H2 Oil Recovery Services Inc., a 30-employee concern based in Midway, is thought to be the first energy company ever to make the venture capital investment report issued quarterly by PriceWaterhouseCoopers, said MoneyTree spokesman Joe Strain.
"That really stood out to me in the report for the third quarter," he said. "The [Utah] report has always been dominated by software and Internet and computer companies."
Although tech operations still claimed the biggest chunks of the $53 million recorded for eight investment deals during the July-September period, H2 Oil's nearly $3.7 million - along with two telecommunications investments - show growing diversity in Utah's venture capital landscape, Strain said.
Supercomputer maker and frequent venture capital leader Linux Networx accounted for more than half of the total with its $27 million infusion, but newer entities such as H2 Oil - and telecom entities Lindon's Alianza Inc. ($3.9 million) and S5 Wireless Inc. of Sandy ($4.5 million) - together accounted for more than $12.1 million.
Other Utah funding recipients included the Draper business data security company Venafi Inc., almost $6 million; Solera Networks Inc., a Lindon network security firm, $3.9 million; Salt Lake City's In Store Broadcasting Network, $2.5 million; and 3point5 Inc., an Internet software company also based in Salt Lake City, $1.5 million.
"We went operational in January. I guess we've kept a low profile, until now," quipped H2 Oil's executive vice president, Bob Wait. "We're pretty thrilled with how business has gone so far."
H2 Oil, which uses proprietary technology to recover up to 98 percent of petroleum typically lost at the bottom of oil field storage tank bottoms, does its processing at a plant in Andrews, Texas.
With oil fields once more burgeoning in eastern Utah and Wyoming, Midway is a prime location from which to expand, Waits says.
"We have plans eventually to build several more [recovery] plants in the region," he said.
At $53 million, Utah's total venture capital rung up during the third quarter is more than double that for the second quarter ($21 million on four deals). In the first quarter, there was $60 million and nine deals.
Strain said the average Utah deal averaged $6.4 million, compared with $7.6 million nationally, based on the quarter's $6.2 billion U.S. total.
Regionally, Utah is a distant second to Arizona (nearly $2.85 billion) in venture capital raised. New Mexico raised $17.5 million, Idaho $14.4 million and Nevada $3 million. Wyoming was not listed in the report.
As for Linux Networx, CEO Robert Ewald has said that he thinks his company's recently successful fundraising puts it in a spot to capitalize on the growing market for ever-faster and smarter computers using proven multiprocessor clustering technology.
Ewald, who could not be reached Monday, said earlier the new funding served as validation for "our leadership in Linux [operating system-based] supercomputing and reaffirms our investors' confidence in the company's continued growth."
bmims@sltrib.com
