When longtime oilfield service contractors, Dallas-based H.C. Price Co. and Houston, Texas-based Gregory & Cook Construction Inc. merged in January to create Price Gregory Services Inc., few could have predicted the recent market meltdown and the ensuing credit tightening that is already beginning to hinder the operations of many businesses.
But H.C. Price Chairman Charles Price and Gregory & Cook President Paul Gregory, both savvy construction industry veterans, made just the right move in bringing together companies that happen to be two of North America’s largest contractors with the equipment and capability to build large-diameter pipelines.
With foresight that, no doubt, has sparked envy among their peers, Price and Gregory have created a leading provider of infrastructure services with a focus on pipeline construction and related services.
They also equipped the company for the future, recruiting a new generation of top managers and soliciting an equity investment from SCF Partners, an energy-focused private equity firm, to help finance Price Gregory’s future growth.
Price and Gregory, meanwhile, will take seats on the company’s board as directors.
“The merger was very timely for market conditions,” said Dave Matthews, Alaska area manager of the new company.
The winning strategy resulted in Price Gregory Services attracting about $1.5 billion in revenues this year and lining up work out to 2012. This includes seven new projects in the Lower 48 and two in Canada.
In Alaska, the larger company has given the former Price Alaska division access to capital, which made it possible to add more than 70 pieces of equipment, including new cranes, welding equipment and two Watson air drills, Matthews said.
Price Gregory also recently got a commitment from ENI to build a $40 million pipeline project that will link to shore a manmade island that the oil independent is building to develop the Nikaitchuq oil field offshore from the North Slope’s processing facilities.
“It’s the largest pipeline project on the North Slope,” Matthews said.
The contractor is also completing a second year working on upgrades for Alyeska Pipeline Service Co. for its ballast water treatment facilities at the marine terminal of the trans-Alaska oil pipeline in Valdez.
Poised for expansionPrice Gregory consistently performs leading-edge engineering procurement construction projects for clients in Alaska, Canada and the Lower 48. The company’s history dates back 86 years to oil pipeline construction’s earlier days before World War II.
Thanks to the merger, the company is now in a better position to serve its existing clients through a larger asset base, greater geographic coverage and expanded management depth. Its services include oil, gas and products pipeline construction, metering and valve station installation, cleaning, repair, DOT hydrostatic testing and maintenance services, power generation, pump, and compressor stations erection and road boring.
“Our core competency is mechanical-electrical related pipeline projects, electrical power and process facilities, and infrastructure installations,” Matthews said.
After 32 years of working in the state, the Alaska division provides turnkey services to oil and gas companies on the North Slope, building new energy transportation infrastructure. The Anchorage division also offers pipeline and facility maintenance services. They also provide general contracting services in the construction of power generation facilities in the state of Alaska
“Price Gregory is now twice as big (as each predecessor company) with more capabilities than the sum of the parts,” observed Matthews.
The combined company also will serve as a strong foundation to build a broader midstream infrastructure provider that will seek to add complementary services to its existing portfolio of capabilities.
With this goal in mind, Price and Gregory recruited two top executives – John Jackson and Lee Beckelman, formerly president and chief executive and chief financial officer of Hanover Compressor Co., respectively — to join its corporate management team.
Jackson and Beckelman will be responsible for leading the company’s future strategic growth and financing initiatives.
Tom White, formerly president of Price, became chief operating officer of the new company, while Price and Gregory became directors of the company.