A year ago, on the brink of bankruptcy, the stock of a small but famous company shot up from about a buck a share to more than $8. As the U.S. military marched through Iraq once again, there were concerns that the country's oil wells would be sabotaged. And with good reason: When Iraqi forces were being driven out of Kuwait during Desert Storm, before leaving they set ablaze 788 wells, nearly all the wells in the country.
If Iraqis had set fire to their own 1,500 or so wells, it would have meant big business for Boots & Coots
Well, the wells didn't go boom, but the company didn't go bust either. The stock fell back to earlier levels, though, and has remained there. Last week, it reported disappointing first-quarter revenue and earnings. Revenue fell to $4.4 million from $10.9 million a year earlier, and net income was $8,000 versus $3.3 million a year earlier. (The prior period included $6.6 million in revenues from equipment sales that skew results this time around.) Peanuts, I know, especially considering what it does to get it.
But here's the thing: With oil more than $40 a barrel, this company could be poised for growth. Oil companies of all sizes, including big names such as Exxon Mobil
In fact, it recently signed a two-year contract to manage training, inspection, and blowout control services for the Oil and Natural Gas Commission of India, which includes 28 offshore and 94 land rigs. That contract begins this quarter. And it is waiting to deploy workers to Iraq where it will be working to help restore the country's oil infrastructure. It had expected to be there already, but there was an unanticipated reworking of the contract for the Restore Iraqi Oil program.
The company hasn't given dollar estimates on the value of these contracts, but they should definitely help out. While this isn't a stock for the faint of heart, it does appear that business may be about to increase substantially.
Fool contributor Mark Mahorney doesn't own shares of any companies mentioned.
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