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Strategies & Market Trends : Value Investing

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From: gcrispin	9/13/2007 11:58:25 PM
	of 78747

I bought some GW today. I like the metrics and like the premium type of rigs that GW owns as they are known for their deep drilling rigs with 1000+ horsepower. The company has strong cash flow with an enterprise value to EBIDTA below three. GW has a strong balance sheet and has been buying back stock. finance.yahoo.com The company recently presented at a Lehman Bros. conference. A couple of points on the industry, as a whole, were highlighted. Sixty percent of gas production comes from onshore and is increasing. It is also taking an increasing number of wells to maintain production. Some argue that drilling rigs are more efficient, but drilling have become more complicated with almost fifty percent of the wells are drilled directionally or horizontally. Wells now have smaller reserves and deplete faster. Fifty percent of the reserves of a new well will be depleted within one year. So I think the bigger picture overshadows the cyclicality that has pushed the drillers' stock prices down.

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