GRAPEVINE, Texas--(BUSINESS WIRE)--GreenHunter Resources, Inc. (NYSE MKT: GRH) (NYSE MKT: GRH.PRC), a diversified water resource, waste management and environmental services company specializing in the unconventional oil and natural gas shale resource plays, announced today financial and operating results for the Company’s quarterly report Form 10-Q for the three months ended March 31, 2014.
OPERATIONAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2014
Highlights from the Company’s financial and operating results include the following:
- During the three months ended March 31, 2014, GreenHunter Resources’ wholly-owned subsidiary, GreenHunter Water, continued to strengthen its dominant position as an owner and operator of commercial salt water disposal (SWD) wells in the Marcellus and Utica Shale plays in Appalachia where it exited the first quarter 2014 with over 13,900 barrels per day (BBL/D) of operating permitted disposal capacity, along with operating a fleet of 39 vacuum trucks capable of transporting brine and condensate. Total disposal volumes for the Company’s nine (9) Appalachia SWD’s increased approximately 97% in the first quarter 2014 to 927 thousand barrels as compared to 471 thousand barrels disposed in the first quarter 2013. The company continues to develop barge transloading and bulk storage facilities for oilfield brine and condensate in the Appalachia region along the Ohio River with operations anticipated to begin in the near future.
- Operating revenues from continuing operations were $8.5 million during first quarter 2014 compared to $4.7 million for first quarter 2013, an increase of 79%. Our loss for 2014 from continuing operations was $1.3 million for fiscal year 2014 compared to a loss of $1.7 million for 2013. Our net loss per share from continuing operations for both 2014 and 2013 was ($.08) per share, basic and diluted. Our loss on discontinued operations for 2014 was $130 thousand (a loss of ($.00) per common share, basic and diluted), compared to loss from discontinued operations of $5.8 million (loss of ($.17) per share, basic and diluted) for 2013. Our net loss per share for both continuing operations and discontinued operations, basic and diluted, was ($.08) compared to ($.25) for the years 2014 and 2013, respectively.
- The Company reported positive EBITDA from continuing operations of $378,072 for the first quarter 2014.
- On January 28, 2014, the Company sold the Kenedy Hunter well to Sable Environmental for aggregate consideration of approx. $3.9 million. Total consideration of $1 million cash and a promissory note for approximately $2.9 million with an interest rate of 10% per annum and maturity date of January 31, 2016 was received at closing.
- On January 31, 2014 the Company sold its second MAG Tank™ and had revenue of $800 thousand related to this sale.
- On February 19, 2014, GreenHunter Mesquite Lake entered an agreement to sell the biomass project to ML Energy Park, LLC for $2.0 million. The closing is scheduled for March 15, 2015. The prospective buyer made an initial payment of $50 thousand as earnest money deposit and has continued to pay $50 thousand per month to date and is required to continue the monthly payments for a year or until deciding to ultimately purchase the property. The monthly payments, as well as the initial $25 thousand fee, are non-refundable.
- On February 28, 2014 the Company closed on the private placement of approx. $1.1 million of the Company’s unsecured term notes due one year from the date of issuance together with 100,879 common stock purchase warrants with an exercise price of $2.25.
- On March 16, 2014 the Company began operations of the Mills Hunter #2 SWD well, located in Meigs County, Ohio. The well has a permitted capacity of approximately 1,500 bbls per day and has been running near capacity since going operational.
- On March 26, 2014, the Company sold the Westhoff Hunter disposal well to Clearwater Resources for a purchase price of $3.4 million. Total consideration of $1.0 million in cash and a promissory note for approximately $2.4 million with an interest rate of 10% per annum and a maturity date of May 1, 2016 was received at closing.
- On May 1, 2014, the Company sold the Dilley disposal well to Sable Environmental for a purchase price of $4.7 million. As part of the agreement, the purchaser paid off the original $2.9 million promissory note that was issued on January 28, 2014.
The Company recently established a new environmental solutions division, GreenHunter Environmental Solutions’ (GHES). Based on customer demand and the amount of business that has been referred to locally based environmental service companies, the company made the decision to add this new business segment to our Total Water Management Solutions™ package of services.
GreenHunter Environmental Solutions’ (GHES) initial business lines will handle our existing customer needs in the following areas and will expand based on customer demand:
- Roll off services, offering versatility in storing and transporting dry or wet materials, cleanup material, construction debris and equipment. Sludge boxes, Vacuum boxes, dewatering boxes and general debris boxes are some of the storage options we provide
- Vacuum Service of cement, sludge, lime, sands, and gravel. GHES is capable of vacuuming material from up to 1,000 feet away and can discharge the material into trucks, dumpsters or landfills
- Vessel, Tank, and Work Surface Cleaning Services utilize water jet technology to remove scale, hydrocarbons, coke, baked polymers and other difficult deposits from various process vessels and tanks, which will include:
- Decommissioning Services
- Frac Tank Cleaning
- Rig Platform Cleaning
- Mud Pits
- Waste Minimization and Transportation
- Confined Space Cleaning and Rescue
Following the initial rollout of these business lines, additional segments such as spill response and waste storage, solidification, and disposal may be added.
