Greetings Shareholders,
It was officially announced in August that BP is selling all its Alaska interests to Hilcorp with the transaction scheduled to close sometime next year. The deal includes stakes in Prudhoe Bay, Point Thomson and other Alaska fields. Founded in 1989, Hilcorp is the largest privately held independent exploration and production company in the United States.
The Hilcorp buyout will not affect our carbon credits program transactions as that work is coordinated with BP’s London-based Global Environmental Group. We have built a strong working relationship with BP over many years including our mutual involvement with the Trans-Alaska Pipeline. BP is the largest owner by far with a 49% interest in the 800-mile pipeline which crosses 55 miles of Ahtna-owned lands and 197 miles of Ahtna traditional lands.
We also have an outstanding relationship with Hilcorp Alaska and currently provide contract environmental services, primarily in Cook Inlet, under a Master Services Agreement. We look forward to expanding opportunities for shareholders through our established relations with both companies and a new and exciting North Slope venture. We have been approved by the Alaska Industrial Development and Export Authority (AIDEA) for the purchase of a 23-acre pad to support oil and gas activities on the North Slope.
Operations Updates
Ahtna Netiye’ Executive Vice President Roy Tansy Jr. and I continue to explore acquisition opportunities in Alaska with a focus on increasing shareholder value. The primary considerations when evaluating these companies is if they will increase our service offerings, provide shareholder opportunities and diversify our customer base with non-government revenues. We have evaluated four Alaska-based engineering and technical service companies this year. So far, the companies we have looked at did not meet our investment criteria, but we will continue to seek great companies at a fair price.
We are also growing our work outside Alaska and have finalized a purchase agreement with Cavache, a Florida-based heavy civil and marine services company that provides dredging services to major construction and expansion projects. Staff will be moved under one of our newest companies, Ahtna Marine & Construction.
We are excited about two new Small Business Administration (SBA) mentor/protégé relationships that have been formed which will expand our geographic reach in the Midwest. The first is between Ahtna Marine & Construction and JF Brennan, a 100-year-old construction, environmental services, and harbor management company based out of Wisconsin. Our second relationship is between Ahtna Global and M.A Mortenson Company, a Minneapolis-based construction company.
Ahtna’s Seattle office has been doing very well and recently moved to a new office location in Renton. We will continue to look at the purchase of real estate versus leasing in other locations where Ahtna has conducted business for many years.
A.A.A. Valley Gravel is sponsoring two Ahtna shareholders, Nathaniel Linnell and Julien Cummings, who plan to enroll in the Operating Engineers Local 302 Apprenticeship Program. Both candidates will be working at the A.A.A. Valley Gravel Pit in order to meet the program’s 90-days of experience requirement. The pit operation provides an excellent opportunity for these shareholders to gain exposure to the industry while having good oversight.
New Safety Director
We recently hired Drew Laughlin as the new Corporate Safety, Health & Environmental Program (SHEP) Director. Drew has numerous years of experience with Alaska Native Corporations and Alaska environment work and will be based out of Ahtna’s Anchorage office.
Senator Sullivan Meeting
PDC Engineers invited Ahtna to join them for a special listening session with Senator Dan Sullivan while he was in Alaska in August. Ahtna and PDC Engineers have teamed up on several bids including a recent design/build proposal for an Atka health clinic.
The Senator began the meeting with opening remarks and thanked Ahtna for our help with the Sturgeon court case. Our presentation to the Senator focused on Department of Defense (DoD) development in Alaska and the benefits of choosing Alaska businesses first. We were grateful to learn firsthand all the ways the Senator has been fighting for Alaska. The Senator is trying to increase 8a opportunities for Alaska Native Corporations that have previously been very restrictive. We discussed Alaska’s increasing Coast Guard and Navy base work and we will continue to explore additional base and missile defense contracts in Alaska and the Pacific Ocean.
Per Senator Sullivan’s desire for more information about specific contracting difficulties the Alaska Architecture/Engineering/Construction industry faces, Ahtna and PDC co-drafted a follow-up letter to the Senator. It offered insights to some of the challenges Alaska firms encounter and our ideas for possible solutions.
I hope that everyone had a safe and successful hunting season. The Ahtna value of sharing resources is something that we practice in our business operations and communicate to our employees. By working together and sharing our unique strengths we have achieved many milestones this year. One Team, One Ahtna!
Thank you,
Tom Maloney, Chief Executive Officer
Ahtna, Netiye’