Natl Gas Well Maint w Proprietary Equip, Design, & Mfg. 2.5M Assets

Garfield County, CO

Seller Financing Available
Natl Gas Well Maint w Proprietary Equip, Design, & Mfg. 2.5M Assets

Asking Price:$2,500,000

Cash Flow:$579,007

Gross Revenue:$2,500,974

EBITDA:$579,007

FF&E:$2,500,000

Inventory:N/A

Rate/Sq. Ft.:N/A

Established:2005

Natl Gas Well Maint w Proprietary Equip, Design, & Mfg. 2.5M Assets

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Business Description

Natl Gas Well Maint w Proprietary Equip, Design & Mfg. 2.5M Asset

The purchase price for this company has been lowered to 2.5MM for 100% of the Company. He will consider all offers with at least a 1.4MM down payment or less with the assumption of some of the debt. This will also now include the just completed newest generation Emission Free Gas Unit that cost them $900K to build. The lower sales price for the business is below the current value of their equipment that comes with the sale. The buyer will be getting their 3 newest units and a foam unit plus other equipment, tools, and FF & E. The owner will stay post-closing if the new owner would like him to and do whatever the new owner would like him to.

They had dropped down to having only one unit in service as of December of 2015 which put them just about break-even but they now have three units working again and the revenues are recovering. They feel this last 12 months was rock bottom and they are growing again and profitable partially because of a reduction in overhead. The owner is very confident in the future of their equipment and cash flow.
Western CO 10 Year Old Specialty Natural Gas Well Maintenance Master Service Provider and Proprietary Custom Equipment Design and Manufacturing Co.

The owner designs and manufactures an environmentally friendly emission free system for natural gas well maintenance. He will consider staying on for a buyer that will fund his ability to increase the manufacturing of his equipment to grow their operations. He is tiring of traveling and being in the field. He is willing to work another 1 to 4 years to grow the business. They currently dominate their market and have developed valuable relationships with nationwide natural gas companies.

2015 had revenues of 3.1M with adjusted earnings of 799,007. They are a low cost provider and survived the previous downturn and are doing it again. This will leave them in a stronger position on the other side as the smaller companies do not.

The owner designs and manufactures the companies well maintenance equipment. Please watch the video interview and walk through in the link above to fully appreciate this. He has designed and built a pollution free, “closed loop system”, natural gas well cleaning system which is compliant with current and future federal regulations. His system is unique and he believes it is the best design in the industry. He has continued to improve the design. His newest design is pollution free of emissions and also leaves the residual fluids “dead” which means that they will not have any pollutants left either. He believes that this would be the first totally pollution free system to maintain natural gas wells. The changes in the industry are inevitable. More and more companies including all of the biggest ones will eventually be using a pollution free system just because it exists and the political environment, major oil companies, and public opinion will compel it. Plus, it is a not much more expensive than the currently popular nitrogen based systems that are not pollution free. He is looking for a buyer that will buy 100% of the company and allow him to continue working designing, building, and training people on his equipment.

Gas wells need to be maintained regardless of the price of natural gas. This business made money during the last downturn in natural gas prices and is starting to pick up again after hanging in there during this one also. They have 3 units working for Terra Energy which bought Encana South and Rocky Mountain WPX which used to be Williams. This is the most active and largest natural gas company in Western Colorado. He also believes he is the only active natural gas maintenance company still active in Western Colorado. The company has many long-standing customers with big names that they have master service contracts with resulting in a high percentage of recurring business.

The seller is confident that a new owner can grow this business because of their unique equipment, reputation among big natural gas companies that operate all over the country already, and the anticipated long term demand for their specialized equipment and services. This could be the best time to buy this business ever because the owner will sell it for below the current value of the assets.

Location: Western Colorado

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The sales price has been lowered to $1.4M down payment as part of a $2.5M total sales price. Also, they just spent almost $900K for their most recent emission free gas unit which has not been used yet and is now included in the sales price. It is priced at below the current value of assets which is mostly large equipment. 100% of the sales price will be covered by current value assets included in sale. This should be a stock sale because of their master service contracts, safety and drug programs, and insurance policy. The owner will leave enough cash to cover all of the long term liabilities on the books zeroing it out. He will leave any residual cash and net collectable AR in a neutral amount vs. the AP while indemnifying the collection of the AR that he leaves.

The confidentiality agreement( NDA) link is: http://companybroker.com/buyer-profile-jeff.htm which will get you the full sales package and name and location of the company. If it is blue you should be able to click on it, if not please cut and paste that to a URL line and it will give you the NDA. Please request the full sales package containing a detailed Data Room with financials and a Comprehensive Video on the entire operation and a full interview with the owner by clicking on the secure web link to the Confidentiality Agreement (CA). If you have any questions or comments on the CA please email me at jce@companybroker.com or call me at 303-905-7607. Thank you.
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Brief Overview and Deal Points:

This company designs, manufactures, and operates equipment that cleans out natural gas wells which is a necessary part of a wells regular maintenance. The company has value as both a manufacturer and as a service provider. Oil and Gas production dropped substantially in the late 2000’s and never recovered in their area therefore the current drop in natural gas and oil prices has hurt them but they will survive and recover just as they did before. The natural gas reserves are large enough in their area to grow this company substantially if prices start to recover. See attached article.

