HNR Acquisition Corp Announces Completion Of Its Business Combination By Acquisition Of Pogo Resources, LLC And Its Subsidiaries; HNRA begins Managing And Operating The Grayburg-Jackson Oil Field

Author: Benzinga Newsdesk | November 15, 2023 04:20pm

HNR Acquisition Corp (NYSE:HNRA) (the "Company" or "HNRA"), which was a special purpose acquisition company, today announced the completion of its business combination with Pogo Resources, LLC and its subsidiaries.

About the Business Combination through Acquisition

HNRA has completed its business combination through acquisition of all of the equity interests in Pogo Resources LLC and its subsidiaries ("Pogo") whose assets include interests in the Grayburg-Jackson oil field in the prolific Permian Basin in Eddy County, New Mexico.

The Grayburg-Jackson oil field is located on the Northwest Shelf of the Permian Basin in Eddy County, New Mexico. According to the United States Geological Survey, the Northwest Shelf contains the largest recoverable reserves among all the unconventional basins in the United States. Pogo's holdings comprise 13,700 contiguous leasehold acres, 343 producing wells and 207 injection wells for a total of 550 wells. Current production is approximately 1,400 barrels of oil and oil equivalent per day. Management expects to increase daily production to nearly 4,000 barrels of oil and oil equivalent in the next three (3) years in accordance with a reserve report by William M. Cobb & Associates, Inc. a 3rd party engineering firm engaged by Pogo.

William M. Cobb Associates, Inc., a worldwide independent petroleum engineering firm founded in 1983, was retained in 2022 as an independent third party to estimate proven reserves and future income of the property. William M. Cobb & Associates, Inc. estimates proven reserves of $434 million. Pogo generated $35 million in revenues with solid cash flow and earnings in 2022.

The VP of Operations of HNRA has 40+ years of experience in similar water flood oil fields. HNRA also will retain all 12 field employees and supervisors. Field supervisors each have 10-15 years of extensive industry experience.

Joseph V. Salvucci, chairman of the board, said "Our management team worked extremely hard to find the right combination that met our business plan. Pogo Resources, LLC fit all of our criteria for revenues, earnings. The management team has many years of experience in the oil and gas business. We believe that there is a significant upside to grow the company and expand the revenues and profits".

Dean Rojas, CEO, said, "In all the years I have worked in the petroleum industry, I have never seen such upside potential in one field as I see in the Grayburg-Jackson Field. Not only do I believe we will be increasing production by at least two and a half times to approximately 4,000 barrels a day in 36 months, but there is potential at deeper levels in the Field. Our research indicates that the stacked-play potential of the Northwest Shelf of the Permian Basin, combined with favorable drilling economics, supports our findings that by continuing to improve our leasehold position, well-spacing and completions, we will recover a greater portion of oil from the reserves. In addition, we have a superior management and operating team with many years of experience in the petroleum industry."

Mitchell B. Trotter, CFO, said, "With free cash flow and growth, we expect to pay down debt and build a very strong balance sheet. With our philosophy in managing the Field, we will institute a hedging program to protect our profits while we grow and develop the Field." He continued, "We intend to aggressively look to acquire working interests in substantial resources in the Permian Basin. We expect to expand the Grayburg-Jackson Field by focusing on acquisitions that complement our current footprint in the Permian Basin. By targeting working interests, contiguous acreage positions that have a history of predictability, and stable oil and gas production rates, we anticipate significant increases in revenues and profits."

Posted In: HNRA