McCoy Global Inc: Questions to Jim Rakievich | Value Bridge

Capital Allocation

03/04/2023 Does McCoy plan to use its cash going forward?

McCoy plans to deploy capital to grow the business organically, invest in technology, pursue strategic acquisitions, buy back shares, and potentially pay dividends.

03/04/2023 What is the status of McCoy's technology roadmap funding?

Most of the capital needed for the technology roadmap has already been deployed, and the remaining development can be funded through cash flow.

03/04/2023 Is McCoy considering acquisitions?

Yes, McCoy is actively looking for strategic tuck-in acquisitions to grow the business.

03/04/2023 Will McCoy return capital to shareholders?

Yes, McCoy is considering share buybacks and plans to introduce a dividend provision at the next AGM to return capital to shareholders.

08/08/2024 Where has the company been allocating its cash since Q4 2022?

Since December 2022, the company has invested over $5 million in rental fleet, which delivers strong returns. It has also returned over $3 million to shareholders through share buybacks and increased dividends. Additionally, cash has been invested in strategic inventory for new technologies, especially long-lead items needed to maintain a first-mover advantage.

08/02/2024 How does McCoy Global allocate capital?

We prioritize growth through R&D and strategic acquisitions, invest in our rental fleet (which has great returns), and return cash to shareholders through share buybacks and dividends.

31/10/2024 Can you explain the current share structure and dividend?

We reintroduced a dividend a few years ago starting at one cent per share, increased to two cents last year, which is about a 3.5% yield now. We also return capital through share buybacks, having bought back 1.6 million shares last year at an average price of $1.46.

22/10/2024 Why did McCoy reinstate a quarterly dividend?

After funding growth and capital needs, excess capital is returned to shareholders through share buybacks and a modest, conservative dividend to reward shareholders.

22/10/2024 How much has McCoy bought back in shares recently?

Last year, McCoy bought back 1.7 million shares, about 10% of the float, at an average price of $1.47. The normal course issuer bid was renewed for another 12 months.

28/03/2025 Why do you prefer dividends over buybacks, or how should investors think about the balance between the two?

We use a formula to decide when to buy back shares, based on market conditions and our balance sheet. We review this every quarter with the board. If the stock price is attractive, we buy back shares, which we see as a good way to add value. Dividends are nice, but buybacks are preferred because owning more of McCoy is better for shareholders. We also consider acquisitions and market valuations when deciding capital allocation.

28/03/2025 What are the plans for the $17 million on the balance sheet?

Capital will be used for organic growth, product development, rental fleet investments, and possibly M&A. Rental demand is growing due to shorter customer contracts. We are patient on acquisitions due to valuation challenges.

31/05/2025 What recent purchase order did McCoy Global announce?

We announced a $11 million purchase order for Smart TR packages for the US land market from a single customer.

31/05/2025 Will the $11 million order include SaaS revenue?

The $11 million is for equipment delivery by the end of the year. The ongoing revenue from SaaS will come later as that part of the business matures.

Competitive Advantage

03/04/2023 What is McCoy’s core competitive advantage?

McCoy’s core strength lies in its deep engineering expertise and extensive knowledge of casing running applications. The company has retained its critical core team through industry cycles, which is vital for consistent success.

08/08/2024 Can you explain what the flush-mounted spider is and what problem it solves?

The flush-mounted spider is a safety and efficiency tool that removes two people from the most dangerous area on a drilling rig, called the Red Zone, reducing risks of injuries. It also cuts labor costs by allowing one person to remotely operate the tool. Furthermore, it improves communication with the driller and reduces the chance of dropping the string.

08/08/2024 How does the flush-mounted spider fit into a larger technology platform?

It’s part of an integrated smart casing running package designed to automate casing running processes, which have remained largely unchanged for 50 years. This platform aims to reduce labor costs, improve safety, and enhance wellbore integrity, especially in North America and globally in land applications.

31/01/2024 What makes McCoy Global unique compared to its peers?

The most important thing is our people and expertise. We have probably the largest group of application-experienced engineers, including mechanical engineers, software writers, and data acquisition experts. We operate internationally with hubs in North America and Dubai, and we offer the broadest range of products related to what the end user needs.

08/02/2024 How does McCoy Global’s product set and services differ from competitors?

For legacy products like hydraulic power tongs, competition is strong but we have a large installed base, especially in the Middle East. For other technologies, we have unique features and physical presence in key regions with local support and spare parts. We aim to be a one-stop shop, offering integrated technologies that work well together, so customers don’t need to shop elsewhere.

