Future PE of 16, Trading at half book value now

Oil price recovery

• If oil prices (e.g., WTI or Canadian-crude equivalent) rise back to a healthier range — say US $80-100 per barrel (depending on Canadian costs) — then drilling activity for producers generally increases (they’re more willing to bring rigs online, expand programs).
• For Stampede, this would mean higher utilization of its rigs, more revenue per day, better margins (since fixed costs get spread). It also improves the negotiating leverage for day-rates.
• In that scenario, the stock could see a meaningful rebound as the market discounts future cash flows more favourably.

Gold to oil ratio

• The gold-to-oil ratio is a macro indicator: how many ounces of gold equal a barrel of oil. Some investors use it as a signal of commodity-cycle health or inflation/deflation expectations.
• If gold is high and oil is low, that might imply weak demand or excess oil supply (or inflation hedging dominating). Conversely, if oil is relatively high and gold stable, it suggests healthy industrial/energy demand.
• For Stampede, the implication is: a favourable gold-to-oil ratio (i.e., oil strong relative to gold) would be a signal of stronger upstream investment and thus higher drilling demand. That could boost the stock.
• If the ratio flips the other way (oil weak relative to gold), then drilling services suffer.

Normalization of price

• Once oil and drilling demand normalize (i.e., their highs of $100+ and lows of $50-60 settle into something like $70-90 for oil and better day-rates for rigs), Stampede’s stock could “normalize” upward from its depressed levels — i.e., the market would begin valuing it more like a growth/leveraged‐to‐commodity opportunity rather than a distressed one.
• That said, “normalization” doesn’t mean going to ultra high multiples. Given the cyclicality of drilling services, the market will likely assign moderate valuation multiples, with premiums when utilization is strong.

🎯 My view / fair outlook

Putting it all together:

• If oil recovers to a more robust level (let’s assume ~$90-100/bbl) and remains there for a sustained period, then Stampede could see its utilization increase significantly, margins improve, and free cash flow rise.
• The market might then reward the stock with multiple expansion (from depressed levels) and increased earnings.
• However, because stock performance depends on many variables (oil price, drilling day-rates, rig days, Canadian vs US differential, cost inflation, company execution), this is a conditional outcome.
• Likely conditional outcome with a gold to oil ratio of 40, would lead to this company breaching 1$, just off of existing delayed contracts and fully utilized rigs.

WORST Case Estimated Total Liquidation Value:

If we assume the liquidation occurs in a moderate market (not booming oil prices but not a deep recession either), here’s a rough estimate:

• Drilling rigs and related equipment: CAD $30 million to $80 million (depending on age, demand, and market conditions).
• Assets under construction: CAD $5 million - $7 million.
• Other equipment & infrastructure: CAD $5 million - $10 million.
• Receivables and current assets: CAD $10 million (or more depending on outstanding debts accrued imminently).

Total Estimated Liquidation Value: Between CAD $50 million to $120 million, but this could swing higher or lower based on market conditions and the speed at which assets can be sold.