In November of 2001, The Hanover Company’s Tulsa-based process fabrication division, Hanover Russell and Elkhorn Construc-tion, Inc. were contacted by who was then Barrett Resources, Inc. about our interest in constructing a 100MMCF/D amine & refrig-eration plant in the Parachute Creek area of Western Colorado. Hanover Russell & Elkhorn had just recently and successfully com-pleted the smaller Haybarn Refrigeration Plant and were busy completing the Grand Valley Amine Plant expansion in the same area. Both of these projects were a success for Barrett Resources, who now carry the name of Williams Production, after the Williams Companies purchased Barrett in 2001. All parties hoped that Hanover Russell and Elkhorn would team up together again to bid on the proposed new and much larger plant. It’s fair to say that Hanover Russell and Elkhorn went through some minor growing pains on how to work together on the previous two projects. However, both companies felt that we had learned many lessons on how to be one team on a project and if we applied those lessons learned, we would have a great chance at being the successful bidder. We certainly had the quality people on both sides, but had to learn how to work as a team instead of adversaries to do the project at a lower cost than the competition and yet be profitable. Meetings on how to approach the project from both the engineering and construc-tion sides took place and information shared in those meetings was applied to the bid. Our team was successful and won the bid in a competition against four other bidders. The project was awarded on December 21, 2001, and made a good Christmas present for both companies. Everyone

WILLIAMS PARACHUTE CREEK PLANT COMPLETED IN RECORD TIME

F A L L 2 0 0 2

A PUBLICATION OF ELKHORN HOLDINGS, INC. VOLUME 8, ISSUE 3

“I would like to extend my sincere thanks and grat-itude to all of the Elkhorn people who worked on the Williams Parachute Creek Project. I was very impressed that Elkhorn was able to achieve the October 19th completion and start-up date. I must confess that I had real doubts that the accelerated date could be met. Elkhorn's people and manage-ment were highly motivated to get the job done! Also, I appreciate Elkhorn's super assistance dur-ing the start-up. I hope we have the opportunity to participate with Elkhorn on many successful pro-jects in the future. Thanks Again.”

Gary Wortham Project Manager, Hanover Russell

By Cole Deister, Denver District Manager

was looking forward to a mid April start for construction and Hanover Russell began to work on engineering, procurement and building the shop fabricated items. However, between December and April, there started to be some doubts about the project going forward. Happily, financing the project for Williams was finally resolved between Hanover Russell and Williams, however, with this milestone came the request to complete the project in just twenty-two weeks with a June 1st construction start date! Elkhorn agreed in early May to the timeframe and other fi-nancial arrangements, and limited site work began on June 1st. Permits were delayed and still being obtained which lim-ited what could and couldn’t be done. Elkhorn and Hanover Russell spent many long days deciding how to arrange delivera-bles to meet the now compressed schedule. Our previous expe-rience with each other and our new found team concept was the only thing that got us through this difficult period. With major struggles behind us, and a schedule in hand, progress through June, July and August was good. We had good weather, good equipment deliveries, engineer-ing was caught up and the craftsmen in the field were dedi-cated and well organized. Things were progressing so well that talk of an early finish began to happen. Recognizing this achievement, in parallel with excellent progress on the associ-ated new pipeline construction, Williams came to the Hanover Russell / Elkhorn team and of-fered incentives to complete the plant construction even earlier. An agreement was forged to complete early with many thinking it was impossible. All crafts in the field were working together and set in place a new plan to accomplish the work early even though the crafts would often be blocked by other events taking

place in the same work areas. Once again, this was accom-plished by the teamwork of all involved. During the period of October 1st through October 10th, piping was being tested and completed, electrical was being completed and commissioned, painting and insulation was well underway and our Project Managers were concentrating on the critical punch list. Hano-ver Russell was busy starting commissioning activities, the pipeline contractor was finishing and tying into the plant, com-

pressors and engines were be-ing final checked and the buildings were being sheeted. By Tuesday, October 15th, full-blown commissioning and startup had begun. On Satur-day, October 19th, just twenty weeks from breaking ground, the plant was ready to ship treated gas down the newly finished pipeline. There are a lot of names with-in Williams Production, Hano-

ver Russell, and Elkhorn, and a lot of reasons this project was a success and was completed early. I couldn’t begin to list them all for fear of missing some. A big part of the success involves all of the people in the background supporting the field, espe-cially those who had to cover all of the other projects so this

one could stay on track.

Teamwork is learned the best on projects performed the best. This was such a project. Thanks to everyone that had a hand on this one.

WILLIAMS PARACHUTE CREEK PLANT (Continued from front Page)

PAGE 2

“Williams Production in Parachute is im-mensely pleased with Elkhorn's performance and especially with the personal dedication exhibited by Project Managers Gilbert Eaves and Tom Fiore.” Bob Gardner, Plant Superintendent and Project Engineer Williams Production, a division of Williams Energy Services

THOUGHT FOR THE DAY

I believe- that our background and circumstances

may have influenced who we are, but we are responsible for

who we become.