08/02/2024 Why did McCoy Global decide to offer a broad range of products instead of focusing on just one or two?

Because we can best serve customers by being a one-stop shop. Our technologies work well together, so customers get better service and integration by buying from us rather than multiple suppliers.

31/10/2024 Do you have data showing your product improves safety on rigs?

Yes, safety is a priority globally. Our technology removes six people from the rig floor, especially the dangerous Red Zone. In North America, 53% of lost time accidents in oil and gas service happen in West Texas alone, so reducing personnel there can significantly improve safety.

31/10/2024 Has a large customer in the Permian Basin adopted your Smart Hub technology?

Yes, the largest player in the Permian Basin has ordered and accepted the most FMS units and is keenly evaluating the Smart Hub package for their business model.

22/10/2024 How is McCoy unique compared to competitors?

We are unique because we offer a full suite of casing running technologies, mechanical, software, and all related tech. While competitors may have one or two products, we provide the complete package. We also have a strong physical presence in the Middle East, offering customer support, technical sales, and distribution, which is hard for competitors to replicate.

22/10/2024 Are you a one-stop shop for casing running solutions?

Yes, we are a one-stop shop, unlike competitors who may only offer niche products or parts of the suite.

22/10/2024 How does McCoy maintain its leadership in technology and products?

Customer engagement is key. We listen closely to customer challenges and develop solutions that solve real problems, ensuring our R&D is focused and effective.

28/03/2025 What cost savings do clients get from buying the whole package including SaaS?

For example, the FMS tool reduces the need for two workers in dangerous zones, improving safety and allowing operators to charge a premium. Pricing evolves as customers recognize value.

28/03/2025 Is there a requirement for automated technology in the Middle East and what about competition?

No requirement for automation yet, but hydraulic CRTs are required to replace mechanical ones. Safety is increasingly important, and penalties for injuries are severe. We see a strong market for our automated tech in the Middle East.

31/05/2025 How do you view competition in your market?

Competitors will try to replicate individual products, but we have IP on almost everything. Creating an integrated package like ours will be challenging for them. We are currently the largest or second largest in most individual product lines.

31/05/2025 Are your customers’ customers demanding your technology?

Yes, major energy companies (EMPs) are demanding it. For example, in West Texas, some EMPs require the McCoy tool for casing runs, which is a strong endorsement.

Operations

03/04/2023 What is the biggest operational challenge McCoy currently faces?

Supply chain issues remain the biggest challenge, particularly with lead times for exotic steels, forgings, and specialized raw materials. While shipping and logistics have improved, unpredictable supply chain delays still cause concern.

03/04/2023 How much labor cost savings can clients expect from McCoy’s integrated casing running package?

Clients can expect to reduce labor costs by approximately 75%, cutting crew sizes from eight or nine people down to two or three, which represents significant efficiency gains.

08/08/2024 Does the company have enough inventory to support initial trials and demand?

Yes, the company currently has prototype tools ready and sufficient inventory to support initial customer trials. As orders increase, they plan to ramp up production accordingly.

08/08/2024 How will machine learning be integrated into the casing running process, and what benefits will it bring?

The company has developed machine learning software that uses historical data to automate decision-making traditionally reliant on human experience. This reduces errors and improves efficiency by guiding operations such as connection quality and slip control, addressing the shortage of skilled labor in the industry.

31/01/2024 What is the history of McCoy Global?

McCoy's been around for well over a hundred years. It started as a family business in Edmonton and is now in its third generation of the McCoy family. It was sold to private equity in 1995, which then took the company public.

31/01/2024 What markets does McCoy Global serve?

The company, originally from Edmonton and Alberta, has focused on markets related to oil and gas. We have grown and narrowed our focus to being a technology company providing products globally in the oil and gas industry, both land and offshore.

08/02/2024 How are the current technologies siloed and what is the solution McCoy Global is working on?

We started this journey six years ago to solve the problem of siloed technologies. We have acquired expertise in data acquisition and sensors, combined with mechanical and application knowledge, to make smart integrated tools. Individually, these technologies are commercialized; now we are integrating them into one package to improve efficiency and safety.

08/02/2024 How does McCoy Global manage industry cyclicality and pandemic impacts?

The pandemic was a Black Swan event. We understand oil and gas cycles well and aim to stay positive through them. During downturns, we maintain a strong balance sheet and take opportunities like strategic acquisitions. About 40% of our revenue comes from aftermarket parts and consumables, which is steady even in downturns.

27/05/2024 What is the new technology package and its benefits?

