’s about 58% of their business, though the US is about 31% Q eight Mexico, Panama, together make up about 11%. I think they’ve got some stuff even in Australia, but that’s the majority of it. International rigs. They’ll get a 40% higher day rate and they, uh, they have deals usually three year take or pay contracts.

Uh, they’re locked in, so even if it doesn’t go ahead, they still get some money out of it. The headquarters are still in Calgary, but they’ve got a second hub in [00:20:00] Houston where they’re, um, working a lot of stuff in the US and they’re listing on the New York Stock Exchange. Gives them access to cheaper debt in the us.

Apparently head count sits at about four and a half thousand people today, roughly half what it was pre COVID. But also the alpha automation and all of the rig sharing stuff that they do lets them operate on much lower operating costs and with lower, lower people. I guess, you know, part of the ai, uh, job revolution, but hitting more blue collar guys, why it’s working and why it’s cheap for us.

Uh, they’re generating a lot of cash. Um, operating cash was US 480 million on, uh, 640. $7 million market cap. Their price to operating cash flow is about 1.8 times. So from [00:21:00] our perspective, really cheap. Um, two year payback on a Pr/OpCaf basis, I. And trying to work out why it’s cheap, uh, is interesting, like because the oil price comes and goes, I think it scares off a lot of institution investment.

In the US they, they’re also carrying a lot of, uh, debt, as I said, from this refinancing that they did in 2020, but they’ve also been slashing it. They’ve slashed 750 million debt since 2018, and another a hundred million of high coupon notes a callable in October 25th, 2025, which they’re gonna. Buy off or buy down with their cash.

So, um, they’re spending cash to cut their debt rate and [00:22:00] refinance at much lower rates, so they’re doing a good job of that. But the market, apparently, from what I can tell, looking at some of the analysts comments, the market still suffers from PTSD, from the collapse in. The, like 10 years ago, uh, 8, 9, 10 years ago, when there was a lot of wipe outs, a lot of companies went belly up.

So they’re a bit shy of this, but from our perspective, it looks pretty good. Depends on the price of oil and natural gas. Depends on the rates that they can get, those sorts of things. But even as they are, they’re generating a lot of cash in their, their prices. Quite cheap. They’ve got this project in Canada that I mentioned.

Canada’s got a project called the LNG Canada Project goes live roundabout now scheduled to go live mid 2025. It’s a [00:23:00] $40 billion export terminal for Canadian dollars. That is in a place called Kitty. Matt. Do you know where Kitty Matt is? Tony

Tony Kynaston: of it. Yeah. It’s, um, Northeast, from Memory

Cameron: Northwest coast of British Columbia.

Tony Kynaston: Bridge Columbia.

Cameron: The other east,

Tony Kynaston: thank you.

Cameron: reverse the polarity.

It’s on the other side. Yeah. Yeah. So as I understand it, um, most of the gas that Canada has traditionally has been bottled up and sold into the US Midwest. But what they’re gonna be able to do with this new export terminal is chill it down to a negative 162 degrees Celsius, and then turn it into liquid, load it onto tankers bound for Asia, and coming straight out of this new, um, export terminal in British Columbia.

It’s gonna [00:24:00] cut the, uh, amount of time it takes to get it to. Asia compared with Gulf Coast Roots, and they’re gonna be able to get much higher prices. Uh, in Asia than they get in the US for this LNG apparently. So big deal for Canada Precision already has 16 alpha rigs contracted on a three year take or pay deals as part of this whole thing.

So their, uh, they’ve got some big deals coming up. You know, if everything goes well, they should have a good few years at the very least. So, um. Yeah. What else can I tell you about these guys? Um, there’s a lot of work they have also with the big, uh, super majors as they’re known. The Permian Super majors in the us, Exxon Pioneer and Chevron Hess.

That apparently there was a [00:25:00] bunch of mergers there. Exxon bought Pioneer National Resources for 60 billion US dollars last year, and Chevron is buying Hess Corp for 53 billion US dollars. So they’re, they’re now the super majors. These guys, uh, precision had got some good deals with them as well. So, uh, what else can I tell you about them?

Um. The stock was slumping, uh, recently, but then it beat the street’s. Forecasts in Q1 25 managed to turn around a little bit. It doesn’t have a dividend, so that keeps the income funds away, but the, it’s been doing a couple of buybacks. As well as getting rid of debt buybacks, retired 7% of shares in the last 18 months, and then they’ve, there’s something to do in Canada called the NCIB [00:26:00] Normal course.

Issuer bid basically says they’re allowed to buy back up to 10% of their public float over 12 months, and, uh, PDS have announced that they’re taking up that option for this year, that they’re gonna buy back another 10% of their stock. They re-upped the permit as that says. So they’re taking shares off the market, which, um, is good for shareholders.

Um, I know Warren prefers that to dividends, right?

Tony Kynaston: Correct? Yep.

Cameron: Buybacks,

Tony Kynaston: get a

Cameron: I.

Tony Kynaston: get,

more share of the profit. So the price should rerate.