Welcome – it is inspiring to see such a great turnout. This speech has taken many twists and turns in its preparation the last few days as I have asked - what is important to each of you here today – what are you looking for from this speech? How do the events of a year ago and their aftermath continue to af-fect us? What does the future hold? These are all important questions that need to be answered, but I have been paralyzed by concern that this year’s speech will not measure up to last year’s and have struggled with the proper answers, so please bear with me. First, thanks again to Mitch for the well organized meeting and the ambitious agenda, thanks to all of you for attending, for your hard and safe work over the last year, and for your willing-ness to listen, learn, contribute and grow over these next two days, and into the future. It is implausible to begin without remembering the terror and emotion of last year. If you have not seen the pictorial remem-brance that Hillary sent Pete, please take the time to do so. During our moment of silence in Evanston, while the flag was being lowered, I was once again overcome by emotion and pride. We will never be able to eliminate the possibility of events like this as long as we continue to enjoy the freedom that threatens our self-proclaimed enemies – and rest assured, we will never surrender that freedom. What each of us can do is to continue our daily lives with that in mind, being vigilant but not paranoid, being afraid but having the courage to overcome that fear, and by having faith that we will prevail. Faith is the bridge that takes us from reason to wisdom and allows us to dream without limits, as our children do. Each of us controls that drawbridge, the side we live on and the direction and fre-quency with which we cross. Recently, we had dinner with two families who have been touched by other tragedies that occurred in this past year. One had much of their personal wealth and all of their retirement tied up in Enron stock, and lost all of that value. The other lost everything to a flood outside of San Antonio, all of their world-ly possessions. All of us are aware of the losses suffered by Mitch and Sharyl and his brother’s family. These events provide a prism through which to view the “Elkhorn” world that eliminates the shadows. Yes, this year has had its share of struggles, as will the future - but they pale in comparison to what many have had to endure. How would you like to have been an honest, hard working partner at Arthur Anderson? – having spent your entire working life trying to build something that others brought down so quickly. Mitch has adopted a theme for this meeting of Craftsmanship,

Leadership, Ownership and Partnership. I will focus on Lead-ership and the Personal Responsibility necessary to be a good leader. Let’s review what we have previously identified as critical ele-ments of our strategic direction for the Elkhorn Enterprise:

ELKHORN HOLDINGS MISSION, VISION, VALUES

CORE DRIVING FORCE

Creating A Customer Focused Ownership Culture.

MISSION

We provide construction solutions that create success for our customers.

VISION The vision of the Elkhorn Enterprise is to be recognized as the industry’s provider of choice, focused on maximizing the value

to our clients and employee owners.

GUIDING VALUES

Believe we can Ensure safety and respect the environment Loyalty and Teamwork Improvement with Integrity Experience enhanced with education Vigor, Vitality and Virtue Employee Ownership

These need to serve as a guide for each of our actions taken every day with respect to our work here at Elkhorn. We had dinner with two sets of customers last night that indicated we are doing these things in their eyes. That is always satisfying to hear. Each of you holds a position that is looked to for leadership.

The State of The Company Address

PAGE 3

THE PRESIDENT’S COLUMN

(Editor’s note: For this Fall 2002 President’s Column, we asked Sean to allow us to reprint his spoken comments to the Annual Management Meeting, held in Grand Junction this past September 12th and 13th)

By Sean Sullivan, President and CEO

Are you providing that leadership? To answer that question we need to keep things simple – good advice for everything we do today, all of our tomorrows, and especially for PERT (The Process Evaluation and Review Team). The answer lies in the eyes of those expecting you to lead. Do they see action or ex-cuses? Do they see fear or courage? Do they get decisions and/or direction or do they get stalled? Do they see confidence and commitment? In short, do they see someone willing to take personal responsibility? Only you can answer these questions – but it is imperative that you be brutally honest with yourself when answering. Remember that only three of the hijacked planes crashed into buildings because some of the passengers on the last of those planes took the responsibility to ensure that their loss of life saved the lives of others. Personal Responsibility is a team requirement for success and requires self-sacrifice. This may sound like a contradiction in terms, but doesn’t have to be. Pete is a good example. We butted heads repeatedly until we agreed Pete was only going to be measured by the success of the entire Elkhorn Enterprise and our rise from a $20MM contractor to a $50MM one is a testa-ment to his efforts. He decided to take personal responsibility for the team’s success. You will see a video on Saturday, which has been created by two of our employees in Rock Springs. They epitomize personal responsibility. Please thank them for their efforts and let the film stimulate you to find the other leaders currently undiscovered in the ranks of our em-ployees. When a business team has leaders who take personal responsi-bility, profit and money are byproducts of that effort. Nowhere in the critical elements discussed above did we list money as an objective. I sincerely believe that if it is the end we seek, it will somehow selfishly corrupt the overall team effort as it did at Enron and Arthur Anderson. However, if we succeed in achieving the critical elements identified earlier, I have no doubt there will be plenty to go around.

