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I have been following Gray Wolf for some time and often find myself wondering why the market doesn't like this little company. True, natural gas companies as a group are out of favor with the market. But even out of favor segments have good companies and Gray Wolf is a solid little company which has done all the right things to improve bottom line. They have reduced debt, leased their cold-cap riggs at more favorable rates, Gray Wolf is a profitable company wht consistant growth and a PE below its 5 year average.

 

As for those over stocked natural gas supplies, the supposed surplus was based on the idea that we were going to have a mild winter. Winter isn't offically here until Dec.21, but late fall is turning out colder than expected. I wouldn't bank on mild winter weather. Who knows what nature will throw at us?

 

What we do know is that GW is maxed out drilling, they have a strong supply of turnkey operations, lots of long term contracts, and are building new riggs that have long term contracts to pay for them. The demand for drilling exceeds the supply of drillers and the price of gas is going higher.

 

I don't know why shares have traded in the same narrow range for more than a year but I do know that companies reducing debt and growing at the rate this one is should not be stuck in this range. Sooner or later the market is going to figure that out.

 

 

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