Expect to see a jump in the penny stock of Vantage Drilling Co. (Nyse AMEX: VTG) on Monday after the offshore driller announced the closing of its acquisition. Vantage Drilling, one of the premier offshore oil drilling companies, announced after the market closed the Luxembourg branch of its wholly-owned subsidiary closed the deal and accepted delivery of the Titanium Explorer, a deepwater drillship f.k.a. the Dragonquest. The penny stock of Vantage Drilling, VTG, closed at $1.49, down a nickel, on volume of 954,439 shares traded.
Vantage Drilling, which reports Q1 earnings at the end of this week, has seen its penny stock rise 28.45% YTD. Offshore drilling for oil has expanded exponentially and with Vantage to soon be drilling in the Gulf of Mexico according to their website, revenues should increase just as well. A good earnings report could send the driller over its 2 year high of $2.25.
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VTG Stock Snap Shot:
Market Cap: 434.27M
Enterprise Value: 1.57B
Price/Sales (ttm): 1.18
Price/Book (mrq): 0.64
52-Week High
(Jun 1, 2011): 2.02
52-Week Low
(Aug 9, 2011): 0.97
% Below 50-Day Mov Avg:
-2.71%
% Above 200-Day Mov Avg:
15.01%
Avg Vol (3 month): 1,441,390
Avg Vol (10 day): 987,938
Shares Outstanding: 291.46M
Float: 164.73M
% Held by Insiders: 41.39%
% Held by Institutions: 43.30%
Shares Short
(a/o Mar 30, 2012): 8.86M
One of the best things to look at with oil drilling companies is how they actually make their money. Vantage Drilling Co.’s contracts are day-rate contracts which is excellent since a fixed rate per day is charged regardless of the number of days needed to drill the well. Vantage has no plans to change their current structure which is what will continue to allow them to produce big strong top and bottom line numbers on their income statement ads you can see below.
A Look at Vantage Drilling Co. Income Statement:
(amounts in Thousands)
| 2011 | 2010 | 2009 | |||||||||||
| Revenue | $ | 485,348 | $ | 278,403 | $ | 111,493 | |||||||
| Operating costs, excluding impairment and termination costs | 284,400 | 176,387 | 66,228 | ||||||||||
| General and administrative expenses | 26,317 | 21,719 | 15,690 | ||||||||||
| Depreciation | 64,477 | 33,384 | 11,218 | ||||||||||
| Income (loss) from operations | 110,154 | 46,913 | 18,357 | ||||||||||
That’s $485.34 million in revenue and $110.15 million in operating profit. revenues almost doubled compared to the same period the year before and more than quadrupled from the same period in 2009. Analysts are looking for a consensus estimate of $128.66M in revenues for Q1 and EPS of -0.01. If Vantage Drilling indicates in any way that revenues could come in above the high estimate of $132.60M, hold on to your seat because it is gonna be a wild ride on the way to $2.00.
To view the SEC filings for Vantage Drilling, click here.
Bottom Line: Add VTG to your list of penny stocks to watch and look out for any indication of earnings projections before the 30th when they are due out. Oil drillers and pipelines are where the money is in Oil and the recent announcement of a new drillship member to VTG‘s oil drilling fleet could be just enough to send the stock back towards testing $1.56.
If VTG can break and hold off $1.56, the next step for the Nyse Amex penny stock is $1.63.
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