I wanted to give you a first look at our Newest Profile Company, GreenHunter Energy, Inc. (NYSE Amex: GRH)
This weekend we will have more on the Company. I have been honored to meet with Gary C. Evans, the CEO, and he is one of the most successful out there.
Here is his profile on FORBES.COM – SEE IT HERE
Watch for more all weekend long on GreenHunter!
GreenHunter Energy, Inc. (NYSE Amex: GRH) is a diversified renewable energy company focused on water resource management, biomass power generation, wind and solar energy projects.
GreenHunter Energy’s Board of Directors and senior management made a decision earlier this year to strategically change the corporate direction to concentrate specifically on water resources management directly related to the oil and natural gas industry.
Focus on Water Needs for Oil and Gas Industry: The significant development presently ongoing in the unconventional resource plays located in the United States, and the ever-increasing needs for water to perform fracture stimulation activities, provides a significant market opportunity for the company.
Seasoned Management: GreenHunter Energy’s management is well-seasoned in the oil field with decades of experience and strong relationships in the exploration and production industry which the company plans to leverage to be a significant player within this growing business segment of water management services.
Closed on Private Placement: In late June, GreeenHunter Energy closed a private placement. Proceeds from this offering will be used for general corporate purposes and to partially fund three separate acquisitions that are planned in the water resource management space.
Water Resource Management Focus
GreenHunter’s commercial focus is specifically on water resources management directly related to the oil and gas industry.
Recent improvements in drilling and completion technologies have unlocked large reserves of hydrocarbons in multiple unconventional resources plays in North America. These new drilling methods often involve a procedure called hydraulic fracturing or hydrofracking. This process involves the injection of large amounts of water, sand and chemicals under high pressures into rock formations to create and prop open fissures to stimulate the production of oil and natural gas. According to the American Petroleum Institute, more than 1 million wells have been safely fracked in the United States during the last 60 years.
Unconventional wells can require more than four million gallons of water to complete a hydrofracking procedure. The Environmental Protection Agency estimates that 70 to 140 billion gallons of water are pumped into 35,000 fracking wells every year. According to other industry sources, the number of fracking wells exceeds 50,000 annually. Because a portion of the water that is used in the hydrofracking process will return to the surface as a by-product or waste stream (commonly referred to by oil and gas operators as frack-flowback), industry procedures for the containment, treatment, transportation, reuse and disposal of these fluids have become well-established.
In addition to frack-flowback, oil and natural gas wells also generate produced salt water or brine which is water from underground formations that is brought to the surface during the normal course of oil or gas production. Because the produced water has been in contact with hydrocarbon-bearing formations, it contains some of the chemical characteristics of the formations and the hydrocarbons. Produced water is the largest volume by-product or waste stream associated with oil and gas exploration and production. Estimates from the U.S. Department of Energy’s National Energy Technology Laboratory (NETL) suggest that the total volume of produced water generated by U.S. onshore and offshore oil and gas production activities is over 20 billion barrels or 882 billion gallons (1 barrel equals 42 U.S.gallons).
While produced water (also known as oil field brine or brine due to its high salinity content) can be reused if certain water quality conditions are met, approximately 95 percent of U.S. onshore produced water generated by the oil and gas industry is disposed of by using high-pressure pumps to inject the water into under-ground geologic formations or is discharged under National Pollutant Discharge Elimination System (NPDES) permits. The remaining 5 percent is managed through beneficial reuse or disposed through other methods including evaporation, percolation pits, and publicly owned treatment works.
Federal, state and local legislation is emerging as a result of the considerable focus that is being directed to the exploitation of North America’s abundant reserves of shale oil and natural gas. New legislation and regulatory initiatives relating to hydraulic fracturing are expected to result in increased costs and additional operating restrictions for oil and gas explorers and producers.
Management Negotiations for Three Acquisitions
GreenHunter management is in negotiations for three separate acquisitions and development projects in the water resource business as relates specifically to the unconventional shale resource plays.
The three unconventional shale plays on which GreenHunter Energy is focused are:
- The Marcellus Shale in the Appalachian Basin
- The Eagle Ford Shale in South Texas
- The Bakken Shale in North Dakota, Montana and Southern Saskatchewan
To rebuild GreenHunter as a water resource services provider in the oil field, company management is looking to acquire and develop water treatment and water disposal facilities.
