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Strategies & Market Trends : Contrarian Investing
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To: gcrispin who wrote (211)9/17/2006 12:22:29 PM
From: jsabelko  Read Replies (2) of 4080
 
Gcrispin,

Thanks for your efforts in having a look at udrl. I like UDRL precisely for their horiz and underbalanced capability but certainly GW also has it merits. Both UDRL and GW have strong balance sheets with minimal debt so to me not a concern for either. I agree the EV/ebidta for gw is lower and I do like this valuation criteria. However, once you factor in the 275 million in convertibles GW carries either as debt or 42 million of share dilution the difference is not as large as it may appear on first glance. I can't comment on worker safety but yes certainly UDRL had an incident. One would have to look back at their safety history vs industry to understand. I would say though that as far as history yes udrl was founded in 1997 but it was done as a buy out and the predecessor firm had been in operation since the 1950's. With all that said, I'm very interested in all the drillers pten, gw, unt, udrl. Each seems to have their pluses and minuses. One thing I would like to understand better is why udrl rigs seem to be hired out for roughly 1/2 the day rate as GW's or PTEN's. Are they all lower horsepower or is it that a large majority are in appalachian area where rates are lower or some combination of both. If it's primarily the latter that may change slowly as udrl is mobilizing its rigs out of appalachia to deploy them in "more attractive regions'. In any case thanks again. I think I may start nibbling a bit next week on a few of these.

joby
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