Marlon Ellerby, president and co-founder of Energy Auctions Inc, founded Energy Auctions back in 2008 out of a necessity in the marketplace to provide an avenue to liquidate surplus equipment. He said that “back then there wasn’t an exclusive auction house in Canada that offered an outlet for process/production equipment. Being the first on the block to exclusively sell this type of equipment where it sat gave us an immediate welcome to the industry, and now 8 years later we are still the only auction out there that focuses on production equipment. Our customer base that we have built up over the years is mostly comprised of EPCM’s, Producers, Consultants, Fab Shops and of course Brokers”.
Should I sell now or wait?
Waiting for better times to maximize your return for used assets is no doubt the best scenario but if that means you have to let key personnel go, then liquidating some surplus equipment may be the better option. Industry after industry have gone through tough times and the O&G world has probably seen more than anyone else. This is the time to start thinking outside the box and coming up with creative ways to get that much needed capital to stay ahead. Auctions can do this if done right. Instead of dropping the equipment off at a auction yard and holding your breath hoping for the best, work with the auction company that specializes in the type of equipment you have and come up with creative ideas and target markets. The days of ‘shotgun marketing’ is in the past! You need to be smart and have a plan. If your $250,000 treater is selling between a lowboy and a skidsteer do you have to ask yourself “have I done everything in my power to get the most return for my asset”?
Marlon told us that they have sat down with numerous companies in the past year and came up with a plan that helped the seller get more for their equipment. There are lots of great auction companies out there, just make sure they are approachable and willing to work with you and bring ideas to the table that works for these times.
When deciding what to do to create much needed cash flow you don’t need to look any further than the surplus equipment desk at your company. There is money sitting there in equipment that more often than not has been sitting idle for quite awhile. “Prices for quality used equipment is still bringing a decent dollar” says Marlon. The less attractive equipment out there that needs work will obviously get hit pretty hard. A thought though is even if it brings a little what good is it sitting doing nothing. Energy Auctions boasts the fact they can sell the equipment where it sits rather than the seller incurring added costs to move the product to a yard. This helps considerably when every $ counts! Right now ‘cash is king’