Cameron: Yeah. Bottom line from our perspective is a lot of cash, uh, coming out. Uh, it’s the, you know, their rigs are getting smarter and smarter. They’re getting rid of their debt, um, and the market’s steering clear of them. For I, from what I can tell, just because oil-filled services are, uh. You know, [00:27:00] sort of touch and go.

of them have gone

bust.

Tony Kynaston: um, we have similar companies in Australia. very well this year. a drilling company in Australia and um. Uh, sure they’re cyclical. If the oil price drops, there’ll be less drilling for oil. That’s pretty obvious. And one of the key metrics that people should look out for in a company like this is the utilization rate.

So they might own a hundred drilling platforms, but how many are being rented out at any one time is the important thing. And for how long? So, um. I, I dunno if you came across a utilization rate, but you’d want it to be very high a company like this. So that’s one thing to watch if you’re gonna invest in this company.

But I imagine moment the, your price price is getting up there. So the utilization rate should be pretty good, I would’ve thought.

Cameron: At the moment, their US utilization rate is only 55%. Um, which means.

Tony Kynaston: Why the stock isn’t being bought then [00:28:00] properly.

Cameron: Yeah, but they’ve also means they’ve got a lot of upside.

the shell price goes back up, Ron,

the oil price goes back up, which it did.

Tony Kynaston: lots of cash now with half the rigs in the US sitting idle, that’s a, that’s actually a good sign. I think

Cameron: Yeah. Maybe. So anyway, uh, let me go through the numbers. Their PE is 10.5, uh, which, you know, is, is pretty low I think, compared to some of their peers. Price to operating cash flow, as I said, is 10.8, which, uh, sorry, 1.8, not 10.8. 1.8. So, uh, that’s very, very. Uh, cheap. From our perspective, free cl free cash flow yield is sitting around 40%, so if you strip out their maintenance CapEx.

They still have about [00:29:00] 259 US million dollars a year, and if you look at their valuation of about 647 US million, you’re banking about 40 cents on the dollar,

which is pretty good. Return on equity is 6.6%, which is pretty low, but the rigs are fixed cost so. The more utilization they can get out of them, or if the day rates can get jacked up by a little bit.

The profit balloons, you know, the fixed costs that they’ve already bought and paid for, really. So they, they have a little bit of manpower, but the, the, these high tech rigs, uh, you know, not as requiring of, um, manpower and they can also jack up the day rates. I said if, if. There’s suddenly a big

bump in oil prices.

Tony Kynaston: much about, uh, this company, but I imagine if they’re [00:30:00] high tech rigs, they’re, they’re asking a higher price than some of their other competitors too, which might be an issue for them. If. If, if the oil companies are sensing that or they’re doing it tough, they might go for the cheaper option.

I’m not sure.

Cameron: Well, my take on it is these are the cheaper option because they require, they’re, they’re, they’re faster and they require less manpower, and they, they, they’re not unique in this. There are a lot of, not a lot, there are other competitors producing similar sort of high tech, highly automated things. They’re not alone in this, but it’s not a hugely crowded space.

Either, and they’re one of the, one of the guys on the cutting edge on this.

Tony Kynaston: Yeah, I mean that, that whole of business approach is the right, right way to look at it. But I ha you know, experience says that people will still take a cheaper option if they’re squeezed and if they’ve got, you know, staff sitting around, they can utilize, they might, they might happily not [00:31:00] maximize their profit overall just to save some short-term costs.

Cameron: As I, well, what I gather from this is they don’t have staff, you know? Um, these guys, I think crew, a lot of the rigs as well,

Tony Kynaston: Right.

Cameron: the,

it’s optional, but I think they provide a lot of the crew as well. So you, you just, yeah, yeah, yeah. Soup to nuts. You just buy the thing, you know, you just bring these guys in and they run the operation for you.

You just. Do whatever else there is to be done, I guess take the oil and refine it or distribute it or, you know, probably outsource all of that as well. I don’t know. The price to book is 0.52, so it’s, uh, very, very low on the negative side. Their Altman Z score is 0.18. So we tend to ignore the Z-score, but it is in classic distress territory means that, uh, if anything goes wrong, [00:32:00] they could go and they can’t pay their debt.

They could go belly up very quick, but that’s why they’re paying off the debt. I guess. They’re trying to pay down their debt as quickly as they can, which will lift their Z-score over time. That said, the, uh, health score, the F score is six

above our hurdle. So we like that stock rank in the quality rank are all pretty middle of the road.

Stock ranks 54, quality ranks 49, so not rated high in that respect, but um. Our, our quality score is a little bit higher. Dividend yield is nothing, as I said before, not really paying a dividend, but the, um, operating cash flow per share is, uh, pretty good. Anyway, let me, oh, by the way, the, uh, Pr/OpCaf, not the prop calf, the um.

A DT is about $6 million a day, so a lot of liquidity in it. Um, lemme run through the numbers. [00:33:00] Um, what haven’t I told you about? Um, prop calf we did, gets a score for that quality rank. It doesn’t score for it’s below 60 stock rank. It doesn’t score for, does get a score for the f, doesn’t score for the z.