The new technology package includes the flush mount spider, which is a hydraulic tool operated remotely to replace manual slips on the rig floor, improving safety by removing the need for personnel in risky areas. The integrated package also includes a smart casing running tool (CRT) that communicates with the flush mount spider and software that handles torque and turn analysis. All components are connected and managed through one screen, allowing the driller to operate everything by following instructions on the screen, simplifying the process and enhancing safety.

31/10/2024 When do you expect to complete the three field trials?

We're hoping to complete three full field trials by December 31, 2024. No guarantees, as it depends on rig availability and well profiles.

31/10/2024 Will there be additional investment in the service side as you roll out the full package?

Yes, we expect growth in service. We already provide training and supervision for customers, and this will increase. There is a high likelihood of introducing more service personnel involved in the field as equipment usage grows.

22/10/2024 What does McCoy do?

We are a publicly traded company on the TSX, involved 100% in the oil and gas industry. We operate globally, specializing in wellbore construction. We provide technology and products to service companies and national oil companies worldwide, focusing on exceptional service and technology leadership.

22/10/2024 Who are McCoy’s customers?

Our customers are service companies globally, including drillers and casing running companies. We provide tools and technology to help them run casing safely, efficiently, and correctly.

22/10/2024 Can you explain McCoy’s core technologies and products?

Every well drilled needs a casing pipe connected with threaded joints. We provide mechanical tools to grip and connect the pipe, plus data acquisition and software to ensure the integrity of each connection meets OEM specs. This is critical for well safety and production.

22/10/2024 How do automation and data solutions help in drilling services?

Casing crews typically have six people running two shifts. Our tools reduce headcount by replacing manual tasks with automated ones, improving safety. Our software monitors every connection’s makeup, allowing operators to stop and inspect if something looks wrong. We also use machine learning to help make better decisions and enable remote monitoring of multiple jobs from one location.

22/10/2024 How is AI integrated into McCoy’s technology?

We have used machine learning in our software for some time. The future is a fully automated smart TR package where software will control all functions. This is already used in deepwater offshore markets and will be brought to land markets. True AI is coming but not here yet.

22/10/2024 How big is McCoy’s team?

Just under 150 employees.

22/10/2024 How does McCoy train customers on its products?

We provide strong customer support with technical service teams that commission equipment on-site, train customer staff, and offer certifications, especially for software.

22/10/2024 Where are McCoy’s main offices and facilities?

Largest facility is in Broussard, Louisiana (hardware production). Cedar Park, Texas houses data acquisition and software teams. The Middle East operations are based in Jebel Ali near Dubai, covering the Eastern Hemisphere with sales, support, and distribution.

22/10/2024 What does a typical day look like for you?

There is no typical day. I start early, around 6 am, to handle emails and prep for the day. Because we operate globally, I often have calls with clients in the Middle East at odd hours. I stay connected with leadership, customers, and investor relations throughout the day.

28/03/2025 What are the timelines for completing the field trials and getting everything in place?

It depends on tweaking and what we discover during field trials. We aim to complete them by the end of Q2, but there’s no guarantee. The mechanical tools are proven, but software may have bugs to iron out. We’ve engaged three customers now to accelerate the trials.

28/03/2025 How do you get more customers to test your products, given the risks and costs?

About six years ago, we updated our torque turn system and included terms allowing us to access data remotely for software development. Customers accepted this with the promise that data is anonymized, protecting their identity. This data is critical for us, and we have lots of it now. Other tools will provide even more data.

28/03/2025 What part of your inventory is subject to obsolescence and how do you avoid it?

Obsolescence mostly affects traditional equipment in slower markets. We write off inventory after 24 months per accounting rules but don’t discard it. We use AI tools to better manage inventory and predict what to buy or not.

28/03/2025 How is your accounts receivable situation, especially with slow-paying companies?

Our DSO is very good for the industry. We take deposits and letters of credit for large orders, especially overseas. We manage collections actively and stretch out our own payments to suppliers. We are confident in our ability to collect.

28/03/2025 Will McCoy maintain the current level of product development support expenditures in 2025 and 2026?

Yes, we have important projects underway with customer deposits. We plan to continue R&D and invest in ideas that generate future returns. We are better at deploying capital efficiently now.

28/03/2025 How do you manage FX impact given the large fluctuations in the last two years?

We are naturally hedged because 95-97% of sales and many expenses are in US dollars. The challenge is translation into Canadian dollars as a Canadian public company.

31/05/2025 Where are your technologies produced?

