A Red Deer company with fingers in several resource industries could be poised for growth, says its CEO.
Blue Horizon Energy Inc. holds oilsands leases and is involved in test drilling in the Peace River Arch area of Northern Alberta through its Blue Horizon Energy division. The company is also active in dismantling and moving industrial plants through a Blue Horizon Contracting division; has a 74 per cent interest in Blue Horizon Mining Inc., which is engaged in mining exploration projects in British Columbia; and owns Blue Horizon Bio-Diesel Inc., which plans to develop a pilot plant near Edmonton for the commercial production of biodiesel.
“We’re very diversified,” said Don Allan, Blue Horizon Energy’s CEO.
“The construction company is our No. 1 revenue source right now,” he added, calculating the payroll of Blue Horizon Contracting at about 55 — with these currently focused on a $17.5-million plant dismantling project in Kitimat, B.C.
“That’s generating the majority of the cash flow.”
The other division and subsidiaries employ around 15 people, he said, with most of these in Red Deer. They consist mainly of administrative, business development, accounting and technical staff.
Allan expects the activity levels and manpower needs of Blue Horizon Energy’s other operations to ramp up, particularly with economic conditions improving.
“We’ve found the markets are opening up for us. The opportunities are there now.”
On Thursday, Blue Horizon Energy announced that it’s entered into an arrangement agreement with MLB Industries Inc. of Lethbridge. MLB Industries is listed on the Canadian National Stock Exchange (CNSX:BMP), with the deal expected to give Blue Horizon Energy access to the equity markets.
“That’s the intent,” said Allan, cautioning, however, that the agreement with MLB Industries remains subject to shareholder approval and regulatory requirements, including Canadian National Stock Exchange approval.
If it does proceed, MLB Industries would acquire all of Blue Horizon Energy’s shares and become Blue Horizon Industries Inc. A concurrent exchange of shares would leave Blue Horizon Energy’s existing shareholders with about 95 per cent ownership of Blue Horizon Industries.
In addition to creating opportunities for raising capital, becoming a publicly traded company would improve the marketability of existing shareholders’ interest in the company, said Allan.
“We knew at some point we’d have to go public. We waited until we were a size that we could justify it.”
He added that Blue Horizon’s base of operations will remain Red Deer, where most of the company’s shareholders live.
“I’d say probably 80 per cent of the stock is held locally in the Red Deer area,” said Allan.
He said the remainder is owned by residents of Alberta, Saskatchewan, British Columbia, Ontario and even the United States.
Allan was previously involved in Peace River Oil, another Red Deer company that planned to develop an oilsands upgrader and refinery in the Peace River Arch. But it fell victim to high costs and the downturn in the economy.
“The return on investment wasn’t there,” he said.
Blue Horizon is more diversified and operating on a smaller scale, said Allan.
“It’s a better plan for us.”
hrichards@www.reddeeradvocate.com