Um, price is, as I said about 48. The IV one is $32, so the price isn’t lower than our intrinsic value number one. Um. It’s also does not score for IV number two. Let me just check that these, I had to redo the numbers on these to adjust for the currency. Uh, let me see.

Yeah,

Tony Kynaston: for

Cameron: IV number. Yeah, IV number two when I recalculated it was $40 and the price again is at [00:34:00] 48, so it’s doesn’t get a score for that.

It did get a score for that. Um, in the original run, but I had to back that out. Um, does have a new three point upturn as well as a positive three point trend. Uh, growth over PE doesn’t score for that price less. Oh, what just happened? Just. I broke my notes Price over book. Uh, yes it does score for that.

And the checklist is all currency converted for that, so that one is good. The other one I had to check was Forecast IV greater than two times. Price and Forecast IV is. 23 do. Hold on. That’s not right.

What’s the forecast IV again? Forecast IV is [00:35:00] $40 B 13. That’s when did I get, no, that’s IV one. You dummy forecast IV is.

$40. All right. Um, two times the share price would be $95, so it doesn’t score for that either. Uh, what else have I got? Book value growth. It does get a score for book value growth. Um, book value growth has been good.

Um. Uh, PE is not less than the yield ’cause the yield is zero. Um, the yield is not greater than bank debt ’cause the yield is zero.

So, all told I, when I redid all of the numbers, we gave it a quality score of [00:36:00] 53%. Not terrific, not shooting the lights out, but a QAV score because of the very low prop calf of 0.29.

So

still, still came out good, but yeah, it’s like, it’s one of those ones that, yeah, there are some risks there, but it’s generating a lot of cash and it has some potential upside, been around a long time.

Seems to be really well managed. As I said, they, you know, I was impressed with the way they got through the, um, shale crash in, um. 2000 16, 2 17, cut their costs refinanced. Now they’re paying off the debt, um, getting back on a solid footing. And we have cell mechanisms in place if we get it wrong and they go belly up like nl, which is down 10%.

So you talked about it, but, uh, yeah. Anyway, so that’s, uh, precision drilling. The, [00:37:00] the, the Tesla or the BYD of, uh, the oil, the land oil rig business.

Tony Kynaston: Yeah. Well, should, you should go and watch Landman now about the, the land rig business. Yeah. What they do there, they don’t have, uh, oil rigs, anything like you are describing, but they do have a company that sends crews out to, to work the rigs and check on them, et cetera, et cetera, and they battle off car, they battle with cartels who don’t like to be interrupted in their businesses and yeah, it’s show.

Cameron: What was that again? It’s a TV show that’s on SBS or something you watch.

Tony Kynaston: No, that’s on, uh, paramount

Cameron: Oh, oh, right. Land. It’s, and it’s a, oh, it’s a, it’s a, it’s a dramatic series.

Oh yeah. Right. Yeah. You told me about that. Landman.

Tony Kynaston: Hmm.

Cameron: Okay.

Tony Kynaston: Good

Cameron: Anyway, we don’t own PDS, it’s not in our portfolio. ’cause [00:38:00] I haven’t had to sell anything and buy anything recently and we are fully invested.

But, um, I would, you know, I kinda liked it. I was in, I was impressed with, uh, with all of that operation. It was, uh, cool. Not that I think oil is great, but, uh, for the moment it seems to be. Part of the energy mix, whether we like it or not.

Tony Kynaston: No, I agree. Now, if you don’t like All Ords, then don’t buy the stock. But, uh, you for that. It was very interesting. And

Cameron: Hmm

Tony Kynaston: to my

oil industry.

Cameron: hmm. And I can highly recommend go jump on YouTube and watch some of these videos about these automated oil rigs and see how they run. Like it’s crazy. I mean, in my head I think oil rigs are dirty and guys out there with. Pumps and levers and you know, these guys are like, beep, beep, beep, beep, beep.

And it’s all happening and it’s uh, yeah, as I said, running oil rigs from Houston, you know?

Yeah,

Tony Kynaston: couldn’t an [00:39:00] all rigg worker in Calgary. It’s a very cold place up

Cameron: yeah. Right.

Tony Kynaston: Fin the ski fields in Alberta and all that. Yeah. Which is where Shell was based in Alberta. I had a, a boss who, who had come back from Calgary working for Shell, and uh, regularly said it got to minus 45 degrees and everyone pretty much lived underground, so didn’t

Cameron: Wow.

Tony Kynaston: sunny,

is in Australia, but anyway.

Cameron: Hmm. Yeah, no, and like the whole walking, um, oil rigs thing blew my mind. Like I. It’s like something outta Star Wars. It’s like, uh, you know, huge machines that can get up and move. It’s cool. Anyway, well, that’s all for QAV America this week. Tony. Good luck to everyone in America. Happy bombing. Um, hope you’ve taken a break and you’re bombing for a while.

Tony Kynaston: Happy

Cameron: Yeah. Happy [00:40:00] Nissy.

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