GreenHunter Resources, Inc.(NYSE MKT:GRH and GRH.PC), a diversified water resource, waste management, environmental services, and hydrocarbon marketing company specializing in the unconventional oil and natural gas shale resource plays within the Appalachian Basin, announced today financial and operating results for the twelve months ended December 31, 2014.
Financial and Operational Highlights
- Revenues increased by $1.4 million to $27.1 million in fiscal year 2014 compared to fiscal year 2013
- The Company substantially improved operating margins from revenue less direct cost of goods and services provided to 33% in 2014 from a 26% margin in 2013
- Reported positive EBITDA in 2014 of $947,716
- Generated a 32% increase in total disposal volumes from continuing operations for the twelve months ended December 31, 2014 to 3,783,656 barrels (BBL) injected compared to 2,858,188 BBL injected during the same period in 2013
- Generated a 52% increase in total internal trucking hours from continuing operations for the twelve months ended December 31, 2014 to 70,915 hours compared to 46,785 hours in the same period in 2013. Also, generated a 50% increase in internal trucking revenue during the same periods for 2014 and 2013 of $7.5 million compared to $5 million, respectively
- Entered into a senior secured financing agreement on April 15, 2015 to borrow up to $16 million of new money for capital projects including the completion of the Mills Hunter Facility pipeline to connect up to six disposal wells to our current offloading facility, essentially doubling the Company’s current disposal capacity to approximately 32,000 barrels per day. Additionally, the funds will be used to acquire 10 new DOT rated 407 trucks/trailers to be added to our existing fleet of 37 trucks and the build-out of our barge receiving terminal at our Mills Hunter Facility. Additionally, the development of other barging terminals along the Ohio River that will be used to receive oil-field wastewater for barging to the Mills Hunter Facility.
OPERATIONAL RESULTS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2014
Revenue from continuing operations increased 5% to $27.1 million for the year ended December 31, 2014 compared to $25.7 million for the year ended December 31, 2013. Direct cost of goods and services provided decreased 5% to $18.2 million for the year ended December 31, 2014 from $19.2 million for the year ended December 31, 2013. Loss from continuing operations increased 32% to $7.3 million 2014 compared to $3.3 million in 2013, mainly due to increases in non-cash stock compensation and depreciation.
Our net loss per share for both continuing operations and discontinued operations, basic and diluted, was ($.33) compared to ($.43) for the twelve months ending December 31, 2014 and 2013, respectively. Our loss from continuing operations was $7.3 million for the twelve months ending December 31, 2014 compared to a loss of $3.3 million for the same period in 2013. Our net loss per share from continuing operations was ($.35) per share and ($.23) per share, basic and diluted, for the twelve months ending December 31, 2014 and 2013, respectively. Our income from discontinued operations was $591 thousand (earnings of $.02 per common share, basic and diluted) compared to a loss from discontinued operations of $6.6 million (loss of ($.20) per share, basic and diluted) for the twelve months ending December 31, 2014 and 2013, respectively.
ADDITIONAL COMMENTS AND HIGHLIGHTS
- The Company’s Mills Hunter Facility (4 new SWD wells) located in Meigs County, Ohio is nearing completion with the interconnecting pipeline to a centralized facility in the final stages of construction.
- As of October 24, 2014, the Company’s $150 million Universal Shelf Registration Statement became effective with the Securities & Exchange Commission. The Company has received over $2.9 million in net proceeds from a combination of the sale of common stock in late 2014 and during the first quarter of 2015 as well as debt which was converted to equity.
MANAGEMENT COMMENTS
Commenting on GreenHunter Resources financial and operating results released today, Mr. Kirk J. Trosclair, Executive Vice President and COO, stated, “Fiscal 2014, combined with our recent accomplishments, have paved the way for visible growth opportunities at GreenHunter Resources. We’re nearing completion of four new SWD wells at our Millis Hunter Facility. We are proceeding ahead with our plans to barge oil-field waste-water along the Ohio waterway and plan to begin development of our first barge receiving terminal this quarter. We are hopeful that this terminal will be complete and in service before year-end with additional water based terminals to follow.”
Trosclair continued, “At the same time, requests for new proposals on our proprietary MAGTank storage division have been steadily increasing. Contracted disposal volumes, a positive indicator of long-term demand strength, allowed for a 16 percent increase in water disposal revenues this year. These accomplishments, combined with our non-dilutive financing agreement executed today, provide the capital and growth opportunities required to take GreenHunter Resources to the next level.”
Trosclair concluded, “It’s no secret that the current pullback in commodities prices has stirred concern within the energy industry. Many oilfield service companies have had to closely examine their operations as E&P operators have significantly reduced capital expenditure budgets in 2015. That said, demand for water disposal services at GreenHunter Resources remains strong. We continue to operate near full capacity as E&P companies understand that water disposal services and fluids management decisions, regardless of commodity prices, are critical to ensure that a producing well is never shut-in.”
| UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS | ||
| For the Year Ended December 31, | ||
| 2014 | 2013 | |
| REVENUES: | ||
| Water disposal revenue | $ 13,493,770 | $ 11,595,059 |
| Transportation revenue | 10,868,985 | 9,564,522 |
| Environmental services revenue | 243,837 | — |
| MAG Tank(TM) revenue | 1,066,142 | 1,854,750 |
| Skim oil revenue | 803,046 | 1,050,784 |
| Storage rental revenue and other | 645,858 | 1,672,342 |
| Total revenues | 27,121,638 | 25,737,457 |
| COST OF GOODS AND SERVICES PROVIDED: | ||
| Direct cost of goods and services provided | 18,281,974 | 19,180,338 |
| Depreciation and accretion expense | 3,197,045 | 2,884,286 |
| Selling, general and administrative | 12,141,278 | 8,423,327 |
| (Gain) loss on sale of assets | 86,370 | (2,205,047) |
| Gain on settlements | (585,640) | (152,113) |
| Total costs and expenses | 33,121,027 | 28,130,791 |
| OPERATING LOSS | (5,999,389) | (2,393,334) |
| OTHER INCOME (EXPENSE): | ||
| Interest and other income | 96,366 | 92,702 |
| Interest expense | (1,435,037) | (1,011,547) |
| Total other income | (1,338,671) | (918,845) |
| Net loss before taxes | (7,338,060) | (3,312,179) |
| Income tax expense | 8,000 | 7,000 |
| Loss from continuing operations | (7,346,060) | (3,319,179) |
| Income (loss) from discontinued operations | 591,256 | (6,603,321) |
| Net loss | (6,754,804) | (9,922,500) |
| Preferred stock dividends | (4,969,060) | (4,587,285) |
| Net loss to common stockholders | $ (11,723,864) | $ (14,509,785) |
| Weighted average shares outstanding, basic and diluted | 34,997,890 | 33,567,431 |
| Net loss per share from continuing operations, basic & diluted | $ (0.35) | $ (0.23) |
| Net income (loss) per share from discontinued operations, basic & diluted | $ 0.02 | $ (0.20) |
| Net loss per share, basic & diluted | $ (0.33) | $ (0.43) |
| SELECTED BALANCE SHEET DATA (UNAUDITED) | ||
| December 31, 2014 | December 31, 2013 | |
| Cash and cash equivalents | $ 396,279 | $ 1,302,857 |
| Total current assets | 7,333,425 | 10,907,674 |
| Net property and equipment | 27,100,279 | 36,992,348 |
| Total assets | 34,452,857 | 48,025,800 |
| Total current liabilities | 17,554,428 | 20,595,245 |
| Total non-current liabilities | 6,948,150 | 9,074,148 |
| Total stockholders’ equity | 9,950,279 | 18,356,407 |
Non-GAAP Financial Measures
This release contains certain financial measures that are non-GAAP measures. We have provided reconciliations within this release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, measures for financial performance prepared in accordance with GAAP that are presented in this release.
GreenHunter defines adjusted EBITDA as reported net income (loss) from continuing operations, plus income taxes, interest expense, depreciation and accretion expense and non-recurring and non-cash items which include other non-cash (gains) losses and non-cash stock compensation expense.
Management believes these non-GAAP financial measures facilitate evaluation of the Company’s business on a “normalized” or recurring basis and without giving effect to certain non-cash expenses and other items, thereby providing management, investors and analysts with comparative information for evaluating the Company. The Company’s method for defining adjusted EBITDA may not be consistent with other companies’.
The reconciliation of unaudited adjusted EBITDA from continuing operations as compared to GreenHunter Resources GAAP loss from continuing operations for the years ended December 31, 2014 and 2013 is as follows:
| 2014 | 2013 | |
| Loss from continuing operations | $(7,346,060) | $(3,319,179) |
| Income tax | 8,000 | 7,000 |
| Interest expense | 1,435,037 | 1,011,547 |
| Depreciation and accretion expense | 3,197,045 | 2,884,286 |
| Other non-cash (gains) losses | (585,640) | (152,113) |
| Non-cash stock compensation | 4,239,334 | 1,142,066 |
| EBITDA | $947,716 | $1,573,607 |
About GreenHunter Resources, Inc.
GreenHunter Resources, Inc., through its wholly-owned subsidiaries, GreenHunter Water, LLC and GreenHunter Environmental Solutions, LLC, provides Total Water Management Solutions(R)/Oilfield Fluid Management Solutions(TM) in the oilfield and its shale plays of the Appalachian Basin. GreenHunter Water continues to expand its services package by increasing down-hole injection capacity with Class II salt water disposal wells and facilities, with the launch of next-generation modular above-ground frac water storage tanks (MAG Tank(R)), and with advanced water hauling — including a growing fleet of DOT rated 407 trucks, for hauling condensates and water with the presence of condensates. GreenHunter Water has also spearheaded the movement to barge brine water, as barging is a safer and more cost-effective mode of transport than trucking or rail.
GreenHunter Environmental Solutions, LLC offers onsite environmental solutions at the well pad and facilities, with a service package that includes tank and rig cleaning, liquid and solid waste removal/remediation, solidification, and spill response. An understanding that an interconnected suite of services is key to E&P waste stream management shapes GreenHunter Resources’ comprehensive end-to-end approach to services.
GreenHunter Hydrocarbons, LLC offers transportation of hydrocarbons (oil, condensate, and NGLs) and will soon offer storage, processing, and marketing of hydrocarbons (oil, condensate, and NGLs) in the Appalachian region, leveraging off of our existing asset base and infrastructure, which includes up to six different barge terminal locations, presently owned or leased by GreenHunter Resources.
For a visual animation of the Class II Salt Water Disposal well development and completion technique that is being utilized in GreenHunter Water’s Appalachia SWD program, navigate to the video by clicking on “Salt Water Disposal Animation” button on the Operations tab at GreenHunterEnergy.com or click 1.
Additional information about GreenHunter Water may be found at www.GreenHunterWater.com