At Elkhorn, we seem to be reluctant and almost afraid to hold each other accountable. A good leader holds themselves and others accountable because they treat others just as they want to be treated. It doesn’t get any simpler than that. If we clearly define the expectations, we’ll find that people want to be held accountable. The score carding and PERT parts of the Impact Process are essential, in some form or another, to our success. How many of you enjoy playing any game where they don’t keep score and there are no rules or guidelines? Always think about what we are comparing to – what is the standard – here again our country is a great example – is it enough that we are the greatest country in the world if we fail to live up to our own ideals? And is a 1.51 Total Recordable Incident Rate, while a dramatic improvement and an industry leader, acceptable if people are still getting hurt? We are in a transition period at Elkhorn that provides us the opportunity to become a high performance enterprise and sepa-rate ourselves from our competition. Recently in mass, the priest asked us whom we had to fear. He let us ponder the pos-sibilities and then stated we had probably considered both God and the Devil, but shocked us by stating the simple, obvious answer – we only have to fear ourselves, for we are the ones making all the decisions. Sounds a lot like personal responsi-bility. We can and will identify and seize our opportunities at Elkhorn. I know we will succeed because we have so many good players on this team and because we continue to add new good players. It won’t always be easy, but we should always make it enjoya-ble for each other. While the human spirit has historically been capable of evil like that we saw last year, it remains indomita-ble. Let this Annual Management Meeting proceed with focus, determination, good will and fun.

Thank You,

PAGE 4

THE PRESIDENT’S COLUMN (Continued from Page 3)

GREETINGS ELKHORN EMPLOYEE OWNERS, Wanda and I are pleased to return to the Intermountain West after a 12 year absence. We’ve had the pleasure of seeing old acquaintances and meeting new ones. My hope and desire is to be able to consolidate and share the vast knowledge and experience level, that you as employee owners company wide have the luxury of possessing in your chosen craft, and to maximize the same, which has become necessary to meet the de-mands of an ever changing construction industry. I look forward to meeting and visiting with you in the near future. I hope to team with you and, to-gether, structure a working program that will help each of you reach your potential and meet the requirements necessary to complete each job safely and in a professional manner. These criteria are those to which you, as employee owners, and our clients have become accustomed.

PAGE 4

‘HOWDY’ FROM FRED MOORE (BOJACK) YOUR NEW CRAFT TRAINING AND QUALITY CONTROL MANAGER

Fred’s PICTURE

Sean’s Signature

By Mitch Midcap, Vice President and COO

About two years ago we discovered our Denver Enterprise Leader, Cole Deister, using something he termed “The Work Circle”. He had developed it while considering the natural process of our business. The circle starts out with Find Work, then proceeds to Get Work, Do SAFE Work, and then onto Get Paid For Work. Then we start an-other revolution around the circle. We shortly thereafter, adopted “The Work Circle” company wide. What does “The Work Circle” mean? Well, to identify that we need to break down the four phrases found in the circle.

1. Through our marketing efforts, we Find Work. Should we rely wholly on our Director of Marketing, Pete Straub, to find us work? No. Every employee/owner in Elkhorn Holdings, Inc. is responsible for finding work. It is understandable how those in management positions can find work, but how would an employee/owner out on a project Find Work? The an-swer - by bringing the owner’s pro-ject in on schedule, under budget, with quality craftsmanship and in a safe manner, in other words: a job well done. A project com-pleted like this will make the next sale much quicker than the slickest talking salesper-son in the county. Each and every one of us, from the office to the field, are in the marketing aspects of our business. Some are doing a great job. Are you contrib-uting?

2. Through employee/owner marketing efforts, as described above, we Get Work. This means we have the opportunity to provide our construction services for an owner. This opportunity comes in different ways; i.e., Time and Material, Lump Sum, Bench Marking, and Cost Plus a Fixed Fee. Our estimating department, which includes those in the corporate office as well as those involved in each of the Enterprise units, are key to this process. Those of you working hard in the field, getting the next project awarded to us without going through the bidding process are another key.

3. When we are successful in landing that next project, we have the obligation to each other (our employee/owners) and our clients, to Do SAFE Work. Providing a satisfied owner with a project on schedule, under budget, and with quality craftsmanship, is only a successful venture if we have completed the project safely. The only place for safety is first. No other place is acceptable. Safety, productivity, and quality craftsmanship can and will work in har-mony if we plan our work wisely.

4. We will have little issue with Get Paid For Work if we follow the above definition of Do SAFE Work. Obviously it is im-portant that we be compensated for our work. That is one of the things that helps us to keep moving around “The Work Circle” over and over again.

In preparing for this year’s Annual Management Meeting, I sought some suggestions for developing a motto for the conference and re-ceived about fifty of them. The decision was a struggle, as none really captured what direction the meeting needed. Three days before the meeting I still had not decided, but I had narrowed it down to two. These two were, “Energizing The Work Circle” and “Craftsmanship, Ownership, Leadership”. Aha! I finally had it; I could use both of these in conjunction with “The Work Circle”. I looked up the defini-tions of these words to make sure of their meaning, this is what I found; “Craftsmanship” – is one skilled in a craft or art, “Ownership” – the state of being an owner, “Leadership” – the office, position, or capacity of a leader; guidance. The ability to lead, exert authority, etc. A group of leaders. I thought, this is good; this is what the com-pany needs, but something is still missing.

