GreenHunter Energy, Inc. reported that its wholly owned subsidiary, GreenHunter Water, LLC, has entered into a definitive Joint Venture Agreement (JV) to develop seven Class II salt water disposal (SWD) wells to be located in Gonzales, Karnes, DeWitt, Frio and La Salle counties of South Texas. These new wells will be strategically located in the heart of the Eagle Ford Shale Play and will establish GreenHunter as the dominant operator of SWD capacity and a leading provider of Total Water Management Solutions in this very active region.
When fully operational, management expects aggregate commercial disposal capacity from these wells to exceed 140,000 Barrels per day (BBL/D). For its 75% ultimate share in the JV, GreenHunter will pay total consideration to the JV partners of approximately $3.6 million in a combination of cash, newly issued GRH restricted common stock (valued at $2.06 per share) and Series C perpetual cumulative preferred shares. Management is presently budgeting capital expenditures of approximately $1.75 million for each SWD facility location.