- 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 $1.1 million in February 2014 for a second unsecured private debt placement with the purpose of using these funds to finance the production of MAG Tank™ inventory. The Company had contracted with two different manufacturers at year-end to fabricate MAG Tank™ panels. Management continues to see significant interest in both the purchase and rental of this new product for our energy industry customers.
- Our Form 10-K to be filed today with the SEC will report that all previously identified material weaknesses in internal controls over financial reporting were remediated as of December 31, 2013.
MANAGEMENT COMMENTSCommenting on GreenHunter Resources financial and operating results released today, Mr. Kirk J. Trosclair, Executive Vice President and COO, stated, “Calendar 2013 was a year of transition for GreenHunter Resources. Management made the decision to concentrate 100% of our efforts to growing our Appalachian division where we continue to receive the highest margins and greatest growth opportunities. Management has identified up to nine specific SWD projects for potential growth opportunities in 2014 for the Appalachian division. By aggressively divesting of our assets located in South Texas and Oklahoma, we are significantly improving our balance sheet and at the same time eliminating the losses we were incurring from these sub-par and underutilized assets.
|CONSOLIDATED STATEMENT OF OPERATIONS|
|For the Year Ended December 31,|
|Water disposal revenue||$||11,595,059||$||8,723,244|
|MAG Tank™ revenue||1,854,750||—|
|Storage rental revenue and other||2,723,126||1,492,673|
|OPERATING COSTS AND EXPENSES:|
|Cost of goods and services provided||18,725,258||9,421,990|
|Depreciation and accretion expense||2,884,286||1,741,737|
|Impairment of asset value, biomass project||—||15,873,013|
|Stock based compensation||1,142,066||4,367,604|
|Selling, general and administrative||7,744,912||5,633,042|
|Total costs and expenses||30,496,522||37,037,386|
|OTHER INCOME (EXPENSE):|
|Interest and other income||143,955||15,317|
|Interest, amortization and other expense||(1,011,547||)||(973,262||)|
|Gain on sale of assets||2,205,047||3,000|
|Gain on settlements of payables||951,507||403,011|
|Gain on debt extinguishment||—||204,501|
|Unrealized gain (loss) on convertible securities||—||23,857|
|Total other expense||2,288,962||(323,576||)|
|Net loss before taxes||(2,470,103||)||(20,422,990||)|
|Income tax expense||7,000||5,000|
|Loss from continuing operations||(2,477,103||)||(20,427,990||)|
|Income (loss) from discontinued operations||(7,445,397||)||(2,835,821||)|
|Preferred stock dividends||(4,587,285||)||(1,926,723||)|
|Gain on Series A Preferred Stock conversion||—||923,565|
|Deemed dividend on Series B Preferred Stock conversion||—||(2,573,025||)|
|Net loss to common stockholders||$||(14,509,785||)||$||(21,168,352||)|
|Weighted average shares outstanding, basic and diluted||33,567,431||29,082,343|
|Net loss per share from continuing operations, basic & diluted||$||(0.21||)||$||(0.83||)|
|Net earnings (loss) per share from discontinued operations, basic & diluted||$||(0.22||)||$||0.10|
|Net loss per share, basic & diluted||$||(0.43||)||$||(0.73||)|
|SELECTED BALANCE SHEET DATA|
|December 31, 2013|
|Cash and cash equivalents||1,302,857||1,765,642|
|Total current assets||10,907,674||8,457,532|
|Net fixed assets||36,992,348||41,410,231|
|Total current liabilities||20,595,245||19,605,885|
|Total long-term liabilities||9,074,148||10,139,289|
|Total stockholders’ equity||18,356,407||23,110,052|
|Loss From Continuing Operations||(2,477,103)|
|Non-Cash Stock Comp||1,142,066|
|Other Non-Cash Gains||(951,507)|