Returning to the market focus...
If it is true that the pace of the decline... is tied to the nature of the driver ?
The driver is... the virus... Nothing else.
And, if China is at all a useful measure (and I question that assumption)... they're just now emerging from the worst of it... not saying its over... after a three month long ordeal... while in the U.S. we're just now ending month one in the preliminary round, still going into it with many unaware of what's coming, in scope, at least... Maybe we should be timing it here from the return of the CDC enabled Chinese returnee vectors and the Disaster Princess disease vectors ?
If any of that is right... then... we should see an acceleration into the the worst of the downturn over the next two months... and then see a fairly rapid (?) rebound ?
Oil prices might follow a similar vector in a mirror image higher... but, will do that only when the economy isn't being smothered by virus worries ?
Then, the key concern in the oil patch would be picking those issues able to withstand taking a quarter off ? And then afterwards, dealing with prices rising, but still below break even for a bit... while all the revenue goes to servicing debt ? At least having a target for the timing enables starting work on a sorting... that gives you an ability to monitor the probabilities as events unfold... in the time they do...
Leverage, then... in oil services... with drilling that isn't pre-paid or tied to really deep pockets being put on hiatus... obvious options plays, including playing the timing elements with risk abatement strategies... Expect a similar disproportion in excesses in trading producers in this ugly market... where the leverage inherent in the shares is suddenly working against you instead of for you...
FWIW... I dipped a toe in today... bought shares at just under $0.31...
I've bought this three times at around a dollar... in 2006 and again in 2007... demurred at $2 in 2017, but called it a buy at $1 in 2019 with a caveat... the caveat being "if oil prices sustain the trend higher"... and of course they didn't... so that trade got closed out. They've got $100 million in cash, $700 million in debt... and have already spent the money required to generate operational improvements that are in place, that should be falling to the bottom line starting now... except for the market implosion...
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