GRAPEVINE, Texas--(BUSINESS WIRE)--GreenHunter Energy, Inc. (NYSE Amex: GRH), a diversified water resource management company specializing in the unconventional oil and natural gas shale resource plays, announced today financial and operating results for the fiscal year ended December 31, 2011.
OPERATIONAL RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011
Our net loss to common shareholders for fiscal year 2011 was $5.5 million or ($0.22) per common share compared to net income of $20.0 million or $0.89 per common share during 2010 which included a $33.1 million extraordinary gain from discontinued operations ($1.47 per common share). The 2010 extraordinary gain resulted from the divestiture of GreenHunter BioFuels, Inc. and its associated non-recourse indebtedness. We began to generate new revenues through the implementation of our water management business during the fourth quarter of 2011. Our total revenue was approximately $1.1 million in 2011 compared to $0 in 2010.
TRANSITION INTO SHALE WATER MANAGEMENT SERVICES GAINING MOMENTUM
For the last twelve months, the management team at GreenHunter Energy worked to position the Company for substantial growth opportunities by beginning the process of building out its Total Water Management Solutions™ portfolio of shale water products and services. In addition to acquisitions and leases of water service properties located in the Marcellus and Utica Shale plays in Appalachia and the Eagle Ford Shale play in South Texas, the Company’s wholly owned subsidiary, GreenHunter Water, LLC, entered into multiple contracts for water storage equipment rental, water recycling for reuse, water hauling and logistics, salt water disposal and water custody and tracking services. During 2011, management completed a $3.1 million equity placement to improve the balance sheet and liquidity as the Company began to implement this new business strategy. Subsequently, the Company has closed on an acquisition of new equipment to service oil and natural gas producers that was financed with a new commercial lending facility from an Appalachia regional bank.
MULTIPLE SHALE PRESENCE ESTABLISHED AND GROWING
In just one year after forming our wholly owned subsidiary, GreenHunter Water, LLC, we have established a strong foothold in the Marcellus and Utica Shale plays of Appalachia by having completed or executed definitive agreements for the acquisition of eight salt water disposal (SWD) wells, thirty seven 500 barrel (BBL) frac tanks, fourteen water hauling vacuum trucks, and a truck maintenance and storage facility. When fully operational, the Appalachia SWD wells will provide approximately 12,500 barrels per day (BBL/D) of Class II underground injection capacity for the disposal constrained states of Ohio, Pennsylvania and West Virginia. Management continues to build upon a pipeline of new acquisitions and development projects to further increase Appalachia SWD injection capacity, add bulk water storage services, and improve the logistics infrastructure in this region. GreenHunter Water has also deployed a water recycling system (Frac-Cycle™), multiple next-generation modular above ground tanks, and a proprietary cradle-to-grave water compliance manifest tracking system (RAMCAT™) in the Marcellus and Utica Shale play region.
In other parts of the country, GreenHunter Water began generating revenues during the first quarter of 2012 from rental and transportation of thirty one frac tanks located in the Eagle Ford Shale play of South Texas where the Company has executed multiple agreements to acquire and/or lease properties for new SWD facilities that will complement our existing equipment rental services by providing injection capacity. Additionally, new leases and Letters of Intent have also been executed for five additional SWD wells located in the heart of the Mississippian Shale play in Oklahoma and the Bakken Shale play in Montana and North Dakota. Each of these areas are targeted for expansion, are liquids rich, and the water-to-hydrocarbon ratios appear to be higher than in other shale plays which is a positive for our business model.
MANAGEMENT COMMENTS
Commenting on GreenHunter Energy’s 2011 financial and operating results, Mr. Gary C. Evans, Chairman and CEO, stated, “Since announcing our new strategic direction in April of last year, management has worked tirelessly to establish a core foundation of facilities and water management products and services in three of the nation’s key unconventional shale resource plays. We have built one of the industry’s most comprehensive suites of Total Water Management Solutions™ with a goal to reduce oil & gas company operators’ total costs of water management while increasing safety and environmental compliance. We have seen our efforts begin to bear fruit early in 2012 with the acquisition of our first active salt water injection facilities. Furthermore, we sense that industry business practices will increasingly validate our diversified and technology-agnostic approach to water clean-up and compliance tracking. We look forward to accelerating our acquisition and project development efforts throughout 2012 which will be reflected in a significant growth in revenues, EBITDA, and ultimately, shareholder value.”
About GreenHunter Water, LLC (a wholly owned subsidiary or GreenHunter Energy, Inc.)
