The acquisition significantly increases the value of the asset
HOUSTON, October 11, 2022 /PRNewswire/ — Houston Natural Resources Corp (OTC: HNRC) (“HNRC or the Company”) announced today that it has completed the acquisition of the equity interest in Cunningham Energy, LLC effective September 19, 2022.
An independent engineering firm has completed an assessment of Cunningham Energy’s oil and gas assets. The appraisal value of the rental position of the company at May 18e2022, is $218 million, assuming the currently proposed 40-well drilling program is completed. The acquisition of the 9% stake in Cunningham Energy, in cash and in shares, is valued at $19,620,000which increases the value of the company’s assets by $0.39c per share at $2.82 per share of $2.43 per share, up 16%, as reported in their second quarter financial statements August 1, 2022based on the shares currently outstanding.
With this acquisition, the company further expands its interest in oil, natural gas and oilfield services properties. He further extends his global business interest to Canada and seeks to increase its international expansion.
Cunningham Energy is an independent oil and gas producer. Cunningham Energy has oil and gas operations and interests in the Appalachian Basin with over 30,000 net leasehold acres. Cunningham Energy was established in 2008 and pioneered shallow horizontal oil drilling in West Virginia starting in 2014. During its future Phase 1 development program West Virginia, Cunningham Energy must license, drill and complete 20 Big Injun, Weir and Berea Sandstone Oil shallow horizontal wells to fulfill legacy drill and lease obligations. Currently, 68 potential development well sites are identified on existing leases with plans to expand the lease company’s footprint through future acquisitions and leases.
Cunningham Energy of Canada Inc. also controls an interest in over 965,000 acres in the Matapédia Valley, Gaspé, Quebec, Canada of Marzcorp Inc. on a 75% NRI (net revenue interest) basis through a signed farm-out agreement. More $14 million has been expended on the project to date through collaboration with Marzcorp Inc. Fifteen core holes have been completed, three of which brought hydrocarbons to the surface during a production test. The 51-101 report indicates a high estimate case of 5.088 MMSTB (million barrels of light sweet crude storage) of recoverable reserves (from 4 targets covering only 3% of the property). Currently, there are 7 drill targets verified for Phase 1 as well as 12 drill areas targeted on the lease. The resource potential on the total lease of 965,000 acres of up to 500 million barrels of oil (“OOIP”) of oil initially in place, as well as barrels of oil equivalent (BOE) from several conventional reservoir targets and of a total area was estimated. The median recovery in EUR projected for oil per lateral in the Forillon/indian creek formation on the company’s farm-out areas was estimated at 942,000 barrels. Forillon/indian creek is a naturally fractured limestone conventional formation of Lower Devonian age. The property showed 51 documented samples of API gravity non-corrosive light oil produced during core drilling.
Cunningham Oilfield Services (COS), a division of Cunningham Energy, provides a variety of petroleum services and equipment in the Appalachian Basin. From horizontal and vertical well drilling and support to general well service, rigs and equipment. The recent bipartisan U.S. government infrastructure deal includes a $16 billion investment in legacy pollution cleanup, including $11.3 billion for abandoned mine land and water reclamation projects and $4.7 billion for plugging, cleaning up and restoring orphan well sites. Cunningham Oilfield Services plans significant participation in the program in the future, which includes recently allocated funds for West Virginia and Texas.
Cunningham Energy engages auditors to complete its audited statements for the past two years for listing on NASDAQ or NYSE.
HNRC will also enter into a separate agreement/and/or joint ventures with Viper Capital Partners LLC (www.vipercapitalpartners.com) on a transaction-by-transaction basis for the further development of surface, mineral and drilling projects in the lower 48 states, including West Virginia and Texas.
About Houston Natural Resources Corp.
Houston Natural Resources Corp. (OTCMKTS: HNRC)(www.hnrcholdings.com) is a diversified energy company with oil and gas interests as well as wastewater treatment facilities. Additionally, the company has over $53 million in non-energy assets which it will divest to Worldwide Diversified Holdings, Inc. (WDHI) in 2022. HNRC shareholders of record before the end of 2022 will receive equity in WDHI depending on the shares held. at CNRH. The spin-off reorients the company towards its energy reserves, the Halff oil field in Crockett County, Texas, 83 oil wells, an estimated 33 million barrels of oil and water processing, and reserves valued at $69 million. In addition, the company’s second quarter net profit $5.13M +41% Y/Y, 38% increase, earnings per share (EPS) of $0.18, $74 million Assets, NAV $2.43/share for the first six months of 2022. The company will also continue to seek new oil, gas and wastewater acquisitions as it focuses on creating more value for HNRC investors.
The Company, through its subsidiary Houston Natural Resources, Inc, sponsored HNR Acquisition Corp, a special purpose acquisition company (NYSE: HNRA).
About Cunningham Energy LLC
Cunningham Energy (www.cunninghamenergy.com) is an independent oil and gas producer based in Charleston, West Virginia. The company was established in 2008 for the purpose of acquiring, exploring and producing oil and gas in Appalachia, Illinois, and Williston Basins. Since its inception, we have relied on past experience alongside the application of new technologies to succeed in the ever-changing field of efficient power generation. Cunningham Energy is positioned to take advantage of current and future trends in oil and natural gas production in these basins with aggressive but responsible decisions in the future ahead.
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees. future performance or results and involves a number of risks and uncertainties.
SOURCEHouston Natural Resources Corp.