The buyer will also step into a solid pipeline of recurring revenue because of their operating model, location, and the importance and value of their services to natural gas companies. The seller is very positive about the long-term projections of the business and will consider keeping some ownership because of this.

The company is 10 years old and have the biggest name and best reputation in the region for cleaning out wells. The company is a C Corp and they would prefer a Stock Sale. A Stock sale makes sense based on the long term Master Service agreements that they have in place with most of the big name oil and gas companies in their area. The seller will agree to full reps(indemnifications) and warrantees and further guarantee a solid legal and business standing. In fact, the seller will offer a full “right to off-set” against the sales price for any liabilities that originated before the closing. They also have a great record for safety (OSHA) and no legal battles.

The business was started from scratch by the current owner who leases the land which has a great location and custom building. He will sign a non-compete if the new owner does not want to hire him to continue his design and manufacturing of his proprietary equipment. He will offer a full time transition and stay on part time if the new owner wants him to. He says a buyer does not need any special skills because he can teach him/her what they will need to know to run and grow the business.

He started in 2005 using the standard equipment and techniques available at the time to clean wells. In 2007/2008, he switched to a Nitrogen Production Units which pull the nitrogen from the air removing O2 to get a 95% to 97% nitrogen stream. By 2010, he had designed and built a “closed loop system” that uses the wells own natural gas to clean itself after by removing water and solids then reinjection of the gas for underbalance circulation. He has built equipment that can operate up to 5000 PSI and completely pollution free. His company uses the newest, safest, and best maintained equipment along with employees whom have been trained specifically on his equipment. Their customers need reliable equipment and service which is why they have long term agreements with many of them. The equipment and employees are both reliable and have never had an onsite accident or caused any problems or claims for their customers.

In his own words: “We began recirculating gas as far back as 2007. The original design was to eliminate air or nitrogen to the well bore and eliminate the smell associated with the flow back to open tanks that was required using air or nitrogen. We started by using flowback company equipment along with our foam units and it worked but was somewhat inconvenient for the customers. We decided to mount all the necessary equipment on trailers for ease of rig up and transport, once this was done it became an easier sell and has no emissions and all gas was resold or used (no waste to atmosphere). The EPA became a little more involved in 2012 as to climate change and greenhouse gasses, especially methane because it has 25 times greater warming potential as CO2. In 2015 these regulations were amended with the goal of reducing emissions by up to 45% in the next decade compared to 2012 emissions. websites: go.usa.gov/zUZH ....methane epa.gov/airquality/oilandgas ........liquid unloading. This covers our industry best although these regulations have not been fully implemented but in time it will need to be versus fines. There is no doubt that the EPA will eventually require the use of emission free technology because it now exists and is very close in price to the more traditional nitrogen units that pollute. We also believe that both the end users and providers will require the producers to use this equipment so they will be more “green”. We believe we have the most advanced emission free equipment in existence and have plans for the next generation to have pollution free waste also(water and sand mostly).” The owner also has designs on how to not only have the well pollution free but also the residual liquid. This would be the first truly completely pollution free system that he knows of. He would like to find the financial backing he needs to pursue this and believes that it would be very profitable for both parties. He is confident that he can stay ahead of the industry and can build these units and train the people necessary to operate them in a very profitable way for whoever wants to partner with him.

They have 2 Main Current and Future Profit Sources:
1) Well Cleaning Service – This is their main business. They have master service agreements and repeat business from most of the companies in their area. The companies have been very happy with their service and reliability. With more equipment and other locations, he can train employees to help grow this part of the business.
2) Design and Manufacturing – The owner would like to sell to a company, group, or person that may allow him to continue to design and manufacturer well cleaning equipment. He believes he can further improve his current design and that it has a lot of demand based it being an emission free operation.

They have 4 employees whom are all trustworthy, experienced, loyal, and will stay after the transition. The new owner could add an outside sales person to increase the growth rate.

He has competition but believes he is ahead of the curve both in design but also in future design and believes he will build the first completely pollution free in both air and fluid system with a new owners financial backing. They dominate their market and he is confident that they will have the ability to be dominant in any market that they expand into.

This company is located in a beautiful and very moderate weather part of the Colorado with over 300 days of sunshine per year. This area is obviously growing with a brand new hospital, high school, hotels, theater, shopping, etc.

They recycle oil which is either from their equipment or from a service they offer that allows customers to drop it off for free. They use this oil to heat our building in the winter which saves them a lot of money. This also positions the company as being GREEN. Their location has 6000 Square feet of very functional space on 5 acres of property. The business is located along the busiest industrial road in town with tremendous exposure meaning free advertising. The building is custom designed for working on equipment and trucks as you can see from the video walk through of the business in the link provided above. This is a very functional shop and location with room to increase manufacturing and accommodate a larger business as it grows. The real estate described here has a lease that was just negotiated for another 3 years.

