LOL, well I’m more than glad to be criticised for not having a position in a falling stock. I don’t do this to lose money. So I’ll take that negative statement, as a positive to my investment strategy, and I thank you.
As stated previously, I did politely warn members on the 30/4 of the conditions and to reconsider their own positions. Chaddy36, you’re the only person so far to declare their honest conviction in this stock, and though we differ in opinion, I salute you for that (PS: I gave you a thumbs up).
Market conditions are significantly different to the post GFC environment. There will be no bounce back, as there is just is not that much work out there, the supply and demand curve is now against BLY. As long as rigs are not drilling and machines are not producing consumables sales and rig utilisation will be down for the foreseeable future. If you disagree, I’m sorry, but please use this forum as intended, and let’s get a balanced discussion going.
Run the numbers, the last declared rig utilisation was 57%, what impact would that have on the company if maintained for 12 months (a what if worst case scenario). With utilisation down, consumable products would be as well, so run a conservative estimate of 40% less sales. Remember DTQ’s statement I highlighted to you, so when you run the numbers remember the rigs are running in a tighter market, so average turnover will be lower. Then get on the phone and cold call drilling companies and consumable sellers and get an industry insider’s opinion. It’s worth the effort to find out how much they’re selling or how many rigs they have in the field (have big shoulders as some are quite hostile).
Just one more thing to think about. We’ve seen what it costed the company to raise the turnover per rig. They’re now dramatically reducing staff numbers. What cost will it take to get rig utilisation and turnover back up to previous levels? With considered debt in the background, I think it’s worth breaking out the calculators for.
BLY Price at posting:
77.0¢ Sentiment: Sell Disclosure: Not Held