GreenHunter management is also in negotiations for partnerships, licensing agreements and joint ventures with providers of and owners of water treatment and water recycling systems and patent holders.
Because a significant business opportunity also exists in the proper handling and transportation of produced brine, frack-flowback and drilling mud, GreenHunter is planning to incorporate advanced logistics and asset management systems to help oil and gas operators reduce their total water resource management costs.
Financing in Place
A portion of GreenHunter Energy’s water resource management business plan for the next twelve months has been funded from a private placement offering completed in June. An additional $500 thousand in proceeds are scheduled to be received in September 2011 from the sale of the Company’s Ocotillo wind project.
The Company announced the closing of a non-brokered private placement of 522,500 Units of GreenHunter Energy, Inc. at a price of $2.00 per unit, for aggregate gross proceeds of $1,045,000, on June 21, 2011.
Additionally, as part of this offering, GreenHunter’s largest institutional shareholder, West Coast Opportunity Fund, LLC, elected to convert 772.5 shares of its 2007 Series A 8% Convertible Preferred Stock and 772.5 shares of its 2008 Series B Convertible Preferred Stock into 772,500 Units of GreenHunter Energy pursuant to the terms of the offering. In conjunction with this closing, GreenHunter’s Chairman and Chief Executive Officer, Gary C. Evans, also elected to convert $500,000 due under an existing promissory note to him into the equivalent Units (250,000 Units) of GreenHunter Energy pursuant to the terms of the offering.
The securities comprising the Units issued under the private placement were issued pursuant to exemptions from the prospectus requirements of applicable securities laws and are subject to resale restrictions prescribed under applicable securities laws including a six month holding period.
GreenHunter’s plan is to acquire and operate assets in the renewable energy sectors of biomass, geothermal, solar, wind, and water management. GreenHunter currently has ongoing business initiatives in biomass through Mesquite Lake, LLC.
Mesquite Lake Resource Recovery Plant
GreenHunter Energy’s other active development project is the Mesquite Lake Resource Recovery Plant (“Mesquite Lake”). Mesquite Lake is an 18.5 MW waste-to-energy facility located in El Centro, California.
This Imperial County facility was originally built in 1989 at a cost of approximately $68 million to process cow manure into power and operated until December 1994, when its Power Purchase Agreement (“PPA”) was repurchased by Southern California Edison. Currently, Mesquite Lake is not generating electricity.
Mesquite Lake Fundamentals
- Asset acquired for $7.2 million.
- Plant refurbishment activities commenced during 2008.
- 20 year power purchase agreement executed in place with a major utility.
- Transmission interconnect agreement in place.
- Air permit in place.
When complete, the project is expected to burn more than 280,000 tons of waste woody biomass which will be converted into green electricity to serve residential users in California’s Imperial Valley through GreenHunter’s power purchase agreement with Imperial Irrigation District (IID).
Mesquite Lake is located in a region that the U.S. Bureau of Labor Statistics registers as having the highest unemployment rate in the United States of 27.3 percent, and the Imperial Valley Economic Development Corporation estimates that approximately 642 jobs will be directly or indirectly created as a result of the project development.
Solar Energy Potential at Mesquite Lake Facility
GreenHunter’s Mesquite Lake biomass facility is located on a 40-acre parcel of which 30 acres could be utilized for the biomass operation leaving 10 to 15 acres for the development of additional renewable energy projects. According to the National Renewable Energy Laboratory (NREL), average annual irradiance per square meter in the Imperial County is 6.23 kilowatt hours per day.
During the first quarter of 2010, GreenHunter formed a new subsidiary to explore the development of a solar energy farm on GreenHunter’s Mesquite Lake project site and completed a generator interconnection request with the Imperial Irrigation District (IID). On March 16, 2010 GreenHunter were notified that IID had preserved an interconnection queue position for GreenHunter’s solar project, subject to regulatory and permitting approvals.
GreenHunter believes there are unique economic and operational advantages to building a solar farm on this site most significant being the ability to share existing interconnection infrastructure with the biomass facility.
Strong Management History in Oil and Gas Industry
Management, which has a significant background in the oil and gas industry, has identified water reuse and water management opportunities in the energy industry as a significant growth opportunity and is exploring various ways to reposition the Company to serve this growing segment through joint ventures, targeted acquisitions, development and deployment of water resource management technologies, and services including underground injection for disposal, evaporation, pre-treatment of water for underground injection for increasing oil recovery, off site commercial disposal, on site remediation and beneficial reuse.
