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GreenHunter Energy (GRH +4.2%), fresh off announcing an enhanced Eagle Ford presence through the...

GreenHunter Energy (GRH +4.2%), fresh off announcing an enhanced Eagle Ford presence through the development of seven new salt water disposal wells, says it has expanded its Appalachian equipment assets to service oil and gas operators active in the Marcellus and Utica shale plays.
Comments (2)
  • JailDoc
    , contributor
    Comments (47) | Send Message
     
    GRH too risky a play, sold all mine in March. Long in MHR, think it
    will play well in 2013.
    25 May 2012, 01:26 PM Reply Like
  • MashieNiblick
    , contributor
    Comments (41) | Send Message
     
    Very risky, but very high reward. The business plan is entirely solid, servicing the oil and gas producers, and particularly the drillers in resource plays requiring large amounts of water for fracing. Alternatives are few and the demand is great and with no end in sight.
    GRH has wisely diversified into multiple resource plays, including the Bakken, Eagle Ford, Marcellus/Utica, and even a toe-hold in the Mississipian Lime in Oklahoma. They've wisely extended their service offerings to accomodate whatever kind of water management the customer needs. However, the basic money maker is so simple you just need a calculator: Every well drilled in any one of these plays must recycle or dispose of the water produced once it's put on line. Few producers have the time, expertise or incentive to manage their own water when a qualified alternative is knocking on their door. Check GHR's latest investor presentation - they're getting $7-10 per barrel to haul water in the Marcellus, and another $3/bbl to dispose of it. Holy crap! Even if gas prices force a minimum of gas drilling in those segments of the plays, you've still got $90 oil to support continued oil drilling, and the Marcellus, Utica, Eagle Ford, and Bakken all have substantial undrilled oil and/or wet gas potential.
    This is really simple: if you believe in the future of oil and gas, then you can buy the producers, the services companies, or both. In this case a well-funded, well-conceived, well-run service company with huge upside is trading for less than $2/share and belongs in the $6-8 range. I'll take that risk.
    [I am long GRH and intend to buy more when the impact of summer on natgas prices is known]
    25 May 2012, 03:59 PM Reply Like
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