The Company took on a lot of debt when they acquired Gray Wolf in 2008. That deal, plus the collapse of the stock market and oil & gas prices late in 2008, crushed the unit price and forced them to cancel monthly dividends. PDS has weathered the storm. They now have a much stronger Balance Sheet and they are committed to paying down debt even further. Currently, I believe Fair Value for PDS is near $9.50 with a lot more upside if commodity prices move higher.
As of September 30 the share price is down 5% year-to-date despite the fact that the Company is in much better shape today. Check out the June 30, 2010 Balance Sheet and you will see what I mean. The usual seasonal dip in Canadian drilling activity in the 2nd quarter is now behind us. Investors will soon be looking for the second half of 2010 results, which will be much stronger.
Rig utilization in both the U.S. and Canada has been increasing and I expect that to continue unless there is a significant drop in natural gas prices. PDS is in position to gain market share during the next cycle.