Thursday April 27, 2006
By Jim Nelson, President and COO of Jackson Rivers
I would like to take the opportunity with this letter to accomplish two things. First I want to introduce myself to the shareholders and share with everyone a small bit of my background and experience. Secondly, I will explain more of the details of our plans and strategy for expanding our business opportunities in Western Africa, beginning with our efforts in Nigeria.
I am a native Houstonian and surprisingly, there really aren't too many of us even in the 4th largest city in America, a city with a metropolitan area population in excess of 5,000,000. I was born in downtown Houston but grew up and attended high school in a small town just north of the city. In 1963, I graduated from Texas A&M with a BSEE degree and a commission in the United States Army as a 2nd Lieutenant in the Signal Corp. I served two years on active duty and in September 1965 was discharged from active duty and returned to Houston to start a job as a Junior Pipeline Engineer at what was then named Humble Pipeline Company.
I worked at Humble, then after the name change, Exxon for approximately 10 years, in a wide variety of both departments and positions. When I resigned in 1975 I was a Senior Project Manager at what was at the time an Exxon subsidiary, Plantation Pipeline Company, in Atlanta, Georgia. At Plantation I was the Project Manager of a large project with a goal to modernize and automate the entire pipeline. I left Exxon to form what was the first of numerous small, private companies that I have established. Most of these companies were primarily focused on providing engineering services to the pipeline and production departments of both large and small oil and gas producing and transportation companies.
I consider myself extremely fortunate in that I have been able to work on some of the largest pipeline projects in the world. For a year I lived in Alaska and helped organize and initially staff the Operational Engineering Department for Aleyska Pipeline, then I helped start up the entire Trans-Alaska pipeline. I was the Project Manager for all SCADA, local control systems, advanced applications, and telecommunications for the nation's first deep water port, the Louisiana Offshore Oil Port (LOOP).
In the early 1990's I joined the only public company I have worked at since Exxon when I joined a company based in Los Gatos, California, named Metricom. I was the Vice President of Operations and Network Engineering. In that capacity I was responsible for building what at the time was the nation's first high speed (128 Kbps) wide area terrestrial packet switched network called Ricochet. While at Metricom my team deployed over 50,000 radios, designed and deployed a 7x24 Network Operations Center in Houston, and built a custom Network Management Center that was capable of managing networks with in excess of 250,000 network elements. I truly was blessed with being able to assemble a fantastic group of young engineers and systems analysts that really did all the work.
In 1998, five previous Metricom employees, including myself, formed Diverse Networks, Inc. in Houston and we commenced our quest to become a major contributor to the development and operational management of large scale wireless networks. We were fortunate to have the opportunity to work with several early pioneers such as Palm and OmniSky during their early attempts to establish wireless data connectivity to Personal Digital Assistants (PDAs). During the first 6 years, Diverse also invested substantial amounts of our earnings into the development of a scalable platform dedicated to the collection and distribution of all sorts of industrial data using virtual wireless networks built by other wireless carriers such as Sprint, Verizon, Orbcomm, etc. That work was essentially completed and demonstrated with numerous pilot projects by the end of 2004. The actual service, however, was never officially launched due to our inability to secure the proper level of funding to sustain the business until it reached a point of profitability. This platform exists today and forms the basis of our Machine to Machine (M2M) offering.
In December of 2005 we completed a reverse merger with The Jackson Rivers Company (JKRI) to create a new JKRI that was totally focused on the emerging M2M market space. Today I serve as Chairman, President, and Chief Operation officer of JKRI.
Even before the merger with JKRI, I had decided to embark on a strategy of expanding our client base by entering the international market. Although we had provided various technology services in Trinidad, Mexico, and China, I felt we could offer a wide range of technology focused services to oil and gas companies that operated in certain less developed countries around the world. I was convinced that the pricing of oil and gas would continue to rise, thereby spurring additional exploration and production activities in certain known oil and gas producing regions. For a number of reasons, I chose to commence the business development work in the general region of Western Africa and in Nigeria specifically.
To date, I have made four trips to Nigeria, doing various levels of business development activities on each trip. I have been fortunate to have had the opportunity to meet and form a business relationship with Mr. Obie Mbakwe of MPA Services, Ltd. Obie lives in Dallas and owns companies both in the United States and Nigeria. He came to the U.S. just out of high school in Nigeria and has obtained degrees from the University of Oklahoma and West Texas A&M University. More importantly, he is a highly ethical and experienced business man that grew up and knows a vast number of people that are in influential positions within the oil and gas companies that operate in Nigeria. This merely serves as an introduction to the decision makers of that country. Since he currently operates a company in Nigeria, he is also very familiar with the rules and regulations associated with the operating in the country.
Together the MPA and Diverse Networks team has made great strides in establishing business relationships in Nigeria. We have recently added a company named UTSI International to the team and have assembled a formidable group of expert consultants for offering advice and consulting services in the area of SCADA applications, pipeline local control, data communications, electronic flow measurement, as well as advanced applications for both gas and liquid pipelines.
This expert team has been extremely well received in Nigeria and we are currently pursing a wide range of business opportunities within the country. While we are cautiously optimistic about several of these opportunities, at this time we are not in a position to formally announce any new contracts. Hopefully when all details have been settled, we might be able to make such announcements in the not too distant future.
The opportunities for this team are tremendous in Nigeria. Nigeria has a large level of proven reserves of both oil and gas. The near record prices for energy today have resulted in a flurry of new activity in the country. This fact, coupled with the Nigerian federal governments announced programs for increased oil and gas exploration and production have severely stretched the small amount of support infrastructure that exists in Nigeria today. Many of our opportunities are in the form of helping Nigeria build critical infrastructure for use within the oil and gas industry.
In addition to Nigeria's interest in increasing both production and proven reserves, they are very serious about the development of a highly skilled pool of technical human resource within the country. Our team has recognized and agrees with this philosophy and has proposed numerous projects aimed at building highly scalable critical infrastructure for use within the oil and gas industry, while at the same time using and training Nigerian engineers and analysts in the methodology of building and maintaining such infrastructure.
Just prior to my first trip to Nigeria I will admit to a certain level of apprehension concerning the visit. I feel that in general, people in America perceive Nigeria as a highly dangerous place to visit. After my 4 trips, I now realize what I should have known at the beginning. Nigeria is not a great deal different than any where else I have ever been. There are of course the natural differences in cultures, customs, and food but the people basically fall into one of three groups of being good, bad or ugly just like anywhere else in the world. I have found that for the most part Nigerians are warm and friendly people. They laugh easily and seem to have a knack for enjoying life perhaps a bit more than the people in other more "well developed" countries I have visited. I have been blessed with the privilege of being able to make quite a number of new friends during my visits and have had the opportunity to host many of them in my home here in Houston, just as they have hosted me in theirs in Nigeria.
There are no doubts in my mind that our team will be successful in our endeavor to establish business within Nigeria. I have no way of knowing if that will be on any of the projects we are currently pursuing or on the next series of projects we will propose. I also feel quite strongly that once we are successful in demonstrating our ability to perform, we will experience a rapid growth in both the size and number of projects. I am eagerly looking forward to the establishment of a Jackson Rivers/Diverse Networks office in Lagos or Abuja. I sincerely hope that time will come in the very near future.
Sincerely,
James E. Nelson
President and Chief Operation Officer
Jackson Rivers