A couple of weeks earlier, I had been involved in some serious discussions about areas of oppor-

tunity within our family of companies. It was brought to my attention that all was not as

rosy as things could be. We were doing a good job of selling and marketing

our capabilities and talents as indi-viduals and as enterprises, but it seemed we were lacking the unity that would bring us together as a solid, harmonious group. But what was still missing? “Partnership”. “Partnership” between individuals, enterpris-es, divisions and companies. What a critical link we were missing! What is “Partnership”? It is defined as:

1. The state or relationship of being a partner; association. 2.

a) A contractual relationship in which two or more persons combine

capital, labor, etc., to carry on a busi-ness. b) The contract that creates such a

relationship. c) The persons associated. “Partnership” will not only bring us together as

a better company, but it will enhance our relation-ship to our clients.

I proceeded to add “Partnership” to the motto: “Craftsmanship, Owner-ship, Leadership” and wrapped it around “The Work Circle”, and

placed “Energizing The Work Circle” as the title below. Wow, I thought! If we could actually put all this in motion, there would be no stopping this lean, mean ESOP machine. Each and every one of our employee/owners brings so much individual talent and skill to our family of companies. These talents and skills are demonstrated over and over again each and every day. The effort being exerted is tremen-dous and has helped in creating a great culture and company. But what would happen if we truly began to work as a unified partner through-out the organization? The results will be absolutely amazing.

Where are you in and around “The Work Circle”? Are you making a difference and is it helping us in “Energizing The Work Circle”? Each and every one of us will make a difference, with our safety attitude, the quality of our “Craftsmanship”, response to “Ownership”, call to “Leadership”, and our place in the “Partnership”. We are moving to the next level. Are you ready? If so, load ‘em up, and climb on board, this lean, mean, “Energized” ESOP machine.

PAGE 5 PAGE 5

ENERGIZING THE WORK CIRCLE

Energizing the Work Circle

Cherokee Teaching (Author Unknown)

An old Cherokee is teaching his grandson about life. "A fight is going On inside me," he said to the boy. "It is a terrible fight and it is between two wolves. One is evil - he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego. The other is good - he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith. This same fight is going on inside you - and inside every other person, too." The grandson thought about it for a minute and then asked his grandfather, "Which wolf will win?" The old Cherokee simply replied, "The one you feed."

These are some of the projects and clients that we have been working for this last quarter: Hanover Russell (for Duke Ener-gy Field Services) we recently completed the field construction

for the Lumen Station Stabilizer Plant. ChevronTexaco Our crews have been working at the Carter Creek Gas Plant doing production en-hancement projects. We are also working at the LaBarge and Birch Creek fields and have begun providing two crews for production enhancement in these fields. El Paso Energy Work is wrapping up on the Wamsutter C02 Extraction Plant. Pearl Develop-ment Company engineered the project and provided construction management for the skids. Elkhorn Construction provided the onsite construction ser-vices. The project was started on time and we’re currently finishing up the final detail. Kern River Gas Transmission Opal Metering Sta-tion Facility. Lee Harvey is the site project superin-tendent and Mike Gottfried is running the shop fabri-cation. The concrete is nearly finished and the pipe fabrication is well under way for a December com-pletion. All above ground piping is –50 degree spec-ification and required qualifying a special welding procedure. Anadarko Petroleum Lucky Ditch Plant demolition. Elkhorn dismantled and mothballed three process skids and associated equipment, then moved them to the Brady field for storage. Price Area: ChevronTexaco Darby McLean and John Densley and crew are putting the finishing touches on an 8"

pipeline. On this project we teamed with Nielson Construction, who provided excavation operators and equipment. Also, Jim Greenhow and Dee Christensen and crews are installing an Amine unit at the Huntington Facility, setting compressors at the Huntington Facility and the Orangeville Facility – and working on an injection facility. ConocoPhillips Cecil Leeper and crew are starting rebar and excavation on the new amine facility at C-5. Roger Urness and crew will be starting the pipe fabrication. Bill Barrett Corporation Jeff Addley and crew - misc. little projects up Nine Mile Canyon. Roger Urness and Nolan Johnson and crews have been constructing well sites and miscellaneous smaller projects in the Waltman, Wyoming area. Rock Springs Area: PacifiCorp Steve Garris currently has eighteen employees at the Jim Bridger Power Plant. Kenny McCormick is busy doing bid projects with a small crew. They are doing concrete work and will fabri-cate and install two metal buildings along with an eighty foot stairway on Unit Three Cooling Tower with landings every 20 feet. Steve and crew do an excellent job in keeping PacificCorp's needs met in all aspects of maintenance work from carpentry, welding, insulation, sheet metal, scaffolding, abate-ment work, and anything else that needs to be done with a can do attitude. Burlington Resources Inc. (Lost Cabin Gas Plant) Cecil Van Patten is managing a crew of five appren-tice electricians and electricians, taking care of Lost Cabin Plant’s maintenance needs. Williams Energy Services provided us with several small projects at Clay Basin this past summer. Williams Energy Services (Echo Springs Plant) Our crews have been taking care of their mainte-nance needs and also several small shutdowns dur-ing the year.

