Houston Natural Resources Corp - HNRC stock
Overview[edit]
Houston Natural Resources Corp (OTC: HNRC) is a holding company that provides long-term equity and debt investment capital for small and medium-sized businesses' growth, acquisitions, and recapitalizations.[1]
The company is involved in the recycling and remediation of oil-produced contaminants and offers oil field water treatment and disposal services through a reclamation plant in south Texas. Houston Natural Resources Corp was originally founded as Worldwide Diversified Holdings in 1998 but changed its name to its current form in June 2020. It is headquartered in Houston, Texas.[2]
Name Change[edit]
In light of the acquisition of Cunningham Energy, HNRC intends to rebrand itself as Cunningham Natural Resources Corp (CNRC). CNRC's primary focus will be on traditional oil and gas opportunities, as well as energy transition materials such as copper, lithium, gold, and other valuable metals. This new investment direction will have a global scope, with a strong emphasis on sustainability as a fundamental part of the company's strategy. The company has engaged auditors to facilitate a listing on the NYSE or NASDAQ in 2023.[3]
Acquisitions[edit]
Cunningham Energy[edit]
Houston Natural Resources Corp finalized the acquisition of a 100% ownership stake in Cunningham Energy, LLC in July, 2023. This acquisition reportedly increased HNRC's net asset value to $3.35 per share. Previously, HNRC had acquired a 9.9% interest in CE, and with the addition of the remaining 90.1% interest, HNRC now holds a complete 100% ownership in Cunningham Energy. Ryan Cunningham will continue to manage Cunningham Energy under the new ownership structure. The acquisition was completed by issuing common and preferred stock, with a portion of the preferred shares held in escrow to cover specific liabilities of Cunningham Energy.[3]
About Cunningham Energy[edit]
Cunningham Energy was founded in 2008 and has since become a leading independent producer of oil and gas. With 30,000 net acres of leaseholds in the Appalachian Basin, CE also blazed new trails starting in 2014 when it pioneered shallow horizontal oil drilling in West Virginia. In its Phase 1 development program for WV, Cunningham Energy will permit, drill, and complete 20 shallow Big Injun, Weir, and Berea Sandstone oil wells to fulfill lease obligations. There are currently 68 potential well sites identified on existing leases with plans to bolster the CE's presence through further acquisitions and leasing initiatives.[4]
Matapedia Valley, Gaspesie, Quebec[edit]
As a result of an executed farmout agreement, Cunningham Energy of Canada Inc. owns 965,000 acres in the Matapedia Valley, Gaspesie, Quebec Canada for 75% NRI (net revenue interest). In collaboration with Marzcorp Inc., more than $14 million has been invested in the project to date.[4]
Oilfield Services[edit]
Cunningham Oilfield Services (COS), a division of Cunningham Energy, provides a comprehensive range of oilfield services and equipment to the Appalachian Basin. Everything from drilling and supporting both horizontal and vertical wells, to general well service, rigs and equipment. The US Government Bipartisan Infrastructure Deal recently announced includes an investment of $16 Billion for legacy pollution clean-up and remediation projects. Of this total, $11.3 Billion is earmarked for abandoned mine land and water reclamation in addition to $4.7 Billion set aside specifically for plugging of orphaned wellsites, remediation and associated restoration activities. COS looks forward to taking part in these initiatives across West Virginia and Texas which have been allocated funds as part of the deal.[4]
Leasehold Position[edit]
An independent engineering firm has recently conducted a revised assessment of Cunningham Energy's oil and gas assets. According to the updated evaluation, as of December 31, 2022, the leasehold position of CE is valued at $352 million. This appraisal takes into account the completion of the proposed drilling program consisting of sixty-eight (68) wells. The acquisition of a 100% interest in CE, which was accomplished through a combination of cash and securities, has resulted in a per-share increase in the appraised asset value of the Company by $3.35. This valuation is based on the existing outstanding shares.[3]
Pogo Resources[edit]
Houston Natural Resources acquired Pogo Resources, LLC and its subsidiary, LH Operating, LLC November 15, 2023 by purchasing all the equity interests in Pogo. The acquired assets include an interest in the Grayburg-Jackson oil field in the Permian Basin in New Mexico.[5]
LHO, a privately held company, took control of the Grayburg-Jackson field (referred to as "the field") in late 2019 and commenced operations there in early 2020. At the outset in 2020, the field's production level stood at approximately 500 barrels of oil equivalent (BOE) per day. Over time, LHO has significantly boosted its production, reaching an average of 1,388 BOE per day for the nine months ending on September 30, 2023. All of the Company's field production is being marketed through long-term contracts with various customers across the United States.[5]
For the nine months concluding on September 30, 2023, LHO achieved $20.3 million in revenue, resulting in positive cash flow, and recorded a net income of $3.9 million. As of September 30, 2023, LHO's total assets were valued at $70.4 million. With the completion of the acquisition, HNRA will soon release its initial consolidated financial statements for the fiscal year ending on December 31, 2023. It's important to note that the acquisition's results will only be incorporated for a six-week period within the fourth quarter of the fiscal year ending on December 31, 2023.[5]
Operations[edit]
Houston Natural Resources Corp is a multi-faceted energy company that operates in the oil and gas industry as well as in wastewater treatment. One of its key assets is the Halff Oil Field in Crockett County, Texas, which consists of 83 oil wells with an estimated 33 million barrels of oil and appraised reserves of $69 million. In addition to managing these existing assets, HNRC is actively seeking new acquisition opportunities in the oil and gas and wastewater sectors to create value for its investors.[6]
Management[edit]
Key leaders of the company are:[7]
Donald H. Goree, Chairman & Chief Executive Officer. He has over 40 years of experience in oil and gas pipeline construction and operations.
Frank Kristan, President, CEO, CFO, Secretary & Treasurer. He joined Houston Natural Resources in 2007 and also holds the position of President at Avenger Boats. Previously, he served as President and CEO of Patriot Advisors, Inc.
Donald W. Orr, President & Director. He is a geologist with over 42 years of experience in petroleum geology and production operations. Mr. Orr has a success rate of over 70% on more than 250 wells he has drilled.
David M. Smith, Director & Legal Counsel. He is a licensed attorney in Texas with 40 years of experience in the legal field of oil and gas exploration and production.
Michael Martin, Land Manager. He has 40 years of experience in all phases of land acquisition, including contract negotiations, pipeline right-of-way acquisitions, and oil and gas title examinations. He also has expertise in the division of interest title curative.
- ↑ Barrons. Stocks. HNRC overview. Accessed on 12/22/2022.
- ↑ Seeking Alpha. HNRC summary. Accessed on 12/22/2022.
- ↑ 3.0 3.1 3.2 PRNewswire. HNRC ACQUIRES 100% INTEREST IN CUNNINGHAM ENERGY LLC. July 11, 2023.
- ↑ 4.0 4.1 4.2 hnrcholdings.gcs-web.com. HNRC ACQUIRES 100% INTEREST IN CUNNINGHAM ENERGY LLC. July 11, 2023.
- ↑ 5.0 5.1 5.2 PR Newswire. Company Completes Business Combination. December 11, 2023.
- ↑ Morning Star. News HNRC. November 9, 2022
- ↑ Yahoo Finance. HNRC Expert Management Team Leading Business Expansion Plans. October 7, 2021.
OTC Symbol: HNRC | OTC Tier: Pink Current
