STW Resources Holding Corp has announced it will expand services and the scope of new construction in its wholly owned subsidiary, STW Pipeline Maintenance and Construction, in 2015. Pipeline’s focus is on growth and profitability by increasing/diversifying its customer base and closely managing operating expenses.
Throughout 2014 the company achieved several major milestones: over 100 employees, fully staffed experienced management team, highest safety rating, accepted larger new pipeline contracts, entered into long-term maintenance contracts and produced over US$15 million the first 12 months. In the fourth quarter of 2014, the company significantly reduced overhead to achieve positive net cash flow and profitability.
In 2015, the maintenance division of STW Pipeline plans to add an additional 6 - 8 crews in the Permian Basin. Recent decline in oil prices has caused upstream production in the oil and gas industry to slow down while demand for midstream maintenance increased mainly because the ageing pipeline infrastructure is being pushed to the limit. Also, pipeline replacements of old lines require attention to keep them in service so that the gas can get to market.
In 2015, the new construction division of STW Pipeline plans to increase the size and scope of the business by bidding on larger new pipeline construction projects. Pipeline will add more crews and equipment to increase the number of new pipeline projects that it can build simultaneously. Additionally, it has signed the alliance contract with Regency Energy Partners for the whole year; this contract alone should provide Pipeline with several million in revenues for 2015.
New pipeline installation in 2015 is aggressive because of the needed infrastructure that is not in place to move all of the new oil and gas from the wells that have been drilled in the Permian Basin these past few years. Capital has already been budgeted for these projects that will start immediately which affords STW Pipeline the revenue base to add additional crews to the new pipeline construction division. The natural gas industry can be unaffected by the price of oil as we are seeing in the field today. The effect is that it gives the gas companies time to catch up; they have access to more crews and can build the pipelines they haven’t been able to since the oil boom started.
STW Pipeline President Adam Jennings stated, “Our safety record after a year in business is impeccable. This is due to our experienced field supervisors and their crews that practice safety every single day.” Jennings went on to say, “I really have a great feeling about 2015, the work is here in the Permian Basin; we have the management and equipment in place to double our workforce this year to become an even larger competitor in the pipeline maintenance and construction industry.”
Adapted from press release by Hannah Priestley-Eaton