Investor Presentation. NYSE MKT:GRH, GRH.PC

Transcription

1 Investor Presentation

2 SAFE HARBOR DISCLOSURE This presentation includes or incorporates by reference statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements include, but are not limited to, information or assumptions about revenues, gross profit, expenses, income, capital and other expenditures, financial plans, capital structure, cash flow, liquidity, management's plans, goals and objectives for future operations and growth. In some cases, you can identify forward-looking statements by the use of words such as may, could, expect, intend, plan, seek, anticipate, believe, estimate, predict, potential, continue, or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, levels of activity, performance or achievements. 2

3 Company Overview NYSE LISTED Market Cap. (03/03/2015) Shares Outstanding Public Float Insider Ownership 54% GRH, GRH.PC $25 Million 35.4 Million Million Premier Total Water Management Solutions Company Water Disposal, Storage, Transport, & Treatment Services Marcellus/Utica Pure Play Agnostic to Commodity Price Volatility Significant Insider Ownership of management aligns with shareholder interest Began Operations in 2011 Appalachian Region 10 SWD Wells/Facilities in Operation 5 New SWD Wells in Progress 38 Vacuum/Condensate Trucks Storage Terminals/Barging on Navigable Waterways MAG Tank Sales/Rentals Frac-Cycle Environmental Services 3

4 Investment Highlights Increase in Utilization Rates within GRH Trucking Operations Significant Increase in Total Disposal Capacity staring Q ,000,000 6,000,000 5,000,000 4,000,000 Disposal Volumes Diversified Revenue Growth per Year with Expanding Client Base 3,000,000 2,000,000 1,000,000 Continued Improvement in Operating Margins E 2015E 4

5 Appalachia E&P Operators Company Net Acres Existing Customer Chesapeake 587,000 Yes No Southwestern 413,000 Yes No Anadarko 267,000 Yes No Range 190,000 Yes No Hess 185,000 Yes No Gulfport 147,350 Yes No Halcon 142,000 Yes No Rice 136,500 Yes No Triad Hunter 118,000 Yes No Antero 104,000 Yes No Consol 80,000 Yes No ExxonMobil / XTO 75,000 Yes No PDC Energy 48,000 Yes No Eureka Hunter N/A Yes No 5

6 Percent Revenue by Client Diverse Client Base consisting of Major, Large-Cap, Mid-Cap and Small Cap Operators Clients use GreenHunter services for a variety of reasons ranging from water disposal, transport, storage and treatment GreenHunter's clients have access to all of their fluid management needs under one roof which facilitates crossselling opportunities Customer A Customer B Customer C Customer D Customer E Customer F Customer G Customer H Customer I Triad Hunter 2014 Revenue Percentage by Customer Other 2.54% 2.79% 3.73% 5.21% 5.82% 6.80% 8.40% 11.75% 13.00% 17.36% 18.66% 0.00% 5.00% 10.00% 15.00% 20.00% 6

7 Client List NYSE MKT:GRH, GRH.PC 7

8 Highest Margin Plays GreenHunter is located in 4 of the 6 top IRR plays for E&P operators in the U.S. Utica Condensate 70% IRR Utica Wet Gas 61% IRR Marcellus - SW Liquids Rich 60% Marcellus Super Rich 51% Credit Suisse Energy in 2015 Report 8

9 Service Requirements of E&P Operators GreenHunter Water Disposal & Transportation SWD, Trucking & Barging Environmental Solutions Treatment & Storage MAG Tank, FracCycle, Equipment Rental, Spill Response GreenHunter Hydrocarbons Condensate Transport, Stabilization, Marketing & Splitter GreenHunter Pipeline Brine, Freshwater & Condensate 9

10 Competitive Advantage Close proximity of SWD wells to active development programs Significant market share in the Appalachian region Unique access to low-cost conversion wells throughout the region U.S. Coast Guard approval provides alternative low-cost transportation via barge along the Ohio waterways Management team with more than 100 years combined energy industry experience Hub and spoke logistics network 10

11 Wastewater and SWDs Class II Wells Saltwater is a naturally occurring by-product of oil and gas operations Flowback water is wastewater that returns to the surface within the first few weeks after fracking a well Produced water is formation water that is generated throughout the life of the well Class II Salt Water Disposal (SWD) wells are an EPA preferred method for disposal of oil and gas wastewater. 11

