Replies to post #15955 on Value Microcaps Motherboard

[Bobwins]

2morrowsGains re ECH.to. Nice oil services firm with a different niche. Oil field drilling fluids and chemicals.
Had a nice q1 with C$.10 vs .07 last yr. Big increase in gross revs as drillers were busy. Said production of their special drilling fluid was restrained due to lack of high quality crude. Lowered revs by 10% so there is more upside.

My question is impact of q2. Canada had an early thaw and drilling was slowed in March. Then they had abnormal rains that slowed drilling after the thaw. Q2 is bound to be down from q1. How much is the question and whether Canadian investors expect it. 52week high is 3.60 so we are not at the very top of the range but still up there at $3.

I think any weakness from q2 would be short lived as drilling increases in following qtrs should be very strong. Last year dropoff from q1 to q2 in gross revs was half!!!Only loss last yr was q2. Except they are dropping from such a high level, they may still be profitable at 2005 levels.

Little bit of earnings risk. I would investigate how market reacted last year to loss and see if it's worth the risk. This is a nice little company. Bobwins

[kozuh]

2morrowsGains, Re: ECH.to

In general, Oil and Gas Services companies have much tighter margins than Oil and Gas Explorers, and Services seldom deliver explosive, sustained growth.

With the possible exception of high-tech services companies (seismic, satellite, etc.), I prefer to invest in Gas Explorers and not the companies that "wash their jocks" ((<:}