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 fourth quarter and fiscal year ended December 31, 2013.
OPERATIONAL RESULTS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
Highlights from the Company’s financial and operating results include the following:
- During 2013, GreenHunter Resources’ wholly-owned subsidiary, GreenHunter Water, experienced substantial growth by continuing to build out its Total Water Management Solutions™ portfolio of shale water products and services in the unconventional resource plays. The Company further strengthened 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 year with over 13,900 barrels per day (BBL/D) of operating permitted disposal capacity and operated a fleet of 57 vacuum trucks capable of transporting brine and condensate. Total disposal volumes increased approximately 120% in 2013 to 4.740 million barrels as compared to 2.155 million barrels disposed in 2012. 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 this year.
- In late 2013, Management committed to concentrate its future operations exclusively in the Utica Shale and Marcellus Shale formations which are located mainly in Ohio, Pennsylvania, and West Virginia as these areas represent our best opportunities for the profitable growth of our business. In connection with this commitment, we are discontinuing operations in the Eagle Ford Shale in South Texas and the Mississippian Shale in Oklahoma. All fixed assets in these areas are classified as held for sale at December 31, 2013. The financial results of these regions are reported as discontinued operations for the year ending December 31, 2013.
- Operating revenues from continuing operations were $25.7 million during 2013 compared to $16.9 million for 2012, an increase of 52%. Our loss for 2013 from continuing operations was $2.5 million for fiscal year 2013 compared to a loss of $20.4 million for 2012. Our net loss per share from continuing operations for 2013 was ($.21) per share, basic and diluted, compared to a loss of ($.83) for 2012. Our loss on discontinued operations for 2013 was $7.4 million (a loss of ($.22) per common share, basic and diluted), compared to income from discontinued operations of $2.8 million (income of $.10 per share, basic and diluted) for 2012. Our net loss per share for both continuing operations and discontinued operations, basic and diluted, was ($.43) compared to ($.73) for the years 2013 and 2012, respectively.
- The Company sold its first MAG Tank™ in 2013 and had 2013 revenue of $1.9 million related to this new product line. In late 2013, the Company raised $1.5 from a private unsecured debt placement and subsequently raised an additional $1.1 million in February 2014 for a second unsecured private debt placement with the purpose of using these funds to finance the production of MAG Tank™ inventory. The Company had contracted with two different manufacturers at year-end to fabricate MAG Tank™ panels. Management continues to see significant interest in both the purchase and rental of this new product for our energy industry customers.
- Our Form 10-K to be filed today with the SEC will report that all previously identified material weaknesses in internal controls over financial reporting were remediated as of December 31, 2013.
RECENT EVENTSIn the first quarter of 2014, the Company has sold two of its disposal wells and one permit in South Texas to two separate buyers for an aggregate purchase price of $7.3 million that included $2 million in cash and $5.3 million in notes receivable. The Company has a contract to sell the third South Texas well for $4.7 million in cash that also includes a provision to pay off $2.9 million of existing debt related to one of the wells sold earlier in the first quarter. Total cash proceeds due at the time of this closing, anticipated in mid-April, will be approximately $7.3 million. We are currently in negotiations to sell our wells and facilities located in Oklahoma and anticipate that sale to close sometime in the second quarter of 2014. We have relocated some of our remaining South Texas assets, mainly transportation related assets, to our Appalachian region. We have sold some of the South Texas transportation and construction related assets in the first quarter of 2014 and expect to sell the remaining assets in the second quarter of 2014. Once all of the assets in South Texas and Oklahoma are sold, we intent to cease operations in each of these areas.