12 Safety Top-rated service company with superior transportation safety record each year Highest safety ratings from IS Networld GreenHunter Water has been enthusiastically approved by most of the largest E&P companies in oil and gas, through safety audits conducted by qualified personnel from such companies as Chevron, CONSOL, Statoil, XTO, Antero, Stone, Gulfport, AEP and more 12

13 GreenHunter Water 13

14 SWD Wells Drive Growth 15 permitted SWD wells in the most prolific natural gas basins in the U.S. running at > 100% utilization SWD wells agnostic to commodity price volatility. Creates win-win scenario for GreenHunter in good times or bad Balanced portfolio of produced and flow-back water Daily Injection Capacity (BBLs/Day) 35,000 30,000 25,000 20,000 15,000 10,000 Multiple new locations in process due to increased customer 5,000 demand E 14

15 In-House Trucking Efficiencies Fleet of state-of-the-art 407/vacuum trucks for water and hydrocarbon transport Access to 3 rd party fleets as required Continued reduction in 3 rd -party charges drives margin growth Average fleet age is less than 3 years old Capacity to dispatch more than 100 truck trips each day $2,500,000 $2,000,000 $1,500,000 $1,000,000 EBITDA vs 3 RD Party Trucking $500,000 $0 -$500,000 Q Q Q Q TRANSPORTATION $1,565,975 $1,912,344 $2,152,795 $1,877,488 TRANSPORTATION- THIRD PARTY $1,868,519 $908,852 $290,068 $292,944 OPERATING INCOME (LOSS) -$293,465 $238,232 $1,007,849 $731,058 15

16 Barge Transportation U.S. Coast Guard approval to transport oilfield waste Each 10,000 barrel barge unit reduces approximately 600 hours of trucking $4.00 $3.50 $3.00 $2.50 $2.00 Per BBL Cost Barging vs. Trucking Per BBL cost per barge = $0.76 vs. per BBL trucking cost of $1.03 (based upon GRH case study) Strategic locations along the Ohio River $1.50 $1.00 $0.50 Assumptions: 100 $-BBL Truck vs. 30,000 BBL Barge Transportation time for barging only 20 Miles 40 Miles 60 Miles 80 Miles 100 Miles 120 Miles Est. Truck Cost /BBL Est. Barge Cost /BBL 16

17 GreenHunter Environmental 17

18 MAG Tank Modular Above Ground Tank 10,000 BBL to unlimited size and scope. Expandable Capacities for Water Storage Flexible footprint using standardized panels allow for non-traditional configurations Recent deployment to major oil company Operators can save up to ~85% in barrel storage cost Significantly reduces storage cost for the operator, reduced truck traffic, minimal site disturbance, expedited set-up and take-down times compared to frac tanks and pits Inverting MAG Panels 65,000 BBLs 75,000 BBLs 18

19 Equipment Rental & Spill Response Provides equipment and tank rental services to the oil and natural gas industry Tank rentals range from 500 BBL Frac Tanks to unlimited size specifications Recognized as one of the industry s most professional and environmentally conscious service providers Can handle clean up of oilfield waste and non-hazardous spills 19

20 Frac-Cycle Oilfield water recycling and reuse system Proprietary membrane filtration system suited for produced and flowback water Two new towers at Wheeling and one at New Matamoras require ~$1 MM investment, yields additional $4 MM of EBITDA per year Frac-Cycle allows for the removal of dissolved solids and suspended solids 20

21 GreenHunter Hydrobarbons 21

22 Transport, Stabilization, Refining & Marketing State-of-the-art 407/vaccum trucks, pipeline and barge terminal locations are equipped to manage and transport all forms of hydrocarbons Stabilization allows condensates to be safely transported via pipeline or barge Condensate splitters are designed to economically process multiple finished refined products resulting in a higher overall sales price Facilitate the sale of hydrocarbons typically at premium price points 22

23 GreenHunter Pipeline 23

24 Brine, Freshwater & Condensate Brine Transports produced water from E&P producing wells to transloading terminals for barging Condensate Transports hydrocarbons from E&P producing wells to transloading terminals for stabilization before barging Fresh Water Supplies E&P companies fresh water from the Ohio River at a substantially lower cost 24