We produce all our technologies in the US, with some Canadian components assembled in the US. These components are protected under the Mexico-US trade agreement, so we don’t expect material tariff impacts.

31/05/2025 How is your SaaS pricing structured?

Currently, SaaS pricing is introductory to encourage adoption by a major US land market player. As adoption grows, we will reprice based on the value customers receive, similar to how we adjusted pricing for our FMS technology.

31/05/2025 How has McCoy Global’s pricing strategy changed?

We moved from selling commoditized tools on margin to selling on value. For example, the price of our FMS tool has increased twice as we better understand the value it delivers.

Competition

03/04/2023 How does McCoy view its market opportunity in a cyclical industry?

McCoy believes that by offering innovative, integrated casing running packages that improve efficiency and reduce labor costs, they can take market share from traditional methods regardless of industry cycles.

08/08/2024 How is the market in the Middle East and North Africa?

That market remains quite strong with robust quoting activity.

08/08/2024 What’s happening in the deep water offshore market?

After a long downturn, it’s making a comeback. We recently secured a nice contract there.

08/08/2024 Why is revenue growing in the US land market despite rig count declines?

We’re introducing new technologies that customers find valuable, even in a down market, which drives growth.

08/02/2024 Who are the large energy services companies McCoy Global compares to?

Large multinationals like Schlumberger, Halliburton, Weatherford, and Baker Hughes are mostly service companies and our customers. We sell equipment to them but operate in a different niche. Our closest large peer is National Oilwell Varco, which is both a customer and competitor.

31/10/2024 Why are some customers investing early in this technology?

Some forward-thinking clients want this technology badly because they are tired of the high costs and difficulties with casing hands, especially in places like West Texas where many applicants can't pass basic tests.

22/10/2024 Why is it important to clarify that McCoy is a technology and products company, not an energy services company?

Energy services companies are highly competitive with low margins. McCoy provides technology and product solutions to service companies, which positions us differently and allows for better margins and growth.

28/03/2025 Do you see McCoy as a potential takeover target?

As we succeed with new technology, the target on our back grows. But bigger companies often fail to get more out of acquisitions. We focus on running the business day to day and will deal with that if it happens.

31/05/2025 How do you view competition in your market?

Competitors will try to replicate individual products, but we have IP on almost everything. Creating an integrated package like ours will be challenging for them. We are currently the largest or second largest in most individual product lines.

Growth

03/04/2023 What drove McCoy's strong financial performance last year?

The company had a record year driven by growth in their core business and technology adoption.

03/04/2023 Is McCoy considering acquisitions?

Yes, McCoy is actively looking for strategic tuck-in acquisitions to grow the business.

08/02/2024 What is the addressable market and growth opportunity for McCoy Global?

The addressable market is large due to labor challenges, labor costs are high, and experienced workers are retiring or leaving. We are developing an integrated technology package to reduce labor needs, improve safety, and efficiency. We are in the early stages ("second inning") of commercializing this integrated solution, with field trials planned for 2024.

08/02/2024 Where does McCoy Global want to be in 3-5 years?

We want to commercialize and get wide adoption of our integrated casing running package. Capturing 30-40% of the market could quickly grow us to $100 million market cap. We also see opportunities for acquisitions in adjacent technologies. Our vision is to move from microcap to small cap.

31/10/2024 Will there be additional investment in the service side as you roll out the full package?

Yes, we expect growth in service. We already provide training and supervision for customers, and this will increase. There is a high likelihood of introducing more service personnel involved in the field as equipment usage grows.

31/10/2024 What percentage of revenue do you expect from your SaaS model over time?

We don't know yet and don't forecast it specifically, but we expect it to grow as we roll out packages. Margins on SaaS will be very good.

22/10/2024 Which regions show the most growth for McCoy?

Deepwater offshore markets are growing, especially offshore Brazil, the North Sea (Norway), and Southeast Asia. Deepwater drilling is making a comeback after a long downturn. In North America, despite declining rig counts, we’ve seen revenue growth due to new technologies providing value.

22/10/2024 What are the key growth markets for McCoy?

Growth is seen in the Middle East, Southeast Asia, India, Turkey, the North Sea, South and Central America, and the Gulf of Mexico (Mexican side). Natural gas prices and demand also influence activity in these regions.

22/10/2024 Why should retail investors consider McCoy Global?

The opportunity is large, there’s about $1 billion spent annually on labor in casing running. Even capturing a fraction of that market with cost-saving technology represents significant growth potential.

28/03/2025 What is your estimate of the total addressable market (TAM) for McCoy smart products and how fast can you capture market share?