E L K H O R N

N E W S

T I D B I T S

PAGE 6

PROJECT NEWS

August 3, 2002 marked the fourth year anniversary of my employment with Elkhorn Construction. It really doesn't seem like four years have passed al-ready. In those four years, we at Elkhorn have seen many ups and downs, success's and failures, but the good part is we've never stopped learn-ing and moving ahead. In those four years the estimating de-partment has had its ups and downs also. We've gone through several changes with employees, moved from the small cubicles to productive offices, caught up with technology and built a strong reputation with our clients for our proposal preparation and honesty in dealing with owners, vendors and sub-contractors. We are only now proving ourselves as a true support function to the field after the sale with our help in procurement, scheduling, coordination, docu-ment control and follow up during the course of the project. This success can only be attributed to the team that we have assembled, the individuals and their talents that they bring to the team. I am very proud of the other employee owners on the Elkhorn Corporate Estimating Team. Not many companies our size have this talent, support and dedication that is dis-played everyday. I just wanted to recognize these team players and let them know that I appreciate everything that they do for the company

and also the support they provide me to better do my job . The team members: Travis Willard (Lead Project Estima-tor), Lois Kearl (Document Control), Mark Fruechte (Project Estimator), Ron Zierman (Procurement), Kyle Tynsky (Project Estimator) and me, Mark Ogg (Director of Estimating). (Although we recently lost Mark Fruechte, as he took a job with one of our clients, we wish him well and appreciate his contributions while he was on our team. ) I would also like to thank each of you for your support and understanding when things haven't gone quite as planned. I

look forward to this next year and am anxious to see what lies ahead for us as a safe, aggressive and pro-gressive company. Thank you, Mark Ogg and the Estimating Team

PAGE 7 PAGE 7

ESTIMATING TEAM GROWS UNDER THE LEADERSHIP OF MARK OGG

Rock Springs Area: (Cont.) Questar Regulated Services (Blacksfork Plant) Jason Wilson and crew completed a small pipe project this past summer. We routinely work at Blacksfork and other facili-ties on an as needed basis. Duke Energy Field Services (Patrick Draw Plant) Elkhorn Construction, Inc. just completed a concrete vessel and

pipe installation while Dynamic Services fabricated and installed a metal building. Dynamics also did the painting of a vessel and associated piping. We are planning a mole-sieve change out during shut down at the plant this month. Chris Burke is currently working maintenance there and will supervise the crew during the shutdown. TRC Our crews recently did an environmental project which consisted of some excavation work and setting up propane and diesel tanks, piping them into their test equip-ment.

PROJECT NEWS (CONT.)

CONGRATULATIONS! NEW NCCER MASTER CRAFT TRAINERS

WALTER (WALLY) JONES -WHO IS ALSO OUR

NCCER ADMINISTRATOR AND

DOUG MITCHELL

By Ken Bratz, TAMCO Performance Consultants, Inc. In January, 2002, Elkhorn began implementing the IMPACT process, a process that allows our organization to better serve our external and internal customers, improve our communica-tion and team building, and create more efficient processes to operate our business. The IMPACT process is quite compre-hensive and creates accountability with each Elkhorn employee to do their job the best they can do. Because Elkhorn is an em-ployee owned company, IMPACT can help in our quest to get employees thinking as owners. This article gives a description of the IMPACT process. IMPACT has its roots in many organizations. Its birth was with a group of sixty people that could not get along at work. This group included union members and had a multi-year histo-ry of problems. After a year of wrestling with a number of techniques and a lot of group interaction, the sixty people be-came a champion team, setting the pace for their organization. The process was then taken to other locations in their organiza-tion and eventually saved their company over $50,000,000 real dollars. Many other organizations have since implemented a version of IMPACT with similar results. IMPACT has three major components:

Developing a clear strategy and communicating it through-out the organization. This involves the development of a measurement scorecard that is eventually developed by each person with direct reports.

Implementing the strategy through increased communication and team building exercises. All core employees are in-volved in monthly discussion exercises that allow everyone to move toward alignment with the organizations values and goals.

Follow-up and review on a monthly and annual basis. Over a period, each team becomes accountable for a review of their accomplishments for each month and their goals for the next month.

