Not much went right for Nuverra Environmental Solutions (NESC) in 2013. The company's profits were affected by both bad weather and bad decisions. In looking ahead to 2014, here are the five areas that will have the biggest impact on the company.

Water recycling
A lot is riding on the company's water recycling partnership with Halliburton (HAL 0.88%). That's why investors need to keep an eye on the results from the first H2O Forward frac job that is expected to be conducted in the first quarter of 2014. If it is successful, the process could spread quickly throughout the Bakken, and then likely to the Utica Shale. As Halliburton's preferred partner, Nuverra could then follow the oil-field service giant to more fields, and really take its business to the next level. That's why the Bakken pilot project could make or break the company's grand plans to really take the business to the next level.

Leverage
Nuverra had $536 million in total debt as of the end of the third quarter. That left it with about $80 million in total liquidity. In addition to tight liquidity, management was forced to proactively amend its credit facility after some negative articles surfaced that suggested it was in danger of breaching its debt covenants.

The leverage situation has been getting better, as Nuverra has been using its internally generated cash flow to pay down its debt. Further, it's currently working to sell its Industrial Solutions business, the proceeds of which will also be used to pay down debt. However, if that deal falls through, or Nuverra makes a big acquisition, it could cause concerns surrounding its leverage to resurface.

Acquisitions and integration
Acquisitions are a big part of the company's past, as well as its future growth plans. In 2012, the company made several big deals that transformed the company. However, its track record on integrating those deals is questionable, at best. Investors need to watch future acquisitions carefully, especially something unrelated to its core business, so that it doesn't acquire another dud similar to its China water business, or soon-to-be-sold industrial recycling division.

Exploration and production budgets
Nuverra spent all of 2013 waiting for a pickup in drilling that never came. The company has now turned its attention to an increase in 2014, and has already spent money to retain employees to position its business for the year ahead.

Nuverra is pointing toward an increase in 2014 capital budgets, third-party forecasting of an increase, and the fact that exploration and production companies have been raising capital, as its signal that it will see more activity in 2014. However, a falloff in commodity prices could cause a major slowdown in drilling, which would significantly impact Nuverra's revenue.

Environmental policy
Despite being used for decades, fracking is under pressure from environmental groups, which view it as being potentially damaging to the environment. Regulations are still being developed in many areas, and could prove overly burdensome. Overregulation could also stifle production growth that, taken together, could crimp Nuverra's margins and its ability to grow.

However, smart new policies could actually be a big positive for Nuverra. For example, Colorado and Wyoming have recently enacted new environmental laws that address the environmental issues of fracking that both sides can agree on. Additional laws that address water recycling, or handling solids from drilling, could have a major positive impact on Nuverra's business going forward.

Investor takeaway
A bad showing in 2013 really put Nuverra in a tough spot. That makes 2014 a real make-or-break year for the company. We should know early in the year whether the Halliburton partnership will be a success. Other than that, the company needs to perform in the areas that it can control, while, at the same time, see positive developments in those areas outside of its control.

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