Letter of Intent signed for up to $100 million in cash and securities with additional total development amounts up to $600 million including future SPAC and PIPE funds
HOUSTON, Texas, March 23, 2022, Houston Natural Resources Corp (OTC: HNRC) (“HNRC or the Company”) announced today that it has signed a Letter of Intent for a transaction with Cunningham Energy LLC (“Cunningham Energy”).
HNRC will form a Special Purpose Acquisition Corporation with cash and securities for the acquisition of interests in Cunningham Energy with the purpose of acquiring, exploring, and producing oil and gas in the United States and Canada. The proposed investment is for up to USD $100,000,000 in cash and securities and subject to the competition of due diligence and financing. The parties are committed to closing the transaction on or before June 30, 2022. Under the Letter of Intent additional future development funding for up to $600,000,000 from SPAC and PIPE follow on transactions are also planned.
Cunningham Energy is an independent producer of oil and gas. Cunningham Energy conducts operations and oil/gas interests in the Appalachian Basin with over 30,000 plus net acres of leases. Cunningham Energy was formed in 2008 and was a pioneer of shallow horizontal oil drilling in West Virginia starting in 2014. During its future phase 1 development program in West Virginia, Cunningham Energy is to permit, drill, and complete 15 Shallow horizontal Big Injun, Weir, and Berea Sandstone Oil wells to fulfil legacy drilling & lease obligations. Identified currently are 75 to 100 potential development well sites on existing leases with plans to expand the company’s leasehold footprint through future acquisitions and leasing.
Cunningham Energy has a vertically integrated business model with multiple acquisition targets identified. Since its inception they have relied on past experience in parallel with the application of new technologies to succeed in the ever-changing field of efficient energy production. Cunningham Energy is positioned to take advantage of current and future trends in oil and natural gas production throughout these basins with aggressive but responsible decisions in the future.
Cunningham Energy of Canada Inc. also controls an interest in more than 965,000 acres in the Matapedia Valley, Gaspesie, Quebec Canada from Marzcorp Inc. on a 75% NRI (net revenue interest) basis through an executed Farmout Agreement. Over $14 million has been spent on the project to date through collaboration with Marzcorp Inc. Fifteen core holes have been completed with three bringing hydrocarbons to surface on production test. The 51-101 report indicates a High Estimate case of 5.088MMSTB (million stock tank barrels of light sweet crude) recoverable reserves (from 4 targets covering only 3% of the property). Currently, there are 7 verified drilling targets for Phase 1 as well as 12 drilling areas of interest targeted on the leasehold. Resource potential on the total 965,000 acre leasehold of up to 500 million plus barrels of oil (“OOIP”) Oil-Initially-In-Place, as well as barrels of oil equivalent (BOE) from multiple conventional reservoir targets and total area has been estimated. The median EUR recovery projected of oil per lateral in the Forillon/Indian Cove formation on areas the company’s farmout leasehold has been estimated at 942,000 bbls. The Forillon/Indian Cove is a naturally fractured limestone conventional formation of lower Devonian age. The property has shown documented 51 API gravity light sweet oil samples produced during core drilling.
Cunningham Oilfield Services (COS), a division of Cunningham Energy, provides a variety of oilfield services and equipment within the Appalachian Basin. From drilling and support of horizontal and vertical wells to general well service, rigs and equipment. The recent US Government Bipartisan Infrastructure Deal includes a $16 Billion investment in legacy pollution clean-up, including $11.3 billion for abandoned mine land and water reclamation projects and $4.7 billion for orphaned well site plugging, remediation, and restoration activities. Cunningham Oilfield Services projects meaningful participation in the program moving forward which includes recently allocated funds for West Virginia and Texas.
Cunningham Energy is engaging auditors to complete its last two years audited statements for a listing onto NASDAQ or NYSE.
Cunningham Energy has entered into a separate agreement to provide advisory services to HNRC that would include the development of the Company’s existing 83 wells in the Halff Oil Field in Crockett County, Texas and additional investment opportunities in the energy industry. The fields have independent valuation of $69 million based on initial valuations of $50 per barrel of oil and $3 per MMBtu of natural gas.
HNRC will also enter into a separate agreement/and or joint ventures with Viper Capital Partners LLC on a deal-by-deal basis for further development of acreage, minerals, and drilling projects in the lower 48 states, including West Virginia and Texas.
About Houston Natural Resources Corp
Houston Natural Resources Corp (www.hnrcholdings.com) (OTC: HNRC). The Company is dedicated to increasing shareholder value through developing natural resources with state-of-the-art innovative technologies in tandem with sustainable environmental services of toxic oil field waste disposal and recycling that are environmentally safe and socially responsible. The Company, through its subsidiary Houston Natural Resources, Inc sponsored HNR Acquisition Corp, a Special Purpose Acquisition Corp (NYSE:HNRA).
About Cunningham Energy LLC
Cunningham Energy (www.cunninghamenergy.com) is an independent producer of oil and gas based in Charleston, West Virginia. The company was formed in 2008 for the purpose of acquiring, exploring, and producing oil and gas in the Appalachian, Illinois, and Williston Basins. Since inception we have relied on past experience in parallel with the application of new technologies to succeed in the ever-changing field of efficient energy production. Cunningham Energy is positioned to take advantage of current and future trends in oil and natural gas production throughout these basins with aggressive but responsible decisions in the coming future.
About Viper Capital Partners LLC
Viper Capital Partners LLC (www.vipercapitalpartners.com) was formed to facilitate capital formation for the oil and gas industry in the areas of Drilling & Production, Leasing, as well as mineral acquisition. The company is based in Houston, TX.
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 of future performance or results and involve a number of risks and uncertainties.
Houston Natural Resources Corp.
Houston Texas USA.