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$2.80 hughes drilling limited

they never pm mainteance ,only when clients called tyem on it

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stitches11

92 Posts.

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13/02/17

22:48

Post #: 22583189
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Originally posted by OilNut ↑

To adress your points:
- Hughes does not capitalize maintenance, it's part of opex.
They mention it in old presentations, but it is often clear in the cashflow statements. To adress your question about capex, nope, they also increased inventory quite a lot. That also requires "capex".
- inventory went up quite a lot because they expand their operations. More working rigs = more inventory. Is in almost every business. And more revenue at express hydraulics again means more need for inventory.

One thing that could get impaired seems to be the rigs themselves, but that is only the case if the value they are put on the books for would not get recovered. That would really surprise me since all rigs are fully utilized.

One more thing about Hughes. They use preventive maintenance (that is why they have a rotation in rigs, and always have some rigs in repair).
And preventative maintenance appears to be a lot harder to "capitalize" then a complete "haul over" like many other players in the drilling business do.

The reason for the preventative maintenance is to increase uptime and reliability.

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they never pm mainteance ,only when clients called tyem on it

HDX Price at posting: 8.0¢ Sentiment: None Disclosure: Not Held
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