Growth and Expansion: The new owner can hire an outside sales person, manufacture more equipment and train more people to manage the anticipated increase in demand as natural gas prices recover over time, and/or fund the design and manufacturing to sell or use the equipment.

The seller’s willingness to consider staying on for the right buyer confirms his confidence in the short and long term performance of the business and the large potential his designs and manufacturing. This company designs, manufactures, and operates equipment that cleans out natural gas wells which is a necessary part of a wells regular maintenance. The company has value as both a manufacturer and as a service provider. Oil and Gas production dropped substantially in the late 2000’s and never recovered in their area therefore the current drop in natural gas and oil prices has hurt them but they will survive and recover just as they did before. Attached is a recent article that basically states there is enough natural gas in their area to allow them to grow substantially if natural gas prices recover some.

The buyer will also step into a solid pipeline of recurring revenue because of their operating model, location, and the importance and value of their services to natural gas companies. The seller is very positive about the long-term projections of the business and will consider keeping some ownership because of this.

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If you are NOT interested in this business for sale, but you refer someone to us who buys it and we collect the full commission, we will immediately pay you a referral fee of $5,000. Please send us anyone (or email this to anyone) who you think would be interested in this offering. Thank you.
Please Call of Email for Information: The broker is available at any time to discuss your interest in this offering.

Sincerely,

Jeff Chapman Eisnaugle
Company Broker Group, LLC.
999 18th St Ste 3000
Denver, CO 80216
303-905-7607 Direct
303-284-7025 Main
720-524-6482 Fax
jce@companybroker.com

This is prepared by Company Broker Group with information provided by the Seller. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections.

Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage.

Brokerage disclosure to Buyer or Tenant of Property. Definition of working relationships.

Seller's Agent: a seller's agent works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty, and fidelity. The agent negotiates on behalf of and ask as an advocate for the seller. The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the business/property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent: a buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of an accident advocate for the buyer. The buyer’s agent must disclose to all potential sellers all adverse material facts actually known by the buyer’s agent, including the buyer’s financial ability to perform the terms of the transaction. A separate written by a Buyer agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction broker: the transaction broker assist the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting parties with any contracts, including the closing of the transaction, without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care and the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction – broker concerning the property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required.

Company Broker Group, LLC, and Jeff Chapman Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Detailed Information

Inventory:
Included in asking price
Real Estate:
Leased
Building Sq. Ft.:
N/A
Lease Expiration:
N/A
Employees:
4
Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Facilities:
The confidentiality agreement( NDA) link is: http://companybroker.com/buyer-profile-jeff.htm which will get you the full sales package and name and location of the company. If it is blue you should be able to click on it, if not please cut and paste that to a URL line and it will give you the NDA. Please request the full sales package containing a detailed Data Room with financials and a Comprehensive Video on the entire operation and a full interview with the owner by clicking on the secure web link to the Confidentiality Agreement (CA). If you have any questions or comments on the CA please email me at jce@companybroker.com or call me at 303-905-7607. Thank you. This company is located in a beautiful and very moderate weather part of the Colorado with over 300 days of sunshine per year. This area is obviously growing with a brand new hospital, high school, hotels, theater, shopping, etc. They recycle oil which is either from their equipment or from a service they offer that allows customers to drop it off for free. They use this oil to heat our building in the winter which saves them a lot of money. This also positions the company as being GREEN. Their location has 6000 Square feet of very functional space on 5 acres of property. The building is custom designed for working on equipment and trucks as you can see from the video walk through of the business in the link provided in the data room provided after the non-disclosure is submitted. This is a very functional shop and location with room to increase manufacturing and accommodate a larger business as it grows. The real estate described here has a lease that was just negotiated for another 3 years.
Competition:
The owner is selling to be able to focus his time on the designing and manufacturing of his proprietary natural gas well maintenance equipment. Please watch the video interview and walk-through that is part of the sales package that you will receive after completing the non-disclosure link above to fully appreciate this potential. He has designed and built a pollution free, “closed system”, natural gas well cleaning system which is compliant with current and future federal regulations. This system is proprietary and is not being used yet through most of the country. He believes that he can continue to refine the design and help to set up a manufacturing facility that would have good profit margins even with natural gas prices down. Wells need to be maintained regardless of the price of natural gas.
Growth & Expansion:
Growth and Expansion: The new owner can hire an outside sales person, manufacture more equipment and train more people to manage the anticipated increase in demand as natural gas prices recover over time, and/or fund the design and manufacturing to sell or use the equipment. This company did $5M plus in revenue 3 years ago and will again when natural gas starts recovering. This is the best time ever to buy this company.
Financing:
40%
Support & Training:
They have 4 employees that are capable of running the business on their own and are all trustworthy, experienced, loyal, and he believes they will all stay after the transition. The new owner could add an outside sales person to increase the growth rate.
Reason for Selling:
To focus on Design and Mfg with new owner.

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