Augusta Industries Subsidiary Scores Another Sale with Large Canadian Pipeline Company

Augusta Industries Subsidiary Scores Another Sale with Large Canadian Pipeline Company

By: Dylan Sikes - AllPennyStocks.com News

Tuesday, November 18, 2014

Measuring just major crude oil, petroleum and natural gas pipelines in the United States tallies more than 450,000 miles of pipeline. To put that into perspective, consider that it’s about 25,000 miles around the Earth, meaning that U.S. pipelines could loop around the circumference of the planet more than 18 times. Even though the rail business has significantly ramped up in transporting oil, it still pales in comparison to the magnitude of oil pumped through the pipelines. The International Energy Agency estimated that in 2013 about three-quarters of the oil in the U.S. was transported via pipeline and less than 10 percent by rail. The IEA also evaluated spills, with an analysis showing that a reported spill by rail is six times more likely than a pipeline, although an average pipeline spill is typically more severe. Toronto-based Augusta Industries Inc. (TSX-Venture:AAO), through its wholly owned subsidiary Fox-Tek Canada, provides solutions to the oil and gas market for monitoring the integrity of pipelines so repairs can be made before a spill happens. Fox-Tek has developed the FT fiber optic sensor and corrosion remote monitoring system, a non-intrusive asset health monitoring sensor scheme to help operators track the thinning of pipelines and refinery vessels due to corrosion/erosion, strain due to bending/buckling and process pressure and temperature.


Augusta is horizontally diversified, with its other wholly owned subsidiary, Marcon International Inc., an industrial supply contractor principally selling and distributing industrial parts and equipment to the energy sector and a number of US Government entities. In addition to departments and agencies of the U.S. Government, Marcon's major clients include Saudi Arabia-Sabic Services (Refining and Petrochemical), Bahrain National Gas Co, Bahrain Petroleum, Qatar Petroleum, Qatar Gas, Qatar Petrochemical, Gulf of Suez Petroleum, Agiba Petroleum and Burullus Gas Co.

Fox-Tek has been having some sales success, with a steady flow of order announcements in recent months. Following an order in July, the company in October shipped two of its Electric Field Mapping (EFM) systems to Equion Energy Limited for use at Equion’s Columbian field operations. While remaining unnamed, “one of Canada’s foremost pipeline companies” seems to be seeing value in Fox-Tek products. Earlier this month, four more installations of Fox-Tek’s 112-pin sensor array EFM systems were installed in Canada as a repeat order from said pipeline company.

That news was followed on Tuesday with Augusta Industries saying that Fox-Tek has received a contract to design, manufacture and install a large EFM system to monitor a key asset for, again, “one of Canada's largest pipeline companies.” The EFM system, consisting of a 200-pin sensor array, will be used in the monitoring of potential internal wall loss around the girth weld of a 30-inch pipe. The system will continuously send data wirelessly to Fox-Tek’s data vault in Chicago for analysis and presentation to the client via a web portal. Over time, the data will be correlated with other data to understand better the integrity of the monitored location and validate the existing mitigation program. It’s the second EFM of its kind ordered by the pipeline company for monitoring a large girth weld.

"A repeat order from one of Canada's foremost pipeline companies, will go a long way to demonstrate the Corporation's long term partnerships,” said Allen Lone, President and CEO of Augusta Industries, in a Tuesday statement. “It is clear that our business will continue to grow as the acceptance of our engineering services continues to be well received within the industry. We look forward to many more projects such as this one," he added.

The repeat orders and growing sales are translating in share price appreciation over the past year. Shares have climbed from around 2 cents to a current level at 15 cents in that time, although the news today hasn’t inspired the stock, which is down 6.3 percent in late afternoon trading.

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