Dear shareholder-owners,

It was my honor to present my first CEO report to the June 4 Annual Shareholder-Owners Meeting, and I am pleased to report that my update was as bright as the sun outside.

Ahtna had a very good 2015, ending the year with a net income of $5.4 million, the second-highest in our history. Not only did our companies perform well, we were able to significantly increase the work we do in Alaska, which creates more job opportunities for our shareholder-owners.

In fact, Ahtna Inc. made good progress on all three of the Board’s priorities for success: shareholder-owners, profits and safety.

Shareholder-owner benefits totaled $14 million and break down as follows:

Our Alaska revenues grew by 40 percent from 2014 to 2015. We staffed projects in 47 Alaska locations that ranged from Ketchikan to Prudhoe Bay, Northway to Atka.

Alaska accounted for $44.36 million in revenues, or 24 percent of total revenues, followed by Texas at $42.45 million, California at $38.95 million, Arizona at $15.79 million and South Carolina at $8.61 million.

The growth in our business in Alaska has created new, good-paying jobs for our shareholder-owners. Some 38.6 percent of Ahtna employees who work for Alyeska Pipeline Service Co. on the trans-Alaska pipeline are Alaska Natives, the highest percentage by far for all contractors. We reached the 50 percent threshold for hiring shareholder-owners on some of our field and remote job sites. These workers all earn Davis Bacon wages. Shareholder-owner Michael Routt has been hired as the pit manager for one of our new ventures, AAA Valley Gravel.

Another large undertaking that could benefit shareholder-owners for decades to come is the exploration gas well we are drilling 11 miles west of Glennallen. Getting a rig moved from Cook Inlet to the site of Tolsona No. 1 proved more complicated than expected – we will keep you updated on the progress of this project.

This well has already brought dollars into the region through the seismic and construction work we’ve undertaken over the past three years to get ready for drilling. It has helped diversify our business and provided jobs for our shareholder-owners. But the real benefit will come if we find gas in commercial qualities. A gas supply in our back yard has the potential of lowering heating costs between 40-50 percent and – if it is large enough – a new export opportunity.

We are able to drill Tolsona No. 1 because of the state’s Frontier Basin refundable tax credits, which covered about $2.4 million of the $3 million in seismic costs and about 73 percent of the estimated $10 million in drilling costs. “Ahtna would not be doing this exploration if the tax credits were not there,“ Roy Tansy Jr., our executive vice president, told the Legislature earlier this year. Representative Jim Colver and Ahtna’s other legislators have fully supported our gas drilling efforts.

SAFETY – Safety is not only a core value at Ahtna, it’s the Number One priority of our customers. As J.P. Connelly, regional director of Alaska procurement for BP Exploration (Alaska) told us a few weeks ago: “We look for suppliers that value safety as really part of what they do, as opposed to something else they just have to tick the box for.”

Our clients take note of Ahtna’s outstanding performance. Alyeska Pipeline Service Co. nominated Ahtna Construction as Contractor of the Year for Safety Performance, an award presented by the Alaska Oil and Gas Association. The company also received an Atigun Award for its part in responding to the Sag River flood repairs. Alyeska presents these awards annually to honor innovative work, exciting projects and shining-star professionals along the pipeline.

Finally, I want to thank our amazing employees – who worked so hard and produced such good results, often working in a challenging environment to benefit our shareholder-owners.

Thank you,

Tom Maloney
Chief Executive Officer