Originally Posted by
PhiAlpha
They purchased those buildings and renovated them to become part of their "campus" in 2010 or 2011 but retreated back to the main building after last years' layoff. I believe they started marketing them as early as last March (layoffs were in February). Given that it was only 11,134 square feet, I'm not sure they sold both of them. The cooler of the two was the former Joe Kelly's Restaurant and has a pretty cool deck behind it overlooking the pond. The other had a very nice, newly renovated training room in it and I want to say either the former owner or the owner of the restaurant back in the 80s lived in the upstairs portion of it. It has a fireplace, a big bathroom with a shower and what looks like was a kitchen at one time. It's too bad that the expansion plan fell apart because they had a pretty cool little campus going with some ambitious additions planned for it. The construction quality of their main building and the renovations on the other two were top notch.
Having said that, they've been marketing those properties since immediately after the layoff, so I don't think the sale is indicative of a further decline in the company's condition. Due to all of their Enhanced Oil Recovery (EOR) operations, they are uniquely positioned to ride out the downturn as well as any company (or any of the struggling companies) in town assuming some of the dumb decisions made over the last few years aren't too big to overcome.
EOR (tertiary recovery) involves using CO2 to re-pressurize formations depleted during primary recovery and waterflooding (secondary recovery) operations. Assuming continuation of current activity levels, production from all their EOR fields is set to increase for the next 10-20 years before they start a long, slow decline. Most of the investment is made upfront in building infrastructure so at this point they can either continue to drill cheap vertical wells to increase production or slow down and let the price come back before spending more money to increase production that they would get less money for. Because the EOR production decline is so much flatter than that of shales and tight oil formations, they don't have to keep drilling rampantly to replace production. Since production from wells under the each of the EOR units is unitized they can probably even shut in wells and lower production to whatever level is needed to cover the bills without producing oil that could be sold for more later this year or next.
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