Elkhorn, like most organizations, has employees that have come from a variety of different cultures. How do you get all these achievers on the same page and moving in the same di-rection? First, it requires a strong and dedicated leader. Se-cond, it requires the leader to walk the talk. Third, it requires the leader to let their followers have room for trial, error, and practice without retribution or getting chewed out. Good coaching is not normal in organizations. The IMPACT process creates a common language that allows those with direct re-ports to create a participative culture that encourages feedback

and new ideas. After the strategy is developed, all core employees attend a one day workshop that introduces them to the new common lan-guage, helps them understand their communication style, and provides experiential exercises that illustrate how real problems should be solved. All employees then participate in a series of monthly exercises and discussions that reinforce the common language and have them create action plans to implement their conclusions in their work. Internal facilitators that are trained to provide good pro-cess and meeting results lead these exercises. The results are monitored monthly through the development of scorecards with a balanced emphasis on five areas: financial, customers, processes, learning and growth, and culture. Lead-ing indicators are encouraged (measuring proactive factors), as well as lagging indicators (measuring something that has al-ready happened). The corporate scorecard is the final measure-ment area. All other scorecards must align with the corporate scorecard. During the development of the strategy, a two day retreat was held with the major stakeholders attending. The session was very interactive with a lot of pre-work to gather data about Elkhorn, present the information, and discuss what was really happening both within Elkhorn, as well as the market. A major factor that occurred was the identification of our internal pro-cesses and how well they were functioning. The discussion was extremely revealing. As a result, a PERT team (Project Evaluation and Review Team) was developed that has been extremely effective in evaluating our current processes and providing recommendations for improvement. The team gets input and uses the expertise of all employees in the improve-ment process, demonstrating how we want our future culture to look. The journey for culture change is said to take five to seven years. Elkhorn expects to cut that time in half. We are experi-

encing positive emotion and the employees are able to say what they feel without negative feedback. New ideas are being generated that will be valuable during implementation. Elkhorn’s new mission statement is: “We provide construction solutions that create success for our customers.” Every employee at Elkhorn is com-mitted to make our mission happen.

The IMPACT process was developed by:

Ken

PAGE 8

PAGE 8

HAVING AN IMPACT

BIT O’ WISDOM:

Standing in the middle of the road is dangerous.

You will get knocked down by the traffic from both ways.

bp, Energen, & SG Interests: Bloom Field Service technicians continue to provide fieldwork for these clients in the San Juan Ba-sin. Duke Energy Field Services-

Bird Canyon Compressor Station: The Ft. Lupton shop completed fabrication on a 16” 600# Ultrasonic Meter tube, skid & building for Bird Canyon Com-pressor Station near La Barge, Wy. This meter tube along with another existing 16” meter tube on site are vital for the natural gas flow going to California. Evergreen Resources: Fabrication of an 8’ x 12’ building for Evergreen Resources near Trinidad, Co. Elkhorn Construction, Inc.- Williams Gas/ Trans Colorado Interconnect: The Ft. Lupton shop com-pleted fabrication of a dual 10” Senior Measurement Station with headers & bypass. Piping along with a Chromatograph- controls building were shipped on three truckloads to Rifle, Co. for field installation by Elkhorn crews. Kinder Morgan, Inc.- Huntsman Compressor Sta-tion (Sidney, Nebraska): The Ft. Lupton shop is fabricating a Transfer & Injection Pump Skids for

Kinder Morgan in Nebraska, including the installation of the electrical switch gear for these skids. Kinder Morgan Power- Cogen Plant (FT. Lupton, Co.): The Ft. Lupton shop along with assistance from the Bloomfield shop recently completed repairs on the supports in the switchyard at the Ft. Lupton Cogeneration Plant. We will also be installing equip-ment heaters and a security system for the storage yard in this same facility. Kiewit Network Services- RTD Surveillance En-closures: The Ft. Lupton shop is building eight Cam-era/Computer Equipment Enclosures to be installed at different RTD Park & Ride locations in the Denver Metro area. These buildings are the first phase of many, that may be installed to increase security at the RTD Park & Ride locations. Williams Field Services- San Juan Basin Area Gathering Operations: The Bloomfield shop com-pleted fabrication of two separator/contactor units. Williams Gas/ Northwest Pipeline- Evergreen Ex-pansion Project/ State of Washington: The Ft. Lupton shop, along with the assistance of the Bloom-field shop, are fabricating six Unit Valve Skids and three Utility Fuel Gas Skids. This large project, which started in September, will continue into February 2003 before it’s completion.

bp America, Inc.: Booster #3 Compressor at Florida Riv-er Plant will be finished end of November by Randy Watts and crew. Jerry Gottfried and crew is currently working on the Miera Compressor Station addition , a project that is scheduled to be finished by Christmas. Jake Sinclair and his crew will start the McCaw Water Injection facility dur-ing the second week in November. Fort Lewis College: physical plant construction is another successful foray into commercial construction by the Four Corners District, currently on schedule and on budget with the hard work of Dennis Hembd and his crew. Tri State Generation: A project at the power plant that includes building a transformer foundation will be finished next week by John Woolf and his crew. Also Mark Jones and his crew is finishing up a maintenance turnaround at the facility. Optimized Process Design: Working for owner El Paso Energy, Kevin Stumke and his crew are performing a elec-trical project. Hobbs Area: Navajo Pipeline: Joe Worthy and his crew are laying thir-

teen miles of six inch replacement crude pipeline near Big Springs Texas. Project includes removal of existing line. Hobbs area craftsmen also have been working on miscel-lenous projects for bp America, Inc’s Hobbs Fractionator, and other projects for Duke Energy Field Services and Oxy USA, Inc.

