Crowdfunding oil and gas service company? Fortress Environmental gives it a whirl

Fortress Environmental believes large volume of drilling, production in Eagle Ford Shale creates clean up opportunity

Dallas-based Fortress Environmental Holdings is taking a page from the Silicon Valley playbook and looking to “crowdfunding” to finance its newest expansion projects in the Eagle Ford Shale of South Texas.

Fortress Environmental hopes to crowdfund Eagle Ford disposal “supercenters.” Photo: Fortress Environmental.

Recent changes to US Securities and Exchange Commission regulations allow energy companies to raise private equity funding using crowdfunding platforms, which globally grew 167 per cent to reach $16.2 billion raised in 2014. Crowdfunding allows many small investors to put small amounts into support startups or expanding companies.

Fortress Environmental says it plans to crowdfund to build a series of saltwater disposal supercenters throughout the Eagle Ford.

“We believe that this form of capital raise will be especially appealing to those who recognize that Fortress employs the latest in environmentally friendly methods to enhance our services,” said Elliot Reiff, CFO of Fortress Environmental.

“Fortress already has a strong base of private investors and we think this direction is a natural for us.”

According to a Fortress press release, recent SEC rule changes now allow exploration and production energy companies to raise private equity funding by building online crowdfunding profiles that market executive summaries, pitch videos, offering documents and other types of financial disclosure documentation that prospective investors can use to shop and invest on a 24×7 basis. The new rules allow crowdfunders to use advertising, email marketing, public relations, social media and other types of marketing campaigns to promote their investment opportunities to prospective oil and gas investors.

Fortress Environmental Texas SWD Frac Tank Drop & Go Staging Area in Gonzales Texas.

Fortress Environmental CEO Mike Parsons says that for every barrel of oil  in the Eagle Ford, 10 barrels of oily saltwater are brought to the surface. That produced water has to be filtered and returned back to its origin.

“Hydraulic fracking produces a significant amount of oil-based and water-based mud,” said Parsons. “Like produced saltwater, mud and cuttings need to be cleaned and recycled. And right now the Eagle Ford Shale is in short supply of mud farms.”

Fortress Environmental says that according to state records, in Gonzales County 59 drilling operators working 4,127 drilled wells on 553 oil leases produced around 3.1 million barrels of oil and ~31 million barrels of produced saltwater per month. In Dimmit County, 54 drilling operators working 8,178 drilled wells on 1,689 oil leases produced around 2.1 million barrels of oil and ~21 million barrels of produced saltwater per month.

To meet the demand for cleanup and disposal services, Fortress Environmental is building environmentally-friendly Salt Water Disposal (SWD) Supercenters, which provide every service that an oilfield service company will need from a single local location. This streamlined approach saves trucking companies thousands of dollars per truckload by reducing driving time, man-hours, fuel consumption, truck maintenance costs and a simplified, single source billing process, according to the press release.

Fortress is evaluating crowdfunding platforms and hopes to launch its campaign in the near future.