In the summer of 2005, Gary Evans was facing a conundrum.

He had just sold Magnum Hunter Resources, the successful oil and gas exploration and production firm that he had founded and taken public, to Cimarex Energy ( XEC) for $2.2 billion. As part of that transaction, Evans signed a two-year noncompete agreement, which effectively barred him from working in the business that he had been involved in for nearly 20 years.

Evans is an entrepreneur who is skilled at sniffing out opportunities. Thus, it was no surprise when he decided that his next business venture would be in China.

He first started Global Hunter Securities, an investment bank, sales, trading and research firm dedicated to taking Chinese companies public.

China's monumental thirst for energy in all forms planted another seed in Evans' head, and soon thereafter he started GreenHunter ( GRH), which he planned to turn into the world's first publicly traded portfolio of renewable energy assets.

That vision was achieved on Jan. 2, when shares of GreenHunter began trading on the American Stock Exchange. GreenHunter's shares were valued at $12 at its IPO, and it now trades at $17.

GreenHunter's current portfolio includes a biodiesel refinery in the Houston ship channel, a manure-to-energy facility in El Centro, Calif., and six wind-farm projects in the western U.S.

TheStreet.com recently spoke with Evans about a variety of topics, and here's what he had to say.

TSC: What was it like to change your focus from oil and gas to renewable energy?

Evans: The switch wasn't difficult because we brought over the same financial model that we used at Magnum Hunter. At Magnum Hunter, we bought distressed assets on the cheap. We are using the same philosophy here. We don't want to be the first owner of an asset, because those assets tend to be expensive. We want to be the second or third owner.

When we bought the refinery in the Houston ship channel, the sellers had no idea that we were going to convert it into a biodiesel refinery. That facility will be capable of producing biodiesel at 50 cents a gallon. The rest of the market makes biodiesel for $1.25 a gallon.

In order to get into wind at a low price point, we spent $10 million for a piece of the Chinese wind turbine manufacturer Ming Yang. That deal gives us the preferential right to buy any turbines that Ming Yang exports to North America. We'll have access to turbines for a lower price than our competitors.

Also, at Magnum Hunter we invested vertically in order to manage things from the wellhead to the buyer. We are doing the same thing with GreenHunter. For example, when we go into the ethanol business, we want to own everything from the feedstock to the distribution terminals. That way we won't shed our profit margins to any middlemen.

Lastly, a lot of the people who worked for Magnum Hunter left to come work at GreenHunter. Thus, we have a close-knit and experienced team. That also shows that our team has faith that our new project will work.

TSC: What other types of assets do you envision for your portfolio?

Evans: Aside from the ones already mentioned, we're looking at solar, geothermal and hydroelectric. We are not interested in "clean coal" because we don't consider coal to be a renewable resource.

In the solar space, we are only interested in the commercial-scale business. We aren't interested in putting solar panels on people's houses. Also, we're not interested in corn ethanol, although we are very interested in sugar-based ethanol.

TSC: What are the main differences between GreenHunter's business model and other renewable energy portfolios that are receiving venture capital financing?

Evans: First, we are not an R&D shop. We will only invest in technologies that are proven to work profitably. Second, we want our company to be valued on cash flow and earnings before interest, taxes, depreciation and amortization, and not on the potential future value of our technologies. Third, we will not enter a space that relies on government subsidies for profitability. Right now we receive a $1-a-gallon subsidy for our biodiesel. That is great, but our model doesn't need it to remain lucrative.

TSC: What makes GreenHunter's stock an attractive buy for investors?

Evans: All three of our current business lines will generate revenue in 2008, and we project that we'll generate $1 billion in revenues in 2009.

Insiders own 70% of the outstanding shares of the company, which indicates that they believe that the company will succeed. GreenHunter's management is already rich, so we're not in the business to make a quick buck. I think that GreenHunter's market cap will exceed that of Magnum Hunter in three years.

We currently have a limited float because we want people to understand our story before we make a larger equity offering. However, because of our success with Magnum Hunter, we've had no problems raising capital for GreenHunter, and we are completely funded for everything we want to do in 2008.

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