PAGE 9 PAGE 9

H O A D

N E W S

F O U R

C O R N E R S

PROJECT NEWS

ELKHORN’S FOUR CORNERS bp WORKERS DO IT

SAFELY ALL YEAR LONG!

Elkhorn, Dynamic Service and ProSafe, working on bp America, Inc. projects in the Four Corners District have completed one year consisting of 140,295 hours of work without a recordable or lost time in-jury. Congratulations to all involved! Truly, without the support and encouragement of our client, this milestone would be much more difficult to attain.

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P R O S A F E

PROJECT NEWS (CONTINUED FROM PAGE 7)

By Randy Erickson,

ProSafe General Manager

The most dangerous thing we do is drive to and from our worksites! Now that winter is ap-proaching, we need to modify our driving habits to be prepared for the adverse driving condi-tions winter brings.

The leading cause of death during winter storms is transportation accidents. Preparing your vehicle for the winter season, preparing a winter survival kit, and modifying your driving habits can lessen the chance of a vehicle accident.

Prepare Your Vehicle

Have a mechanic check all of the fluids including windshield washer fluid, antifreeze for strength as well as correct type and change the oil, using a winter grade.

Have a mechanic check the exhaust system, heater operation, brakes, windshield wipers and battery con-dition.

Check your tires for tread and condition. Look for any cracking or defects in the sidewall and tread depth and condition.

Keep a windshield scraper in the vehicle and clean the ice and snow from all windows before traveling.

WINTER DRIVING

Denver District News: Duke Energy Field Services: Greg Humphries and crew installed new process pumps at Roggen Plant. Our crews will be building platforms at Roggen and doing misc. painting. bp America: Lorne Roy and crew are doing civil and misc. piping for an installation of a propane storage tank at Wattenberg Plant. Kinder Morgan Power: Billy Cunningham and crew are busy offloading approxmately two hundred truck-loads of gas turbine generation equipment for long term storage. Kerr McGee Rocky Mountain: (Ft. Lupton Station) Ray Leonard and crew is busy with a new fit-out for a station addition. At Platteville, Ray is installing a new dehydrator. El Paso Energy (Colorado Interstate Gas): Jake Sin-clair and Steve Rushing were busy this quarter cleaning compressors, troughs, and sumps, and installing air in-jection compressors at Ft. Lupton station.

Rifle Area: Williams Production: Along with the construction of the Parachute Creek Plant, (see cover story), Rifle crews have been doing miscellenous projects outside the scope of plant construction. EnCana: Rifle crews are finishing two gathering sys-tem compressors at Rifle and doing miscellenous other work and compressor installations. Crews have also began working on the JT Plant that will be built at Rifle. Canyon Gas Resources: A new client with many pro-jects in the planning stage, our Rifle crews are beginning to work on miscellenous projects. Kansas District News: Kinder Morgan: Working at a compressor station in Columbus Junction, Iowa, Kansas and Wyoming crews under the guidance of Max Morgan and Cleo Gottfried installed new compressor coolers and piping and com-pleted miscellenous field work. bp America: Back on track performing the construc-tion of field compressor installations, Daniel Bordier and Greg Humphries and their crews will be working through the end of the year.

E L K H O R N

Fill the fuel tank and maintain at least ½ tank of fuel at all times.

Equip your vehicle with a winter survival kit, the kit should consist of :

Battery jumper cables.

First aid kit.

Duct tape, flashlight, bright colored cloth, matches.

Flares or reflector.

Sleeping bag or blanket.

Supply of high calorie food (canned nuts, candy, nutrition bars).

A bag of sand, shovel.

Prepare Yourself

Allow for additional time to clear ice and snow from windows.

Allow for the additional warm up time.

Allow for the additional time it will take to complete the trip on slick roads.

Modify Your Driving Habits

Winter driving means snow covered road, decreased visibility, increased wildlife in or on roadways. Driving defensively and understanding the basics of winter driving can reduce these hazards.

Slick Surface Driving Basics

When parking your vehicle for some time while it is snowing, back into the parking space. Vehicles have better traction moving forward than they do in re-verse. Plan ahead.

Make all moves slowly and carefully. When starting out, speeding up, slowing down, stopping or turning, operate the accelerator pedal and the brake pedal as though you have an egg between your foot and the pedal. If you push too hard, the eggshell will break.

If the main traffic lane is slippery and you are having trouble getting up a hill, try driving slowly with two wheels on the edge of the roadway. Turn on your

flashers to warn other motorists of your reduced speed.

Try to avoid following closely behind another vehicle while going up a hill. If it loses traction and starts to slow down, you will slow down and spin out too.

If you start to spin out while going up a hill, ease off of the accelerator slightly and gently resume speed.

TURN THE STEERING WHEEL IN THE DIRECTION OF THE SKID! Do not lock up the brakes while in a skid. When your wheels are locked and skidding, they will not turn.

If your vehicle is not equipped with ABS (Anti-Locking Brake System) brake gently using a pumping motion on the pedal.