Gary C. Evans – Chairman and Chief Executive Officer
Gary C. Evans presently serves as Chairman of the Board and Chief Executive Officer of Magnum Hunter Resources Corporation (NYSE “MHR”), a Houston based oil and gas exploration and production company specializing in unconventional resource plays in North America; he has held that position since May 2009.
Mr. Evans previously founded and served as the Chairman and Chief Executive Officer of Magnum Hunter Resources Inc. (MHRI), a NYSE listed company, for twenty years before selling MHRI to Cimarex Energy for approximately $2.2 billion in June 2005. In 2005, Mr. Evans formed Wind Hunter Energy, LLC, a renewable energy company which was subsequently acquired in December 2006 by GreenHunter Energy, Inc.; a (NYSE Amex “GRH”) listed renewable energy company focusing on biomass power, wind, solar, and clean water technologies.
Mr. Evans has served as Chairman and Chief Executive Officer of GreenHunter Energy, Inc. since December 2006. Mr. Evans serves as an Individual Trustee of TEL Offshore Trust, a NASDAQ listed oil and gas trust, and is the Director of Novavax Inc., a NASDAQ listed clinical-stage vaccine biotechnology company. Mr. Evans was recognized by Ernst and Young as the Southwest Area 2004 Entrepreneur of the Year for the Energy Sector and was subsequently inducted into the World Hall of Fame for Ernst & Young Entrepreneurs. Mr. Evans also serves on the Board of the Maguire Energy Institute at Southern Methodist University.
Jonathan Hoopes – President, Chief operating Officer and Director
Jonathan Hoopes has served as President and Chief Operating Officer of the Company since October 2009.
Mr. Hoopes has been an active participant in the energy and technology landscape for more than 20 years. His industry experience includes leadership roles in strategy, manufacturing, international sales and distribution, equity research and asset valuation, debt and equity capital markets underwriting and syndication, sales and trading and financial management at leading multinational corporations including Bechtel, Citibank, Deutsche Bank, Goldman Sachs, PaineWebber and UBS. Mr. Hoopes has been exclusively focused on issues involving alternative energy since 2007 and he has developed an extensive network of relationships with senior management teams of leading companies and institutional investors in various energy technology industries.
Mr. Hoopes earned a MBA from Wharton in International Finance, a MA in Asian Studies from the University of Pennsylvania and a BS in Finance from Brigham Young University. In addition to English, Mr. Hoopes also speaks Cantonese and Mandarin.
Ronald H. Walker – Director
Ronald H. Walker has been a director of the company since November 1, 2007. Prior to his retirement in 2001, Mr. Walker was a senior partner with Korn/Ferry International, the world’s largest executive search firm, for over 20 years. At Korn/Ferry, Mr. Walker’s client base included the Fortune 100 companies. Mr. Walker’s extensive record of government service includes Special Assistant to the President of the United States from 1969 to 1972, where he was the founder and first director of the White House Advance Office. In this position, he was responsible for planning and coordinating all Presidential travel both domestic and international. Those visits included all 50 states and 25 countries. He personally directed the preparations for the President’s historic trips to the People’s Republic of China and Russia.
President Nixon appointed Mr. Walker the 8th Director of the National Park Service in December 1972, where he served until 1975. In this position, he was charged with the preservation and care of the country’s 300 National Park System areas encompassing 300 million acres of land. He administered a budget of $350 million and managed 15,000 employees who served the 230 million people that visit America’s park lands annually.
Mr. Walker previously served as a consultant to the White House Personnel Office. He has also served as a senior advisor to four Presidents and on Special Diplomatic assignments abroad. In addition, he has served as a senior advisor to nine Republican Conventions, highlighted by his Chairmanship and position of CEO of the 1984 Republican National Convention held in Dallas,Texas. At the request of President Ronald Reagan, he also chaired the 50th Presidential Inauguration.
Mr. Walker has served on numerous boards, both public and private, including being a public-sector member of the United States Olympic Committee (USOC), the National Collegiate Athletic Association (NCAA), Kennedy Center, Vice Chair of the President’s Council on Physical Fitness and Sports, past chairman of the Freedoms Foundation at Valley Forge, the National Park Foundation, Grand Teton National Park Foundation, Ford’s Theatre, and Vice Chairman of the Bicentennial of the U.S. Constitution.