Capturing market share depends on adoption, which is hard to predict. We underestimated adoption of previous tech like FMS. The industry is slow to change, but driven by EMP demands for safety, adoption can be quick. The TAM is large, around $1 billion in labor costs annually for casing running worldwide. If we capture a third of that savings, that’s about $150 million annually.

28/03/2025 What kind of growth do you expect for smart products in 2025 and longer term?

We don’t provide specific guidance. Smart products hardware has grown significantly and is replacing traditional equipment. SaaS growth is expected to contribute more in the future, improving margins and recurring revenue.

31/05/2025 How is the US land market performing for McCoy Global?

US land is our strongest growth market due to safety and efficiency demands. However, rig counts can drop if oil prices fall below $40, which limits growth potential.

31/05/2025 What is the demand like for your equipment in the Middle East?

There is strong demand for unconventional gas development in Saudi Arabia and the UAE, where conventional equipment doesn’t work well for long laterals. Our Smart TR package has been successfully tested in complex well profiles there.

Financials

03/04/2023 What drove McCoy's strong financial performance last year?

The company had a record year driven by growth in their core business and technology adoption.

03/04/2023 Will McCoy return capital to shareholders?

Yes, McCoy is considering share buybacks and plans to introduce a dividend provision at the next AGM to return capital to shareholders.

03/04/2023 Can you describe McCoy’s shareholder base and insider ownership?

Insiders own about 10% of the company. The largest shareholder is Canal Capital from Wyoming with 16.2%, followed by three other major institutional investors including two Canadian firms and Fidelity in the U.S., each holding around 12-13%.

08/08/2024 How is the market in the Middle East and North Africa?

That market remains quite strong with robust quoting activity.

08/08/2024 What’s happening in the deep water offshore market?

After a long downturn, it’s making a comeback. We recently secured a nice contract there.

08/08/2024 Why is revenue growing in the US land market despite rig count declines?

We’re introducing new technologies that customers find valuable, even in a down market, which drives growth.

08/08/2024 How big is the market opportunity for this smart casing running technology?

Globally, about $1 billion is spent annually on labor for casing running, with roughly l$500 million of that in North America alone. The company’s goal is to reduce labor costs by two-thirds, capturing a significant portion of that market through automation and efficiency gains.

08/08/2024 When is the full smart casing running package expected to launch commercially, and how will it be brought to market?

The full package is expected to be commercially available in 2025. The company plans to conduct robust field trials with customers to ensure reliability before launch. Adoption will be driven by demonstrations and trial units given to major customers, encouraging them to experience the benefits firsthand and become early adopters.

08/08/2024 What is the company’s current valuation and outlook?

The company has $10 million in cash, a market capitalization of about $55 million, and $35 million in inventory. The valuation reflects these assets, and the outlook depends on sales performance in 2025 and the overall energy market conditions.

08/02/2024 Why is McCoy Global’s market cap low compared to its performance?

The market is not fully valuing where we are headed with our new technology package. We have a solid business with good margins and cash flow, but the market hasn’t priced in the future growth from our integrated technologies yet.

08/02/2024 How does McCoy Global plan to stay profitable while growing?

We have invested over $20 million since 2018 in technology development. Most of the capital expenditure is behind us. Our operating expenses are low, and we manage cash well, allowing us to grow without heavy new capital needs.

08/02/2024 What is insider ownership like?

Insiders own about 9% of the company. I personally own about a million shares, so I am a significant shareholder.

31/10/2024 Can you explain the current share structure and dividend?

We reintroduced a dividend a few years ago starting at one cent per share, increased to two cents last year, which is about a 3.5% yield now. We also return capital through share buybacks, having bought back 1.6 million shares last year at an average price of $1.46.

31/10/2024 What percentage of revenue do you expect from your SaaS model over time?

We don't know yet and don't forecast it specifically, but we expect it to grow as we roll out packages. Margins on SaaS will be very good.

22/10/2024 What percentage of the company is owned by insiders?

About 5%.

22/10/2024 Is McCoy profitable?

Yes, we have been profitable for some time and were even cash flow positive through COVID.

22/10/2024 How many shares are outstanding, what is your market cap, and what is insider and institutional ownership?

There are about 27.5 million shares outstanding with a market cap of about 73 to 77 million. Insider ownership is about 5%, with the largest insider owning close to a million shares. One of the four institutional shareholders still holds just over 10%, while the others are below that.

22/10/2024 How much debt does McCoy have?

Zero.

22/10/2024 How is margin growth looking for McCoy?

