We have guys like Jim Cramer who has the ear of so many investors via his CNBC program touting energy picks, and those involved in shale gas in particular (like Chesapeake Energy) somehow overlooking the very company whose drilling rigs dominate every one of these plays -- Helmerich & Payne! Amazing!!!
HP has visibility into new rig builds going out for a decade! This accoring to Hans Helmerich during the last conference call. And for a conservative guy like Mr. Helmerich to make such a statement, you can pretty much depend upon it as the sun rising in the east!
HP has the potential to sell rigs around the world as modern fracking techniques, which go hand-in-hand with horizontal drilling, which is sonomonous with HP FlexRigs, make shale plays the new frontier in energy worldwide! As large as the company has grown in recent years, it will have a difficult time keeping pace with growing demand for their product. If a buyout offer were ever made that had a chance of being approved, it would need to be at a very attractive premium.
Oh don't get me wrong Gambing2m, I am very pleased with the recovery in HP's PPS. But for anyone who has followed HP for any length of time, we know that this company does not get the respect (aside from those that are close to the industry) that it deserves.
For an idea of how far ahead of the competition HP really is, do a bit of research on their main competitor, Nabors. Nabor's PACE rigs are their answer to HP's FlexRig. HP has at least a decade long head start on Nabors in terms of perfecting horizontal drilling equipment and techniques. Compare forward earnings estimates of Nabors and HP. The earnings multiples given HP suggest it is grossly undervalued.
The take-away? Don't be satisfied if HP recovers to $70 per share. We should be looking at $100 in the not too distant future!