Mr. Walker is a distinguished graduate from the University of Arizon awith a BA in Government and American History. He also served in the U.S. Army, reaching the rank of captain.
Ronald D. Ormand – Director
Mr. Ormand has been a Director of the Company since June 2009 and has over twenty-five years of investment and commercial banking experience in the energy industry. Mr. Ormand currently serves as Executive Vice President, Chief Financial Officer and Board Member of Magnum Hunter Resources, Inc.
Mr. Ormand is a previous member of the Board of Directors of Tremisis Energy Acquisition Corporation II, an NYSE Amex listed company. Mr. Ormand has over 25 years of energy investment banking experience with CIBC as Managing Director and Head of CIBC World U.S. Oil and Gas Investment Banking Group, as a member of U.S. Investment Banking Management Committee and as Managing Director and Head of Oil and Gas Investment Banking for the Americas with West LB, a German-based international bank.
Mr. Ormand received a B.A. and an M.B.A. from UCLA and attended Cambridge University where he studied Economics.
Morgan F. Johnston – Senior Vice President, General Counsel and Secretary
Morgan F. Johnston has served as Senior Vice President, General Counsel and Secretary of the Company since March 1, 2007.
From June of 2005 until March 1, 2007, Mr. Johnston was a sole practitioner representing clients in corporate and securities law. He served as the Senior Vice President, General Counsel and Secretary of Magnum Hunter Resources, Inc., an NYSE-listed company, from January 1, 2003 to June of 2005. He previously served as MHR’s Vice President and General Counsel since April 1997 and also served as MHR’s Secretary since May 1, 1996.
Mr. Johnston was in private practice as a sole practitioner from May 1, 1996 to April 1, 1997, specializing in corporate and securities law. From February 1994 to May 1996, Mr. Johnston served as general counsel for Millennia, Inc. and Digital Communications Technology Corporation, two American Stock Exchange-listed companies. He also previously served as Securities Counsel for Motel 6 L.P., an NYSE-listed company. Mr. Johnston graduated cum laude from Texas Tech Law School in May 1986 and was also a member of the Texas Tech Law Review. He is licensed to practice law in the State of Texas.
David S. Krueger – Vice President and Chief Financial Officer
David S. Krueger has served as Vice President and Chief Financial Officer of the GreenHunter since May 2006.
From June 2005 to May 2006, Mr. Krueger was Vice President and Chief Financial Officer for Sulphur River Exploration, Inc. in Dallas,Texas.
Mr. Krueger served as Vice President and Chief Accounting Officer of Magnum Hunter Resources, Inc. from January 1997 to June 2005. Mr. Krueger acted as Vice President-Finance of Cimarron Gas Holding Co., a gas processing and natural gas liquids marketing company in Tulsa,Oklahoma, from April 1992 until January 1997. Mr. Krueger served as Vice President/Controller of American Central Gas Companies, Inc., a gas gathering, processing and marketing company from May 1988 until April 1992. From 1974 to 1986, Mr. Krueger served in various managerial capacities for Southland Energy Corporation.
Mr. Krueger, a certified public accountant, graduated from the University of Arkansas with a bachelor’s degree in Business Administration and earned his M.B.A. from the University of Tulsa.
GreenHunter Energy, Inc.
Jonathan D. Hoopes President & COO
1048 Texan Trail Grapevine, TX 76051
Tel: (972) 410-1044
Any statements in this release regarding 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.
GRH Disclosure: StockGuru entered into an investor relations consulting and market awareness contract with GreenHunter Energy. We hold not shares and will not be receiving any shares. To avoid all potential conflicts of interest, we never sell shares into the open market during an active market awareness or investor relations program. This means that as we release new information about a particular client company either on our site or otherwise authored by us, you can be confident we are not selling shares at the same time. StockGuru is not a registered investment adviser or a broker/dealer. StockGuru makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person, or that an investment in such securities will be profitable. The Company will compensate us three thousand dollars monthly in cash and four thousand two hundred dollars in 144 restricted shares based on the volume weighted average share price for the last five days of each month. Initially, we have been funded the first cash payment and are due the first five thousand shares of this contract as we begin our coverage on July 19, 2011. StockGuru – 1601 Berwick Drive – McKinney, Texas 75070 – (469) 252-3031.