Margins are improving as new technology sales grow. Traditional hydraulic power tongs have lower margins due to competition, but new casing running tools and flush mount spiders have higher margins because of IP and less competition. As new tech grows, overall margins improve.

22/10/2024 Should investors focus on annual results rather than quarterly due to lumpiness?

Yes, because of timing in shipments and contracts, quarterly results can be lumpy. Annual results give a better picture of the business.

22/10/2024 What are your revenue growth expectations for 2024?

We don’t provide guidance but expect a pattern of a slower Q1, strong Q2, lighter Q3, and strong Q4. Our business is lumpy due to timing of shipments and contracts, but growth remains the story.

22/10/2024 Why has McCoy’s stock performed well recently?

It’s a combination of factors, a strong track record of meeting targets, increased investor relations efforts, and repositioning as a technology and products company rather than a traditional energy services company. This has attracted the right investors and improved liquidity.

28/03/2025 How should investors view the gross margin for this type of business?

Software and subscription services have very high margins compared to legacy equipment. As we grow our SaaS and smart products sales, we expect margins to increase substantially, improving our overall margin profile.

28/03/2025 Has Canel Capital finished selling, and are they below 10% ownership?

We don’t know as they don’t share that with us, but yes, they are now below 10% ownership, so they don’t have to file. We don’t have anyone above 10% anymore.

31/05/2025 Will the $11 million order include SaaS revenue?

The $11 million is for equipment delivery by the end of the year. The ongoing revenue from SaaS will come later as that part of the business matures.

31/05/2025 What is the outlook for aftermarket revenue?

It takes a couple of years for equipment to be installed and used, but we expect aftermarket revenue to grow and maintain strong margins, providing a consistent revenue stream.

Outlook & Guidance

03/04/2023 What is your outlook on the oil and gas industry given current global uncertainties?

Despite uncertainties like oil prices, global issues, and banking challenges, demand for hydrocarbons remains strong at over 100 million barrels per day. Maintaining production levels is becoming harder, requiring more drilling and exploration globally, including offshore and deepwater projects.

03/04/2023 How are regional and commodity-specific factors shaping the industry?

Internationally, especially in the Middle East, maintaining production is difficult despite committed capital. Offshore activity is resurging with large backlogs, and China’s reopening after COVID restrictions is driving increased consumption. The U.S. market is influenced by capital discipline and higher interest rates.

03/04/2023 How do interest rates and capital discipline affect energy companies?

Higher interest rates limit capital availability, and energy companies, especially in the U.S., are more disciplined with capital allocation, focusing on returning capital to shareholders rather than over-investing, which is a shift from past cycles.

03/04/2023 How is McCoy positioned to navigate industry cycles and challenges?

McCoy has taken a conservative approach, maintaining a strong balance sheet that allows it to invest in organic growth and strategic acquisitions, positioning the company well to weather industry ups and downs.

08/08/2024 Why was Q1 revenue flat compared to last year?

There’s no need for concern. Our business is lumpy quarter to quarter due to timing of large orders and shipping.

08/08/2024 When is the full smart casing running package expected to launch commercially, and how will it be brought to market?

The full package is expected to be commercially available in 2025. The company plans to conduct robust field trials with customers to ensure reliability before launch. Adoption will be driven by demonstrations and trial units given to major customers, encouraging them to experience the benefits firsthand and become early adopters.

31/01/2024 What are the value catalysts for McCoy Global in 2024?

2024 is a pivotal year. In 2023, we developed new Smart Technologies aimed at changing how casing is run in the oil and gas industry by bringing automation to make it more efficient and safer. These technologies became commercial and were well accepted. In 2024, we plan to integrate these technologies into a true automation package.

31/10/2024 How is McCoy Global transitioning its business model?

We are moving from margin-based pricing to value-based pricing. For example, the price of our FMS tool has increased twice in a year and a half as we better understand the value it delivers. The SaaS model will also follow value pricing.

31/10/2024 When do you expect to complete the three field trials?

We're hoping to complete three full field trials by December 31, 2024. No guarantees, as it depends on rig availability and well profiles.

22/10/2024 What short-term catalysts should investors watch for?

We are near commercialization of a fully integrated smart TR package. Investors should watch for announcements on successful field trials of this integrated technology package.

22/10/2024 What are the top catalysts for the next 6-12 months?

Successful completion of field trials for the smart TR package and moving into the adoption phase with customers.

22/10/2024 Any final thoughts for investors?

