STW Resources Initiates Growth Plan in STW Pipeline in Q3
STW Resources Holding Corp, (STWS), an integrated provider of water management, including water reclamation and remediation, and oilfield pipeline maintenance and new construction services, announced today that its wholly-owned subsidiary, STW Pipeline, has expanded its business in the Permian Basin. The company’s objective in the first half of 2015 was to achieve net cash flow and increase their customer base. In March of this year the Pipeline Company crossed over to operating with net cash flow and has maintained this position on a monthly basis since. Customer diversification has increased several times by adding customers such as Plains and Anadarko. The end of May this year the company was operating 10 crews profitably.
Having achieved our goals by June we set out to initiate our growth plan for the second half of 2015. We increased our business by adding additional crews and plan to add an additional 8 crews by the end of the 3rd quarter. These crews provide a steady base of contracted work as well as time and materials billing for maintenance and repair of oil and gas pipelines. Each crew will generate approximately $1.1 million in revenues annually at a net margin of 11 to 12 percent.
STW Pipeline will continue the growth by implementing this more conservative strategy. Additionally the company is increasing their business and margins through new construction of larger pipelines that afford a net margin between 19 to 20 percent. STW is actively in the bidding process with several customers for this type of work.
In the third quarter STW Pipeline began providing additional environmental services for their customer base. This is a line of business that is in high demand with great margins. The company did not have significant capital expenditures to launch these services. We’re excited to add these services to our company and look forward to providing an update next quarter.
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