GreenHunter Energy, Inc. (NYSE Amex: GRH) Hydrofracking in Oil and Gas Industry Presents Expanding Opportunity for Water Resources

GreenHunter Energy, Inc. (NYSE Amex: GRH) 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.

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.

GreenHunter Energy, Inc.

Jonathan D. Hoopes President & COO
1048 Texan Trail Grapevine, TX 76051
Tel: (972) 410-1044
Email: jhoopes@greenhunterenergy.com
Website: http://www.greenhunterenergy.com/

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.

 

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