Stay tuned. We appreciate the opportunity to share our story and hope investors keep an eye on us as we continue to grow and deliver value.

28/03/2025 Is the demand for your technology driven by the down cycle or will it continue when things get busy?

We started this roadmap in 2018-2019 based on customer feedback about labor shortages and safety. The demand is structural, not just cyclical, because people don’t want to work in harsh rig conditions anymore.

28/03/2025 How much are you tied to the oil and gas cycle, and how will smart products help decouple from it?

We have been decoupling from the cycle, especially with new technologies. For example, in the US land market, drilling activity was down 28%, but our revenues were up. This is driven by cost savings and labor challenges, which are consistent regardless of the cycle.

28/03/2025 Are you anticipating a pickup in drill count this year due to “drill baby drill”?

No, the market is more disciplined now. Oil companies focus on returns and shareholder payouts, so it’s unlikely they will increase drilling just because of slogans.

28/03/2025 What should investors pay most attention to as catalysts?

The progress on the smart TR package is the key catalyst. It’s not priced into the stock today, so watching its commercial success is important.

28/03/2025 What technical issues have slowed adoption of the integral smart product system, and will it commercialize this year?

There are some KPIs not yet met, mostly software bugs, but no showstoppers. We hope to commercialize the full system by the end of Q2, but there’s no guarantee.

28/03/2025 Can you give more details on the subscription package, like duration and fees?

We haven’t finalized the subscription model yet. It could be daily, monthly, or annual. We announced a subscription for an offshore automated tong package last year, but details will evolve as we deploy.

31/05/2025 What is the outlook for aftermarket revenue?

It takes a couple of years for equipment to be installed and used, but we expect aftermarket revenue to grow and maintain strong margins, providing a consistent revenue stream.

31/05/2025 How is the US land market performing for McCoy Global?

US land is our strongest growth market due to safety and efficiency demands. However, rig counts can drop if oil prices fall below $40, which limits growth potential.

31/05/2025 What is the demand like for your equipment in the Middle East?

There is strong demand for unconventional gas development in Saudi Arabia and the UAE, where conventional equipment doesn’t work well for long laterals. Our Smart TR package has been successfully tested in complex well profiles there.

Risks and Macro

03/04/2023 What is your outlook on the oil and gas industry given current global uncertainties?

Despite uncertainties like oil prices, global issues, and banking challenges, demand for hydrocarbons remains strong at over 100 million barrels per day. Maintaining production levels is becoming harder, requiring more drilling and exploration globally, including offshore and deepwater projects.

03/04/2023 How are regional and commodity-specific factors shaping the industry?

Internationally, especially in the Middle East, maintaining production is difficult despite committed capital. Offshore activity is resurging with large backlogs, and China’s reopening after COVID restrictions is driving increased consumption. The U.S. market is influenced by capital discipline and higher interest rates.

03/04/2023 How do interest rates and capital discipline affect energy companies?

Higher interest rates limit capital availability, and energy companies, especially in the U.S., are more disciplined with capital allocation, focusing on returning capital to shareholders rather than over-investing, which is a shift from past cycles.

08/08/2024 How is the market in the Middle East and North Africa?

That market remains quite strong with robust quoting activity.

08/08/2024 What’s happening in the deep water offshore market?

After a long downturn, it’s making a comeback. We recently secured a nice contract there.

08/02/2024 What are the main risks for McCoy Global besides execution?

The biggest risks are market-driven, like oil price drops that reduce activity. We rely on hydrocarbon consumption, which we believe will grow over the next 10-20 years, but price volatility is a risk.

31/10/2024 What are the biggest risks to executing your game plan?

Risks include unpredictable events like COVID-19 and geopolitical issues in the Middle East, which is a key market. However, we are confident in the ongoing demand for hydrocarbons over the next 10-15 years and in the proven technology of our products.

22/10/2024 What are the biggest risks McCoy faces and how are they mitigated?

Conflict in the Middle East is a risk since it’s an important market. If conflict escalates, it could disrupt business there, but global operations help mitigate this by shifting focus to other active markets.

28/03/2025 Is there a requirement for automated technology in the Middle East and what about competition?

No requirement for automation yet, but hydraulic CRTs are required to replace mechanical ones. Safety is increasingly important, and penalties for injuries are severe. We see a strong market for our automated tech in the Middle East.

31/05/2025 How is the US land market performing for McCoy Global?

US land is our strongest growth market due to safety and efficiency demands. However, rig counts can drop if oil prices fall below $40, which limits growth potential.

31/05/2025 Where are your technologies produced?

