Tuesday, September 4, 2012

Heckmann To Buy Power Fuels -- The "Face" of Watford City

Updates


 March 13, 2013: Heckmann Corporation - together with Heckmann Water Resources, Power Fuels and Thermo Fluids - will become "Nuverra Environmental Solutions."   

 October 1, 2012: Human interest story on Heckmann / Power Fuels, FargoForum.

 September 23, 2012: Encana with mobile LNG refueling stations.

September 13, 2012: Heckmann acquires another fracking water treatment company -- Appalachia Water Services; to serve the Marcellus. Note press release of April 5, 2011: Heckmann to have largest fleet of LNG or CNG vehicles in North America.

September 10, 2012: story at Dickinson Press/InsideClimate News.

September 5, 2012: see first comment. To make it easier, click here to see video on Heckmann on CBNC/Cramer.

September 4, 2012:  Heckmann had a huge day today; popped a dollar from $2.70 to $3.70. Google "Heckmann natural gas trucks." Some of the google hits:
Don suggests this: the Heckmann / Power Fuels deal will be the catalyst to shift "all" trucks in the Bakken to natural gas; it will start with all Heckmann Power Fuels trucks in the Bakken refueling at the natural gas processing plants that are springing up throughout the Bakken; natural gas corridors are being developed from Wyoming to California;

Some may see this as just another merger, but this provides Heckmann with a huge entry into one of the biggest hydrocarbon laboratories in North America. This could end up being a much bigger story than it seems on the surface. It would be a hoot for me to come back to North Dakota to see natural gas refueling stations throughout the oil patch. Developers/proponents of the proposed diesel refineries in western North Dakota are probably watching this development closely.

Original Post
Link here. (A huge "thank you" to "anon 1" for alerting me to this story. I doubt I would have seen it until later this week. I will be curious to see if any of the "big" sites pick up this story today.)

Heckmann to pay $125 million in cash and 95 million shares (currently trading about $3.25).

95 x 3.25 -->  $300 million --> about a $500 million deal when all is said and done. Folks will correct me if I have the numbers wrong, which wouldn't be surprising.

Heckmann's market capitalization is not quite $500 million. With $5 million in cash and $6 million in cash flow, this is quite a chunk to bite off.  (Again, from Yahoo!Financial if I'm reading the numbers correctly.)

I've blogged about PowerFuels a number of times; pretty much a Watford City story (Power Fuels website).

From Heckmann's website:
Heckmann Corporation is an environmental services company. The Company operates through two business segments.

Heckmann Water Resources (HWR) is dedicated to the movement, treatment and disposal of water generated by energy companies involved in the discovery and production of oil and natural gas.

Heckmann Environmental Service (HES) is a one-stop-shop for collection and recycling services for oily waste products, including used motor oil, oily wastewater, spent antifreeze, used oil filters and parts washers. Heckmann Corporation is building a national footprint across its environmental service offerings. The Company has more than 1,500 employees and operates in 52 locations in the U.S. 
In this announcement:
"Just three years ago, in the summer of 2009, we set out to build the largest environmental services company in the United States, operating in a completely new market segment. We are well down that path, and one billion dollars in revenue is within our reach."
Note: he said the largest environmental services company in the United States, not in the Bakken. I constant theme of this blog has been to emphasize the national (and international) influence of the Bakken. 

From this blog, regarding Power Fuels:
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