Nuverra Environmental Sued Over Stock Price Tumble

At the end of July, MDN told you (sort of tongue-in-cheek) that Nuverra Environmental Solutions (formerly Heckmann), a company that recycles and otherwise disposes of shale drilling wastewater and leftover rock and dirt from drilling, was blaming “too much success” in the Marcellus/Utica for their poor quarterly earnings report (see Wastewater Company Nuverra: Too Much Success in Marcellus/Utica). Nuverra’s rapidly expanding Marcellus operation led to more outsourcing and less profitability, it seems. It also seems Nuverra now has a much bigger problem than a bustling Marcellus–they’re being sued in a class action by investors.

The class action, filed by very active law firm Robbins Geller, alleges that Nuverra previously “issued materially false and misleading statements regarding the Company’s financial performance and future prospects.” Because of the alleged false statements, Nuverra’s stock traded at artificially inflated prices. What went up (the stock price) has now come down (see the chart below), and investors (or at least the lawyers) are not pleased…
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Wastewater Company Nuverra: Too Much Success in Marcellus/Utica

Nuverra Environmental Solutions (formerly Heckmann), a company that recycles and otherwise disposes of shale drilling wastewater and leftover rock and dirt from drilling, decided to release the “bad news” ahead of an earnings call on August 8 that 2Q13 profits will not meet expectations. They’ll show earnings of a measly $165.5 million. Nuverra has a growing presence in the Marcellus and Utica Shale region.

So what were the challenges in 2Q13 that caused Nuverra to falter financially? Believe it or not, one of the reasons for their “poor” financial showing is stronger than predicted growth for their business in the Marcellus/Utica. The strong growth forced them to parcel out work to subcontractors, which costs more than having your own employees do the work. Nuverra says they’re now ramping up and expanding their own people in the Marcellus/Utica…
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Heckmann Corp Buys Appalachian Water Services

Last week Heckmann Corporation, an environmental services company, announced they were merging with Power Fuels, another enviro services company and moving corporate HQ from Pittsburgh to Scottsdale, AZ (see this MDN story). Heckmann is on a tare—today they’ve announced they bought Appalachian Water Services in Fayette County, PA. Heckmann says the purchase is an important part of their strategy for shale wastewater treatment in the southern Marcellus Shale area.

From the Heckmann press release:

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Pittsburgh Enviro Services Company Heckmann Merging, Moving

Heckmann Corporation, a publicly traded environmental services company with a major footprint in Pittsburgh and throughout the Marcellus and Utica Shale region, announced on Tuesday they are merging with Power Fuels, a privately held environmental services company based in North Dakota, the largest such firm in the mighty Bakken Shale. The merger puts Heckmann well on the path to their stated goal of becoming the country’s largest environmental services company.

Soon after the announcement, it was disclosed on a conference call to analysts that the new headquarters for Heckmann would be moving from Pittsburgh to Scottsdale, Arizona. That announcement has created a fair amount of angst in Pittsburgh. However, Heckmann says they “anticipate” no layoffs in the Marcellus region:

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Start a Company or Get a Job in the Marcellus? Try Water

Looking for a way to participate in the Marcellus and Utica Shale economic boom? As an investor, or as a business owner or even as a job seeker, you might want to consider water. Yeah, water. Try these numbers on for size: In 2011, drillers paid somewhere between $1.3-$1.7 billion to dispose of fracking wastewater in the Marcellus Shale. In 10 years it’s estimated to be a $15-$22 billion market—just in the Marcellus Shale.

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Wastewater Company Heckmann Corp. Makes Major Expansion in Shale Gas Regions, Including the Marcellus

Heckmann Corporation, a water solutions company focused on water issues and, in particular, oil and natural gas exploration and production, has completed four acquisitions that substantially expand the Company’s water solutions for energy development business segment, including a major presence in the Marcellus Shale region. Within the past year, the California-based company has grown from 30 employees to over 750, and from $8.6 million in revenue for the first quarter of 2010 to $23.8 million for the first quarter of 2011.(1) Heckmann has a small but rapidly growing operational base in Pittsburgh for it’s Marcellus Shale operations.

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