25 Case Study Wells BBLS/DAY FAYETTE BROWNSVILLE 2 62 DUNBAR 4 7 FRANKLIN 2 19 GERMAN HENRY CLAY 1 0 JEFFERSON 2 34 LOWER TYRONE 1 0 LUZERNE 2 26 MENALLEN 5 44 NICHOLSON NORTH UNION 1 11 REDSTONE SPRINGHILL 6 77 WASHINGTON GREENE CUMBERLAND DUNKARD GREENE 4 68 JEFFERSON 9 33 MONONGAHELA WASHINGTON AMWELL 1 9 CROSS CREEK 8 0 DEEMSTON 2 16 HOPEWELL 9 0 ROBINSON 1 0 WEST BETHLEHEM 2 23 WESTMORELAND ROSTRAVER 5 45 SALEM 4 7 SEWICKLEY SOUTH HUNTINGDON Grand Total 242 2,031 $12,000, $10,000, $8,000, $6,000, $4,000, $2,000, ASSUMPTIONS $- TOTAL PER YEAR Trucking&Disposal Pipeline Disposal Current trucking and disposal cost based on per barrel calculation provided by producer Total Marcellus well count is 242 Total Marcellus Legacy barrels per day = 2031 Average calculated on a 365 day cycle GRAND TOTAL - TRUCKING & DISPOSAL PER DAY PIPELINE $15, CURRENT $32,

26 FINANCIALS 26

27 Revenue Consistent year-over-year growth since 2011 Greater percentage of revenue generated from take-or-pay contracts $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 New Environmental Services and Hydrocarbon divisions $10,000,000 anticipated to drive future $5,000,000 growth and diversify revenues $- Revenue 27

28 Balance Sheet March 31, 2014 June 30, 2014 September 30, 2014 New common equity capital raised of $2.6 MM within the last four months CURRENT ASSETS: Total assets CURRENT LIABILITIES: Total current liabilities NON-CURRENT LIABILITIES: Notes payable, less current portion Asset retirement obligation Liabilities associated with assets held for sale $ 45,430,467 $ 38,413,383 $ 33,434,833 20,862,580 14,959,206 13,671,083 7,354,008 6,875,154 6,372, , , , , , ,104 Sale of Bio-mass facility to generate $1.325 MM in March 2015 Commercial bank loan on disposal wells paid off in February 2015 Total liabilities COMMITMENTS AND CONTINGENCIES (Note 10 ) 29,300,990 22,867,412 21,106,881 STOCKHOLDERS EQUITY: Series C Preferred Stock, $.001 par value, $25 stated value, 2,000,000 authorized shares, 2,000,000 issued and outstanding and liquidation preference of $50,000,000 at both dates 40,387,706 39,710,764 39,710,764 Common stock, $.001 par value, 90,000,000 shares authorized, 33,796,389 issued and 33,788,055 outstanding at both dates 33,796 35,491 35,491 Additional paid-in capital Accumulated deficit Treasury stock, at cost, 8,334 shares at both dates 119,220, ,453, ,163,799 (143,503,861) (145,644,828) (149,572,953) (9,149) (9,149) (9,149) Total stockholders equity Total liabilities and stockholders equity 16,129,477 15,545,971 12,327,952 $ 45,430,467 $ 38,413,383 $ 33,434,833 28

29 2015 Capex Budget Organic Growth Replace injection pumps to reduce maintenance expense Add additional wells to our inventory increasing revenue and EBITDA Future Capital Investments Purchase additional DOT 407/vacuum trucks Build out full barging network Expand Environmental Services group Expand Hydrocarbons offering Organic Growth Facility Upgrades New Wells Total: ~4MM Future Capital Investments Trucks Facility Upgrades New Wells Barge Infrastructure Hydrocarbons Environmental 29

30 Why Invest in GreenHunter Resources E&P operators require disposal services regardless of drilling activity or commodity price fluctuations = consistent necessary demand Implementation of Barge transportation in 2015 to revolutionize disposal business = significant margin growth Recently formed Environmental Services & Hydrocarbon division offers proprietary solutions w/ significant growth potential One-stop shop that provides E&P operators with all their disposal needs under one roof 30

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