This company is so iconic and so dominant in its segment of the oil and gas services business in the Uintah Basin that we can only describe it in the vaguest terms so as to not give away the farm.
But the company is in the frac sand business, which is a good business to be in. Three factors are driving up the usage (and price) of frac sand: drillers are using more frac sand per well to open bigger seams in the shale, the horizontal distance drillers are branching from the wellhead is getting greater, and new wells are being opened.
As a result, business is good at this venerable company. Proforma sales for 2017, based on first quarter results for the two operating units are projected to total $12,035,604 with cost of goods sold projected for the year at $5,204,753. The net income is a very respectable $4,156,239.
The listing price is $16 million.
Five reasons to buy this company now:
o The replacement cost for the firm’s combined plant is an
estimated $20 million
o The company is efficient, earning $240,712 per employee. By
contrast, the revenue per employee at Walmart is $220,000. At
Starbucks it’s $84,000 per employee
o Frac sand usage per hole has doubled over the last few years
o Provable oil & gas reserves doubled from 2008 to 2016, thanks to
o The company is unusually adept at utilizing technology