• Q2 revenue was up 3% YoY, beating our estimate by 1%. EPS was up 2% YoY, but 9% lower than our estimate, due to higher than expected interest expenses.
    • As this company announced several new contracts from tier-one clients in the past few months, we are anticipating strong revenue growth in H2-2023. Note that Q1 and Q4 are historically stronger quarters due to seasonality.
    • Oil prices are up 17% since our previous report in May 2023. Per consensus forecasts, oil prices should remain well above historic averages throughout 2023 and 2024. Advisory firm Evercore estimates North American oil and gas CAPEX spending will increase 18% this year. We believe higher CAPEX spending should directly benefit service providers such as this company.
    • Upcoming catalysts include strong Q3 results, and increased CAPEX budgets at oil and gas companies. this company owns $46M in equipment and property assets. However, this company’s EV is just $36M, implying that shares are trading below hard assets. We believe the likelihood of a M&A attempt on this company has increased significantly.
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