If your vehicle is equipped with ABS, hold a constant gentle pressure on the brake pedal.

Decelerate well in advance of a turn or stopping point. Try to avoid using the brakes while turning. Slow down in advance of the turn and accelerate very gen-tly while going through the turn.

When descending a hill, pick your maximum safe speed while at the crest and then stay under that speed throughout the decent, using gentle off/on braking. Don’t expect to do all of your braking at the stop sign at the bottom of the hill.

Remember that road conditions can change very dra-matically. From ice to wet to bare and dry all in the same day. Watch for ice on bridges and overpasses even though the rest of the roadway is just wet or maybe even dry.

Increase the following distance you maintain behind other vehicles. If you are maintaining a three second interval, increase it because of the loss of stopping ability on slick roads.

All wheel drive vehicles go better in the snow and on slick surfaces, but they do not stop any better the two wheel drive vehicles.

If you develop good driving skills and preplan you trips, winter driving does not need to become a nightmare.

Born to Gabe Estrada and Mandy Meek a new baby boy on 8/31/02 5 lbs. 12 oz. 20" long - Estevan Estrada

Born to Kevin and Kari Stuemke a new baby boy on 7/23/02 8 lbs. 3 oz. - Jacob Stuemke

Born to Joe and Debbie Worthy a new baby girl on 8/20/02 7 lbs. 12.8 oz. 19.5" long - Faith Mykala Worthy Welcome to Connie Hansen whose only been on board

for a short time helping out in the Hobbs Area Office. Connie's addition to Elkhorn has been a good one. Keep up the good work! The FC Management Team

Congratulations Gina Jones Simms - Tied the knot with her father’s (Bill Jones) help, to Kevin Simms 10-26-02

Losses Our heartfelt condolences and prayers go out to Jim Greenhow for the loss of his father, Eva Escobedo for the loss of her mother, and Ken Manzanares who lost his father-in-law.

Winter Driving (Cont.)

EMPLOYEE NEWS

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We would like to hear from you. If you have a question or thought that would benefit the company, please write us (anonymously if you like). Letters to the editor are also welcome. We would also like to hear about the many good things going on such as births, graduations and the like. You can simply give the details to your Service District Receptionist or to your supervisor.

The Elkhorn Bugle Elkhorn Holdings, Inc.

Elkhorn Construction, Inc. Service Districts

Wyoming Four Corners P.O. Box 809 400 S. Bloomfield Blvd. Evanston WY. 82930 Bloomfield NM 87413 (307) 789-1595 (505) 632-9677 Kansas Colorado P.O. Box 1069 P.O. Box 738 Liberal, KS 67901 FT. Lupton, CO 80621 (620) 624-2038 (303) 857-0956

Elkhorn Construction, Inc. Area Offices

Rock Springs, WY 82902 Price, UT 84501 265 Industrial Ave. 1755 A So. Highway 10 (307) 362-4970 (435) 637-9517 Rifle, CO 81650 Gillette, WY 82718 P.O. Box 1468 4800 S. Butler Spaeth Rd (970) 625-4180 (307) 689-0253 Hobbs, NM 88240 2133 French Dr. (505) 393-8921

Subsidiaries and Divisions

HOAD, Inc. Dynamic Services P.O. Box 168 P.O. Box 809 FT. Lupton, CO 80621 Evanston ,WY 82930 (303) 857-0956 ((307) 783-5050 ACOBIE ProSafe 400 S. Bloomfield Blvd. P.O. Box 809 Bloomfield NM 87413 Evanston, WY 82930 (505) 632-9677 (307) 783-5040 The Elkhorn Bugle is a quarterly publication for our employees, retirees, and their families, as well as, our friends and customers. Corporate staff edits and coordinates this publication, although it would not be possible without the help of other folks in each of our service districts and subsidiaries. Your Articles Are Greatly Appreciated!

Address Label Area

An Invitation

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By Mary Becker, PC Guru and Geek Recently, we upgraded our web servers to accommodate an interac-tive web environment for document sharing and data access. This upgrade will allow us to share documents over our website securely, and allow users to manage data, whether in the office or on the road. Some of you were inconvenienced for a short period of time access-ing your email. The changes that were made in your email were a part of our upgrade process. In the near future we are hoping to have some of our existing database applications available on our website for use corporately. We hope these changes will not only be advantageous to our employees but also will allow us to share infor-mation with our clients.

ACCESSING YOUR ONLINE EMAIL can be done by going to the following links to your company site address:

http://mail.elkhornconstuction.com http://mail.dynamicservices.net http://mail.hoadinc.com

Pick the email client you would like to use on this page by clicking on the link under email utilities. Login entering your entire email address e.g. jdoe@elkhornconstruction.com and your password. This will allow you to view your email from anywhere online. Your email will be there until you either delete it online or download it to your PC by using your email program.

Note: If you move your messages online to another folder other than ‘Inbox’, your email program on your PC will not download your mes-sages. Your IT Dept., Don Dalke, Head Geek and Mary Becker, Assistant Geek, want to thank you for your patience during our transition peri-od.

PC Leaks from the PC Geeks