Do what you do best and outsource the rest
Treaty went from having an in house drilling division for hire, to completely outsourcing that activity to TNC who has a list of blue chip clients.
The original premise of in house drilling was that it would give the company the flexibility to do multiple projects at once and for a lower cost. Having suffered through all the oil field underperformance and such throughout 2011-2012, I'm glad to see that they have ditched that strategy.
Treaty is very good at finding and funding oil projects, which in itself is very difficult. There's institutional money behind the project funding in the form of private loans. The jury is still out on how good they are at producing oil, but working with TNC at should at least allows the company to get projects moving on time.
That is important because I would rather know sooner rather than later if a project is a success or a bust. Underperforming wells are just a part of the business, the bigs have their losers, too, nobody bats 1000 in this game.
However, if the company can cut it's losers faster that means that it can move on to finding it's winners faster. If you are a sales guy or a trader you don't want to waste your time on someone who will never buy from you or a position that is not going to play out for you. If I am going to lose 99 times in a row before I get my winner I would like to do it as quickly as possible.
So, I'm glad to see that Treaty has learned from their mistakes and has taken concrete action to put us on the path to victory. I still don't give a crap about what the market says about the price, I'm focused on how much oil will be coming out of the ground next year and years down the road.
"TNC's premier client list comprises some of the major names in the oil and gas industry, including: BP America, Inc., Marathon Oil Company, XTO Energy, Chesapeake Operating, Inc., Sandridge Energy, Inc, EOG Resources, Inc., Whiting Oil and Gas Corporation, Apache Corporation, and Linn Energy. TNC combines the highest quality state-of-the-art drilling equipment with the most experienced and proven drillers, technicians, well-hands and supervisors."
