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<SEC-DOCUMENT>0000950129-06-009792.txt : 20070112
<SEC-HEADER>0000950129-06-009792.hdr.sgml : 20070112
<ACCEPTANCE-DATETIME>20061117170446
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950129-06-009792
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20061117

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NACG Holdings Inc.
		CENTRAL INDEX KEY:			0001368519
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL, GAS FIELD SERVICES, NBC [1389]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A0
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		ZONE 3, ACHESON INDUSTRIAL AREA
		STREET 2:		2-53016 HIGHWAY 60
		CITY:			ACHESON
		STATE:			A0
		ZIP:			T7X 5A7
		BUSINESS PHONE:		780-960-7171

	MAIL ADDRESS:	
		STREET 1:		ZONE 3, ACHESON INDUSTRIAL AREA
		STREET 2:		2-53016 HIGHWAY 60
		CITY:			ACHESON
		STATE:			A0
		ZIP:			T7X 5A7

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NORTH AMERICAN ENERGY PARTNERS INC.
		DATE OF NAME CHANGE:	20061129

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NACG Holdings Inc.
		DATE OF NAME CHANGE:	20060707
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<HEAD>
<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">November&nbsp;17, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
100 F Street, N.E., Mail Stop 7010<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Attention: Donna Levy
</DIV>


<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re:</TD>
    <TD>&nbsp;</TD>
    <TD>NACG Holdings Inc.<BR>
Amendment No.&nbsp;5 to Form&nbsp;F-1<BR>
Filed November&nbsp;8, 2006<BR>
File No.&nbsp;333-135943<BR>&nbsp;<BR>
North American Energy Partners Inc.<BR>
Form&nbsp;20-F, as amended, for fiscal year ending March&nbsp;31, 2005<BR>
Filed November&nbsp;25, 2005<BR>
Form&nbsp;20-F, as amended, for fiscal year ending March&nbsp;31, 2006<BR>
Filed August&nbsp;30, 2006<BR>
File No.&nbsp;333-111356</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On behalf of the above-referenced Registrants, we have filed through EDGAR Amendment No.&nbsp;7
(&#147;Amendment No.&nbsp;7&#148;) to the above-referenced Registration Statement (the &#147;Registration Statement&#148;).
Amendment No.&nbsp;7 reflects all changes made to the Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In this letter, we set forth responses to the comments and requests for additional information
contained in the letter from the Staff (the &#147;Staff&#148;) of the Securities and Exchange Commission (the
&#147;Commission&#148;), dated November&nbsp;16, 2006, with respect to the above-referenced filings. For your
convenience, we have repeated in bold type the comments and requests for additional information
exactly as set forth in the November&nbsp;16 comment letter. The Registrant&#146;s response to each comment
or request is set forth immediately below the text of the applicable comment or request.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
November&nbsp;17, 2006<BR>
Page 2

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Amendment No.&nbsp;5 to Form&nbsp;F-1</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>General</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note that you have filed a separate confidential treatment request for certain information
contained in exhibit 10.12 to the F-1. We will respond to your request in a separate
communication.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Response: </I>The Registrant has received the Staff&#146;s separate letter, dated November&nbsp;16, 2006,
with respect to the confidential treatment request. The Registrant has re-filed Exhibit
10.12 with Amendment No.&nbsp;6 to the Registration Statement on Form F-1. Only the text for
which confidentiality is necessary and supported by FOIA and applicable Commission rules has
been redacted in the revised Exhibit&nbsp;10.12.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Financial Statements</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 21 &#151; Stock-based compensation plan, page F-39</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note the disparity between your stock option valuation through June&nbsp;30, 2006, and the
offering range of your common shares. Tell us and disclose whether you obtained a
contemporaneous valuation performed by an unrelated valuation specialist as defined by the
AICPA Practice Aid &#147;Valuation of Privately-Held Company Equity Securities Issued as
Compensation.&#148; If not, please revise to disclose the following information related to
issuances of equity instruments:</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Discuss the significant factors, assumptions, and methodologies used in determining
the fair value of the underlying common stock;</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Discuss each significant factor contributing to the difference between the fair
value as of the date of each grant and the estimated IPO price or the fair value as
determined by a contemporaneous valuation by an unrelated valuation specialist obtained
subsequent to the grants but prior to the IPO; and</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Disclose the valuation alternative selected and the reason management chose not to
obtain a contemporaneous valuation by an unrelated valuation specialist.</B></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
November&nbsp;17, 2006<BR>
Page 3