We produce all our technologies in the US, with some Canadian components assembled in the US. These components are protected under the Mexico-US trade agreement, so we don’t expect material tariff impacts.

Personal Questions

03/04/2023 What is the history and origin of McCoy?

McCoy was founded in 1914 by Henry McCoy as a blacksmith shop in Edmonton, Alberta. The company evolved through three generations, focusing on oil patch-related products, was sold in 1995 to a private equity group, and went public in 1996.

03/04/2023 What is McCoy’s exit strategy or long-term vision?

There is no fixed plan to sell the company, but McCoy remains open to acquisition opportunities. The focus is on running the best company possible to maximize shareholder value, regardless of external M&A activity.

31/01/2024 What is your background and role at McCoy Global?

I joined the company in 1996 with a background in operations and running businesses. I was brought in to turn around a couple of the businesses.

31/01/2024 Did you have experience in oil and gas before joining McCoy Global?

Yes, but not in this specific part of oil and gas. My prior experience was more on the transportation side. I learned the specifics by spending time with customers and in the field.

22/10/2024 Can you tell us about your background?

I am Canadian, born and raised in Alberta. I started my career in trucking management before moving to McCoy in the mid-90s to help turn around a business unit. I became CEO in 2002 and have been involved in growing the hydraulic power tong casing running business.

22/10/2024 How has McCoy changed over its long history?

McCoy has been around for about 110 years. The business has evolved significantly, focusing now on technology and service solutions for the energy sector globally.

28/03/2025 Do you see McCoy as a potential takeover target?

As we succeed with new technology, the target on our back grows. But bigger companies often fail to get more out of acquisitions. We focus on running the business day to day and will deal with that if it happens.

Other Questions 

03/04/2023 What is the size of the global tubular running service market?

The global tubular running service market is estimated to be around two and a half to three billion dollars a year, including both offshore and land services.

03/04/2023 What is McCoy's immediate addressable market size?

If McCoy captured 100% of the market for buck units, tongs, CRTs, and related technologies, the immediate addressable market would be well over half a billion dollars.

03/04/2023 What key performance indicators should investors monitor to assess McCoy’s progress?

Investors should focus on backlog growth and sustainability as a key indicator of future revenue, along with updates on the technology roadmap and achievement of development milestones.

31/01/2024 Where can investors find more information about McCoy Global?

They can visit www.mccoyglobal.com.

08/02/2024 What are some common investor questions or confusions?

We are working to get more exposure through microcap investor events and board members to tell our story better. Awareness is growing, and our stock has performed well recently.

08/02/2024 What one line best describes McCoy Global?

We're a provider of solutions for our customers with technologies in the oil and gas industry.

08/02/2024 When was McCoy Global founded and how has it evolved?

The company was founded in 1914 in Neon, Alberta by Henry McCoy, starting as a blacksmith shop. It grew with the industry, moving into spring manufacturing for vehicles, suspension repairs, and trailer manufacturing. Oil and gas was foundational to the business. The company stayed in the family for three generations, was sold to private equity in 1995, went public in 1996, and I joined to help turn around a business unit. Since 2002, as CEO, we focused fully on tubular makeup technologies for casing running in wells worldwide, aiming to make the job easy, safe, efficient, and environmentally friendly.

Sources

McCoy Global Inc (TSX: MCB) Update with CEO Jim Rakievich

McCoy Global Inc (TSX: MCB) Interview with CEO Jim Rakievich

McCoy Global: Profitable Microcap Transforming Oilfield Tech Globally with Automation

McCoy Global Inc. (TSX: MCB) | Planet MicroCap Showcase: VEGAS 2024

McCoy Global (TSX: MCB): Technology and Solutions Provider for Oil and Gas

McCoy Global Inc. (TSX: MCB) Webcast | Planet MicroCap Showcase: VEGAS 2025

McCoy Global Inc. (TSX: MCB) Webcast | Planet MicroCap Showcase: VANCOUVER 2024

McCoy Global Describes Services to Support the Global Energy Industry + 2024 Value Catalysts

New Interview | McCoy Global

Disclaimer:

The following transcript and Q&A have been generated with the assistance of Artificial Intelligence (AI). While we strive for accuracy, completeness, and clarity, the content may contain errors, inaccuracies, or misinterpretations. Neither the company featured in this document nor ValueBridge assumes any responsibility or liability for the accuracy, reliability, or completeness of the information presented.

This material is for informational purposes only and should not be construed as official company communication, financial advice, or a definitive representation of the company's views. Readers should independently verify any information before making decisions based on it.