From the selling side, part 2

Josh Welcome to Coming Down the Pipe ARS Global's monthly podcast about pipelines, pipeline construction, investments and the market in general. We are the streamlined sourcing - streamlined - no, okay start over.... Welcome to Coming Down the Pipe, ARS Global's monthly podcast about pipelines, pipeline construction, investments, and the market in general. We're the midstream partner for streamlined sourcing solutions, and today we have the man, the myth, the legend. Ryan Ryan Piper. Josh Ryan, why don’t you tell everyone what you do for ARS, and how long you've been doing it. Ryan Yeah, so I’ve been here for two and a half years now and handle business development activities, get involved in operations and project management. Quoting. So entertainment, golfing adventures, golf tournaments. Dinners. Lunches. So all the, all the fun stuff. Josh I'm Josh Averrit, President of ARS Global. Been here for about four years and I handle some business development functions as well as some general operations activities. And today, Piper, what we're going to talk about is the role that ARS plays in the sales cycle in our peer to peer model and what we offer, I guess, to buyers and sellers. Josh So, you know, I think there's a misconception about when other brokers or other companies may try to to kind of line up two parties in a pipe transaction. And I think the misconception is buyer, here's a seller. Let's all let's all get this pipeline and it's not quite that easy, as we both know. And one thing that I want you to talk about today is what does ARS do for a buyer in that in the moments after they come to ARS and say, Hey, man, I need ten miles of 36 inch pipe, Can you find it? Josh And we say yes. What does that typically look like for you on the business development side? And what services do you offer in that realm? Ryan Well, yeah, We're here to make life easier for our customers and also folks on the selling side as well. So we'll arrange those schedules or excuse me, inspections. We'll schedule those inspections. We’ll provide all traceability, prove that MTRs, any type of welding documentation, anything, any document related to that pipe, we’ll provide it and show that it's all intact. Ryan We'll be involved in the strip and recoat process if necessary. We'll also we can manage the logistics. I'm trying to think of what else. I mean, it's the full gamut. It's not just, hey, we connected buyer to seller and hopefully the transaction occurs. We want to be there and with white gloves, hopefully get that deal across the finish line. Josh Yep. 100%. And when you talk about, you know, managing the logistics side of it, what what does ARS usually do from a logistics perspective? Ryan Well, we we can be involved with rail trucking, sometimes a combo of getting the pipe to a rail spur if one's not close, you know, right there on on site at the pipe yard. We've entertained barging pipe from point A to point B as well. So we have preferred logistics folks that we talk to daily on a daily basis and they're super helpful and great resource for us. Josh Sure. And and why would a seller or a buyer per se, why would they hand - why would they hire ARS to handle that and not just handle it themselves? Ryan Perhaps they don't have the the folks internally that that can do it you know but they they'd rather than one throat to choke, so to speak. You know that's that's kind of where we've been helpful to owner operators in the past. Josh Sure. And the owner of our company, Tyler Williams, he always preaches focus your focus where your focus needs to be. And I think that hiring ARS really helps the the owner, the seller focus their focus where it needs to be. Right. And that that comes down to even finding buyers for the pipe. I think the the buyers or the buyer organizations like someone’s procurement department, an oil & gas company’s procurement department, they need be focused on sourcing materials for new projects and making sure their contracts have the right language and moving their organization down the line. Josh They don't need to be focused on evaluating their inventories all the time for idle assets. And then what does that idle asset look like? It looks like pipe that's sitting in the middle of a farmer's field in middle of South Texas with a with a lease involved with equipment, involved with overhead involved. Josh And then then you go to someone whose job is to purchase the pipe and you say, hey now I need you to get rid of it. But where do they start? Right. They don't really focused on that. And that's where ARS comes into comes into the picture with our peer to peer model. And as the Investment Recovery Association says in their handbook, there's kind of a hierarchy of, I would say returned capital on your assets. Josh And at the top of that hierarchy is an end user. And that's what ARS specializes in focusing on is the end users and in turn the seller can turn idle idle inventory into cash and receive a lot more cash than they typically would and like selling to another broker to a scrap company. And those other brokers and scrap companies kind of work their way down the triangle of of that hierarchy from the Investment Recovery Association. Josh And so what ARS focuses on is the end users. But we also have a network of brokers. And on the last episode, Wendy talked about some of the construction companies that she deals with on a daily basis, and that would be kind of the middle rung is either a a salvage company or or another broker and typically prices are about about the same. Josh And then as we work our way down it, it goes to scrap. And if it ever gets to scrap, something's going really, really wrong with all the pipe buyers out there, as well as the reduced returns. It's going to be a massive write down for for any oil and gas company. And that is not a good word around, especially around publicly traded companies. Josh When you talk about impacts on return per share basis and things like that, when you start taking write offs every quarter, just because your pipes sat around in a pipe yard for years and years and years and no one bothered to take a look at it and and look at someone like ARS Global, they can they can turn that into some money. Josh So, you know, after after the sales process goes down and then you guys have arranged an inspection and arranged stripping and recoating and/or arranged to outbound logistics. How do you start tracking new projects for, you know, that that project's dead and gone? It's it's done. It's well it up it's in the ground. So what now for Ryan and Wendy and Dennis and everyone What what happens after that? Ryan Well, we're always tracking projects, so we've got our spreadsheets where we monitor timelines, project name, scope, the gas company owner operator, the transmission company. Sometimes we're monitoring on the buy side, if perhaps there is a cancel project or somebody has left over some surplus, say that's three or four miles left over, they bought extra and they need to get rid of the three or four miles of ten, 12, 16 inch or whatever the case may be. Ryan Then we can come in and and possibly be a good resource there. Josh Great. And what would you say is the ARS’s sweet spot as far as buying inventory? If I was a seller or a gas company and I had some leftover inventory, what would or would you say ARS’s specialty is? Ryan I mean, if you look at our track record, we purchased several hundred miles of 36 and 42 inch pipe. So I would venture to say that there's probably nothing that's that's out of our wheelhouse at this point. Josh Fair enough. And I think that, you know, with all of the CCUS. competition going on in the United States right now and the hydrogen world and things like that, I think that, you know, we're going to maybe have to evolve from that 36 inch and 42 inch model down to some smaller diameters. I think there's going to be some project cancellations down the road. Josh Unfortunately, because no one wants to see projects actually get canceled, we want them all to go. But unfortunately, it's the nature of our industry and the nature of a business, especially when you start looking at speed to market and companies that are a little more nimble than others, they get their pipe in the ground faster and that point someone ends up getting left holding the bag. Josh So what what we're going to look at is evolving into that 8, 10, 12, 16 inch space. And, you know, really try to become the full midstream partner that we know we already are. But you know, one thing and this is kind of a this is kind of a general message out there, Not only do we purchase 36 and 42 inch pipe, but we also purchase large quantities of small diameter pipe as well. Josh So we're always on the lookout for that. And if if there is any out there, we'd we'd love to take a run at it. So, Ryan, thanks, man, for joining us. Always, always fun being with you. And we'll see you guys on the next episode of Coming Down the Pipe, our monthly podcast that you can get on any of the platforms that you that you get your podcasts on, please make sure to like and subscribe and we'll see you again next month.