Commenting on GreenHunter Resources financial and operating results released today, Mr. Kirk J. Trosclair, Executive Vice President and COO, stated, “During the first quarter of 2014, management continued our focus on executing the previously announced divestiture of non-core assets in South Texas and Oklahoma, which significantly improved our balance sheet. Management is committed to continuing our growth efforts in our Appalachia Division where we have added one additional SWD well in the first quarter, increased the size of our trucking fleet, and established a new environmental solutions division. Our management is focused on significantly increasing our ability to dispose additional volumes of water this year by expanding the number of SWD facilities.”
|SELECTED BALANCE SHEET DATA (UNAUDITED)|
|March 31, 2014||December 31, 2014|
|Cash and cash equivalents||2,730,288||1,302,857|
|Total current assets||13,196,566||10,907,674|
|Net fixed assets||29,853,070||36,992,348|
|Total current liabilities||20,862,580||20,595,245|
|Total long-term liabilities||8,438,410||9,074,148|
|Total stockholders’ equity||16,129,477||18,356,407|
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarter Ended March 31,
|Water disposal revenue||$||3,683,862||$||2,554,180|
|MAG Tank™ revenue||800,000||—|
|Skim oil revenue||340,219||153,332|
|Storage rental revenue and other||219,962||404,420|
|COST OF GOODS AND SERVICES PROVIDED:|
|Cost of goods and services provided||6,029,635||3,205,603|
|Depreciation and accretion expense||763,984||716,884|
|Stock based compensation||369,409||416,923|
|Selling, general and administrative||2,081,110||1,818,887|
|Total costs and expenses||9,244,138||6,158,297|
|OTHER INCOME (EXPENSE):|
|Interest and other income||10,280||502|
|Interest, amortization and other expense||(446,951||)||(228,922||)|
|Loss on sale of assets||(56,228||)||—|
|Total other income/expense||(492,899||)||(228,420||)|
|Net loss before taxes||(1,258,500||)||(1,660,468||)|
|Income tax expense||—||—|
|Loss from continuing operations||(1,258,500||)||(1,660,468||)|
|Loss from discontinued operations||(129,694||)||(5,800,639||)|
|Preferred stock dividends||(1,249,999||)||(1,026,647||)|
|Net loss to common stockholders||$||(2,638,193||)||$||(8,487,754||)|
|Weighted average shares outstanding, basic and diluted||33,796,389||33,358,489|
|Net loss per share from continuing operations, basic & diluted||$||(0.08||)||$||(0.08||)|
|Net earnings (loss) per share from discontinued operations, basic & diluted||$||(0.00||)||$||(0.17||)|
|Net loss per share, basic & diluted||$||(0.08||$||(0.25||)|
The reconciliation of adjusted EBITDA from continuing operations as compared to GreenHunter Resources GAAP loss from continuing operations for first quarter ended March 31, 2014 is as follows:
|Loss From Continuing Operations||(1,258,500||)||(1,660,468||)|
|Non-Cash Stock Comp||369,409||416,923|
|Other Non-Cash Losses||56,228||—|
|EBITDA From Continuing Operations||378,072||(297,739||)|
About GreenHunter Water, LLC (a wholly owned subsidiary of GreenHunter Resources, Inc.)
GreenHunter Resources, Inc., through its wholly owned subsidiaries, GreenHunter Water, LLC and GreenHunter Environmental Solutions, LLC, provides Total Water Management Solutions™/Oilfield Fluid Management Solutions™ in the oilfield and its shale plays of the Appalachian Basin. GreenHunter Water continues to expand its services package by increasing down-hole injection capacity with Class II salt water disposal wells and facilities, with the launch of next-generation modular above-ground frac water storage tanks (MAG Tank™), and with advanced water hauling – including a growing fleet of DOT rated 407 trucks, for hauling condensates and water with the presence of condensates. GreenHunter Water has also spearheaded the movement to barge brine water, as barging is the safest and most cost-effective mode of transport.
GreenHunter Environmental Solutions, LLC offers onsite environmental solutions at the well pad and facilities, with a service package that includes tank and rig cleaning, liquid and solid waste removal/remediation, solidification, and spill response.
An understanding that an interconnected suite of services is key to E&P waste stream management shapes GreenHunter Resources’ comprehensive end-to-end approach to services.
For a visual animation of the Class II Salt Water Disposal well development and completion technique that is being utilized in GreenHunter Water’s Appalachia SWD program, navigate to the video by clicking on “Salt Water Disposal Animation” button on the Operations tab at GreenHunterEnergy.com or click here.
Additional information about GreenHunter Water may be found at www.GreenHunterWater.com
Any statements in this press release about future expectations and prospects for GreenHunter Resources and its business and other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the substantial capital expenditures required to fund its operations, the ability of the Company to implement its business plan, government regulation and competition. GreenHunter Resources undertakes no obligation to update these forward-looking statements in the future.
Non-GAAP Measures: Reconciliation to Standardized Measures
This release contains certain financial measures that are non-GAAP measures. We have provided reconciliations within this release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, measures for financial performance prepared in accordance with GAAP that are presented in this release. We believe adjusted EBITDA (as defined by period net loss as adjusted for income tax, interest expense, depreciation expense, impairment of asset value, non-cash stock based compensation and other non-cash gains) to be an important measure for evaluating the company’s operational progress and as useful information to investors because it is widely used by professional analysts and investors in evaluating companies in a state of high growth. However, adjusted EBITDA should not be considered as an alternative to the standardized measure as computed under GAAP.