Grey Wolf a Buy on Merger

Tags: gw, pds
31 Oct 4:52am
Posted by ZacksResearch
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Grey Wolf (GW) reported solid third quarter results on the back of still-strong dayrates and the highest number of average rig count in its history. The company averaged 112 operational rigs during the quarter, up from 105 rigs in the previous quarter.

Importantly, the pending merger with Precision Drilling Trust (PDS) remains on track. The combined entity, to be called Precision Drilling, will be a North American land drilling powerhouse with 371 rigs.

We have lowered our estimates to reflect the expected soft demand outlook for onshore activities in the current low commodity-price environment. Our new 2008 and 2009 EPS estimates are $0.64 and $0.69, down from $0.67 and $0.78, respectively. Our Buy recommendation remains unchanged.

Read the full analyst report on GW



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