Notice To Reader:
Pin provides a Value Statement. These are numbers given to us by the client. We arrange these numbers into a form and proprietary formula specially designed to illustrate value in a format that is easy to read and understand. Pin does not know if the numbers given were correct for ratio used to determine defense of value. Numbers used must be verified by your accountant, other trusted sources, or proven facts.

History and Profile:
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This business hauls oil and salt water from the wells.  The business has steady work from 14 regular clients plus others.  The business can be traced back to 1956 when oil was first discovered in the area.  This opportunity provides steady, profitable work and the business offers consistent growth.

• hard assets of $1,503,000 plus cash flow valued at $766,000 = $2,269,000
  • October 2011 cash flow was $250,000
  • current yearly cash flow of $1,750,000 returns $383,000 normalized net
    cash flow is valued at a ratio of normalized net
  • standard ratio used is 3 x normalized net which equals $1,149,000
    plus hard assets as stated by owners
  • using a ratio of two times normalized net = $766,000
    plus hard assets as stated by owners
  • There is a case to argue the ratio should be three or four times normalized net income,
    but because the seller would like a quick sale the ratio chosen was 2 x normalized net income.
• fair market value for the company including hard assets is therefore estimated at
  $766,000 + $1,503,000 = $2,269,000

The oil being drilled in this field is cheap oil. The drilling programs would not be interrupted unless oil was to go down to something like $35 per barrel which seems unlikely. There is ongoing turmoil in the Middle East and strong demand from a growing Asia and China who, as part of their 5 year plan, are building up the infrastructure in their second, third and fourth tier cities. The US will continue to need all the oil we can produce even if they go into another recession. It should be noted that this oil is considered CLEAN OIL which makes it even more valuable in the eyes of some.

For a larger company involved in oilfield trucking this opportunity would provide an easy way to grow sales by THREE MILLION dollars per year with little risk. Even if oil prices were to go down and production eased in other areas, creating more competitors, it is unlikely this company would lose market share because of the level of service provided and the companies know once the market opens again the newcomers flee. The worst prediction is lower profit and growth.
 
Purchase of this business opportunity includes a 3,200 ft² concrete floor workshop with a large cement pad and gravelled storage yard.