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%"><I>Response: </I>Please note that the numbers of options and exercise prices in the following
discussion have been adjusted to reflect the 20-for-1 share split effected on November&nbsp;3,
2006. While the Registrant did not obtain contemporaneous valuations performed by an
unrelated valuation specialist for the options granted between November&nbsp;26, 2003 and June
30, 2006, it did obtain recent valuations by unrelated valuation specialists for all options
granted after December&nbsp;31, 2004.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">The Registrant granted 1,082,600 options in the period from November&nbsp;26, 2003 to March&nbsp;31,
2004, 92,240 options in the three months ended June&nbsp;30, 2004, 190,000 options in the three
months ended September&nbsp;30, 2004 and 100,000 options in the three months ended December&nbsp;31,
2004. The exercise price of $5 per share for each of these options was the same as the per
share price paid by the Registrant&#146;s sponsors in their acquisition of the Registrant on
November&nbsp;26, 2003. Because of that fact and because no significant changes had occurred in
the Registrant&#146;s business or operations subsequent to the acquisition, the board of
directors of the Registrant did not have any reason to believe that an independent valuation
was necessary and determined that the exercise price of these options was the same as the
fair value of the shares at the date of grant. As disclosed in note 21, the Registrant
recognized stock-based compensation expense of $137,000 for the options granted in the
period from November&nbsp;26, 2003 to March&nbsp;31, 2004.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">The Registrant granted 100,000 options with an exercise price of $5 per share in the three
months ended March&nbsp;31, 2005. In connection with its annual goodwill impairment test, in
February&nbsp;2005, the Registrant received an independent comprehensive valuation report from
Ernst &#038; Young LLP that provided an opinion of fair value as of December&nbsp;31, 2004, which
valued the common shares at $13.32 per share. The Registrant used $13.32 as the per share
market value of its common shares in determining stock-based compensation using the
Black-Scholes option-pricing model for the three months ended March&nbsp;31, 2005. As disclosed
in note 21, the Registrant recognized stock-based compensation expense of $497,000 for the
options granted since its inception on November&nbsp;26, 2003.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">The Registrant granted 717,760 options in the three months ended December&nbsp;31, 2005, 27,760
options in the three months ended March&nbsp;31, 2006 and 127,760 options in the three months
ended June&nbsp;30, 2006, all with an exercise price of $5 per share. In connection with its
annual goodwill impairment test, in February&nbsp;2006, the Registrant received an independent
comprehensive valuation report from Ernst &#038; Young LLP that provided an opinion of fair value
as of December&nbsp;31, 2005, which valued the common shares at $6.10 per share. The Registrant
used $6.10 as the per share market value of its common shares in determining stock-based
compensation using the Black-Scholes
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
November&nbsp;17, 2006<BR>
Page 4

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">option-pricing model for the three months ended
December&nbsp;31, 2005, March&nbsp;31, 2006 and June&nbsp;30, 2006. As disclosed in note 21, the
Registrant recognized stock-based compensation expense of $923,000 and $312,000 in the
fiscal year ended March&nbsp;31, 2006 and the three months ended June&nbsp;30, 2006, respectively, for the options granted since its
inception on November&nbsp;26, 2003.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">In September&nbsp;2006, the Registrant granted 187,760 options with an exercise price of $16.75
per share. In September&nbsp;2006, the Registrant had a valuation performed by an unrelated
valuation specialist, which valued the common shares at $16.75 per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">The Registrant has subsequently calculated the compensation expense that would have been
recognized in the three months ended June&nbsp;30, 2006, using $16.75 per share as the grant date
fair value in the Black-Scholes model for the options granted in June&nbsp;2006, and determined
that the additional compensation expense of approximately $16,000 was not material.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">In each case, the Registrant&#146;s board of directors had either a valuation based on a recent
arms&#146;-length purchase of the common shares or a recent valuation performed by an unrelated
valuation specialist that the board had no reason to believe was wrong in any significant
respect. The board used that data, took into account the business and financial condition
of the Registrant at the time and granted the options at what the board believed was fair
value. In the situations where the independent valuations resulted in a higher value than
the board had determined, the Registrant used the valuation provided by the unrelated
valuation specialist in determining stock-based compensation expense using the Black-Scholes
option-pricing model.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">The Registrant believes that the difference between the value as of the date of each grant
and the estimated offering price is attributable to the Registrant&#146;s improved business
opportunities in its industry, improved operating performance, particularly during the
quarters ended March&nbsp;31, 2006 and June&nbsp;30, 2006, the addition of management personnel with
public company experience, the increase in value arising from expectations of becoming a
public company and the simplification of the Registrant&#146;s capital structure and redemption
of preferred stock pursuant to its planned reorganization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">The Registrant has added disclosure on page 75 of Amendment No.&nbsp;7 regarding the valuations
of the option grants made between November&nbsp;26, 2003 and September&nbsp;2006.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To assist the Staff in its review of Amendment No.&nbsp;7, courtesy packages containing a copy of
Amendment No.&nbsp;7 and this letter are being delivered to each individual shown as a carbon copy
recipient of the Staff&#146;s comment letter.

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
November&nbsp;17, 2006<BR>
Page 5

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If any member of the Commission&#146;s Staff has any questions regarding the foregoing, or desires
further information or clarification in connection therewith, or with respect to any other
revisions to Amendment No.&nbsp;7, please contact the undersigned at 713-221-1306 or Troy L. Harder at
713-221-1456.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
<BR>
<BR>
Bracewell &#038; Giuliani LLP<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-bottom: 1px solid #000000">/s/ Gary W. Orloff
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Gary W. Orloff&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">GWO/pd<BR>
Enclosures

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">cc:</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Vincent J. Gallant<BR>
NACG Holdings Inc.<BR>&nbsp;<BR>
Mr.&nbsp;Kris F. Heinzelman<BR>
Cravath, Swaine &#038; Moore LLP<BR>&nbsp;<BR>
Mr.&nbsp;Troy L. Harder<BR>
Bracewell &#038; Giuliani LLP</TD>
</TR>
</TABLE>
</DIV>


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