Doing the math,
"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."
Each crew over a year will add about 100k in profit.
They did around 18 mil in revenue last year, and I think they started the year in the 15 to 19 crew range. My guess be eoy they will be running in the 30 plus crew range. That should bring in around 3 million profit in the low margin area.
Then you have the higher profit margin area, it sounds like they have business in this area and are bidding for more
" 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."
IMO the gas oil pipeline business will have revs near 35-40 million area and be cash flow positive in the 6 million area.
I will be asking at the CC about this higher margin business.
Are these new contracts or just additional services?
Another Q, what is up with Fort Stockton, they have the leases so it is just a matter of time. imo
I would also be interested to hear what are the projections for water revs, if they start signing some deals the 40 million might be a little low. What ever they make on water will be high margin.
We shall see.
