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Gold/Mining/Energy : Shale Natural Gas, Oil and NGLs and ESA -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (18)	8/24/2008 1:20:33 PM
From: jrhana	Respond to of 6160

Thanks Glenn and welcome to the thread. Nice pick up-I hadn't noticed that tidbit: <At March 31, 2008, ST Pipeline had a backlog of $14.3 million. Between April 1, 2008 and May 6, 2008, ST Pipeline entered into additional contracts with estimate revenues of approximately $18.5 million.> From what I understand, Mr. James Shafer has his own sales philosophy. He likes to let the customer come to him. That way he feels he can negotiate a more favorable contract. This may lead to some fluctuations in the order backlog figures, but I am sure they will never suffer from a lack of work. He founded ST Pipeline in 1984 so they now have 24 years experience and a well deserved reputation for quality and reliability (as does C.J. Hughes). I am sure the purchase prices reflect the relative importance for ESA of ST Pipeline and C.J. Hughes 19.2 million for ST Pipeline (with 3 million deferred and assumption of 0.5 million of debt) 34 million for C.J. Hughes (half in stock with the assumption of 14.8 million in debt). As I have mentioned, there should be synergies between the two pipeline companies. In addition to substantial insurance savings, heavy equipment will be shared. When one company has a large piece of heavy machinery idle, the other company can simply borrow it instead of leaving it idle. Incidentally, it looks to me like the new company will have about 15.3 million of debt. Not bad when you consider estimated revenues for 2008 are about 170 million.

To: Glenn Petersen who wrote (18)	8/25/2008 7:05:49 PM
From: jrhana	Read Replies (2) \| Respond to of 6160

It was pointed out to me today that one of the major reasons ST Pipeline was included in the deal was that they specialize in laying pipeline in extremely rough and dificult terrain. So they tend to get jobs in places nobody else can or will go. Their backlog may fluctuate but they always have plenty of work. They are very well paid for this specialized niche of theirs. I imagine that working on the Alaska Pipeline vetted <g> them well for this kind of work.