GreenHunter Water, LLC provides Total Water Management Solutions™ in the oilfield. An understanding that there is no single solution to E&P fluids management shapes GreenHunter’s technology-agnostic approach to services. In addition to licensing of and joint ventures with manufacturers of mobile water treatment systems (Frac-CycleTM), GreenHunter Water is expanding capacity of salt water disposal facilities, next-generation modular above-ground storage tanks (MAG Tank™), advanced hauling and fresh water logistics services—including 21st Century tracking technologies (RAMCATTM) that allow Shale producers to optimize the efficiency of their water resource management and planning while complying with emerging regulations and reducing cost.
Additional information about GreenHunter Water may be found at www.GreenHunterWater.com
Forward-Looking Statements
Any statements in this press release about future expectations and prospects for GreenHunter Energy 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 Energy undertakes no obligation to update these forward-looking statements in the future.
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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
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| For the Year Ended December 31, |
From Re-entering |
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| 2011 | 2010 |
2011 |
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| REVENUES: | ||||||||||||
| Storage rental revenue – related party | $ | 937,907 | $ | - | $ | 937,907 | ||||||
| Other revenue – related party | 167,433 | - | 167,433 | |||||||||
| Total revenues | 1,105,340 | - | 1,105,340 | |||||||||
| COSTS AND EXPENSES: | ||||||||||||
| Cost of storage services | 1,065,154 | - | 1,065,154 | |||||||||
| Project costs | 3,316 | (10,630 | ) | (11,379 | ) | |||||||
| Depreciation expense | 189,656 | 189,758 | 284,909 | |||||||||
| Selling, general and administrative | 4,158,096 | 5,080,768 | 7,454,564 | |||||||||
| Loss on asset impairments | - | 160,824 | - | |||||||||
| Total costs and expenses | 5,416,222 | 5,420,720 | 8,793,248 | |||||||||
| OPERATING LOSS | (4,310,882 | ) | (5,420,720 | ) | (7,687,908 | ) | ||||||
| OTHER INCOME (EXPENSE): | ||||||||||||
| Interest and other income | 461,213 | 2,994,283 | 1,319,718 | |||||||||
| Interest, accretion and other expense | (781,791 | ) | (56,506 | ) | (505,620 | ) | ||||||
| Unrealized loss on convertible securities | (185,944 | ) | (1,001,622 | ) | (1,187,566 | ) | ||||||
| Total other income (expense) | (506,522 | ) | 1,936,155 | (373,468 | ) | |||||||
| Loss from continuing operations | (4,817,404 | ) | (3,484,565 | ) | (8,061,376 | ) | ||||||
| Gain on disposal of discontinued operations | - | 33,055,388 | 33,055,388 | |||||||||
| Loss from discontinued operations, net of taxes | - | (8,933,227 | ) | (2,495,802 | ) | |||||||
| Net Income (Loss) | (4,817,404 | ) | 20,637,596 | 22,498,210 | ||||||||
| Preferred stock dividends | (679,106 | ) | (655,841 | ) | (1,015,025 | ) | ||||||
| Net income (loss) to common stockholders | $ | (5,496,510 | ) | $ | 19,981,755 | $ | 21,483,185 | |||||
| Weighted average shares outstanding, basic and diluted | 24,669,783 | 22,428,950 | 23,939,664 | |||||||||
| Net loss per share from continuing operations, basic & diluted | $ | (0.22 | ) | $ | (0.18 | ) | $ | (0.38 | ) | |||
| Net earnings per share from discontinued operations, basic & diluted | $ | - | $ | 1.08 | $ | 1.28 | ||||||
| Net income (loss) per share, basic & diluted | $ | (0.22 | ) | $ | 0.89 | $ | 0.90 | |||||
| SELECTED BALANCE SHEET DATA | ||||||||||||
| December 31, | ||||||||||||
| 2011 | 2010 | |||||||||||
| Cash and cash equivalents | 84,823 | 181,471 | ||||||||||
| Total current assets | 570,991 | 456,347 | ||||||||||
| Net fixed assets | 20,892,668 | 21,250,531 | ||||||||||
| Total assets | 23,166,080 | 23,418,012 | ||||||||||
| Total current liabilities | 14,272,630 | 7,713,773 | ||||||||||
| Total long-term liabilities | 2,076,119 | 8,159,196 | ||||||||||
| Total stockholders’ equity | 6,817,331 | 7,545,043 | ||||||||||