HOUSTON, TX / ACCESSWIRE / January 8, 2024 / HNR Acquisition Corp (NYSE American:HNRA) (the "Company" or "HNRA") is an independent oil and gas company focused on the acquisition, development, exploration and production of oil and gas properties in the Permian Basin. Over 45 days ago, the Company completed the acquisition of its interest in the Grayburg-Jackson oil field in Eddy County, New Mexico. The field operates 550 oil and gas wells on 13,700 contiguous acres.
The Grayburg-Jackson field began development in the 1940's and in 2020 started to waterflood the Seven Rivers ("7R") interval with good results. The revenues have grown ever since 2020 and the field has been profitable with positive cash flow for the last two years. LH Operating, LLC ("LHO"), a wholly owned subsidiary in the Company structure acquired in November 2023, had $20.3 million of revenues generating positive cash flow and $3.9 million of net income for the nine months ended September 30, 2023. These results included the historical lift costs of $17.00 per barrel. With the acquisition now completed, HNRA will report its first consolidated financials for the fiscal year ended December 31, 2023, which will include results from the acquisition for six weeks of the fourth quarter.
HNRA has performed an initial analysis of the field in conjunction with the results of the pilot study and subsequent actions. To improve capital expenditure efficiency the Company intends to fine-tune its 7R waterflood completions and pumping methods. The Company believes this approach has a high probability of success.
"After approximately 45 days of operating the field, our management team found many areas where we believe we can enhance oil production, as well as numerous financial opportunities we expect to increase our profitability," stated Dante Caravaggio, President and CEO of HNRA. "We anticipate that by reducing our idle well count from 120 to 90 with simple downhole repairs or surface repairs, we can increase production by approximately 100 barrels of oil per day at minimal cost."
"We are fine-tuning our four new well workovers, with production to begin shortly," stated Jesse Allen, Vice President of Operations. "Our team has started maintenance and repairs on a producing facility to reduce flaring and carbon emissions, as well as reduced wellhead back pressure on several wells. We have already improved and increased water recycling to aid the Seven River waterflood by improving the reliability of water treatment/reinjection, and we have improved consistency and increased water injection rates to stimulate additional oil production."
"We made great gains in our initial management of the field, and we will take advantage to improve our oil production and economics. We have also identified ten low-cost opportunities to increase and improve oil production, which will enhance our financial position. Our goals will help us achieve the highest return with a fast payout for our company and to shareholders", continued Jesse Allen.
"We are actively working to "harden" our mechanical and electrical systems to reduce downtime, and to improve safety and reliability", concluded Caravaggio.
About HNR Acquisition Corp
HNRA is an independent upstream energy company focused on maximizing total returns to its shareholders through the development of onshore oil and natural gas properties in the United States. Our long-term goal is to maximize total shareholder value from a diversified portfolio of long-life oil and natural gas properties built through acquisition and through selective development, production enhancement, and other exploitation efforts on its oil and natural gas properties. On November 15, 2023, HNRA acquired our operating entity LH Operating, LLC ("LHO") whose assets include interests in the Grayburg-Jackson oil field in the prolific Permian Basin in Eddy County, New Mexico.
HNRA's Class A common stock trades on the NYSE American Stock Exchange. For more information on HNRA, please visit the Company website: https://www.hnra-nyse.com/
Forward-Looking Statements
This press release includes "forward-looking statements" that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as "expects," "believes," "anticipates," "intends," "estimates," "seeks," "may," "might," "plan," "possible," "should" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect the Company's management's current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Important factors - including the availability of funds, the results of financing efforts and the risks relating to our business - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on EDGAR (see www.edgar-online.com) and with the Securities and Exchange Commission (see www.sec.gov). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Investor Relations
Michael J. Porter, President
PORTER, LEVAY & ROSE, INC.
[email protected]
SOURCE: HNR Acquisition Corp