HNR Acquisition Corp Announces a Significant Increase in Potential Oil Recovery from the Grayburg-Jackson Field
HOUSTON, TX / ACCESSWIRE / March 12, 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. Today, the Company announces that the potential untapped oil in the prolific Grayburg and San Andres oil zones may be accessed in the near term.
After a series of management meetings with its independent petroleum consultants to review well log data and historical completion data, in addition to the previously announced proven reserves, there may be 34 million barrels of oil to be accessed in the prolific Grayburg and San Andres zones by simply adding perforations to existing wells in the Grayburg and San Andres formations in the Company's leasehold. Management has a dual path analysis underway where our VP of Operations is focused on maximizing short-term and long-term production in the Seven Rivers zone, and the Company's consulting geologist is assessing the best approach to recover oil from the Grayburg and San Andres zones.
The Grayburg-Jackson field is currently producing crude oil and natural gas from the waterflood operations primarily from the Seven Rivers zone. Cobb and Associates ("Cobb"), third-party engineers, have updated our reserve report for the end of 2023 which has proven reserves of approximately 15.4 million barrels of oil and 3.5 billion cubic feet of natural gas. Our Grayburg-Jackson field is located on 13,700 leasehold acres in Eddy County, New Mexico with oil and gas rights to the Seven Rivers, Queen, Grayburg and San Andres intervals. The mapped original-oil-in-place ("OOIP") is approximately 876 million barrels of oil in the Grayburg and San Andres intervals and 80 million barrels from the Seven Rivers interval for a total OOIP of approximately 956,000,000 barrels of oil.
The proven oil reserves of over 15 million barrels, combined with the potential 34 million additional barrels from the Grayburg and San Andres zones, will produce oil and a revenue stream for more than two decades at a slow decline rate.
"After reviewing all the current and historical data, the consultants estimate there are an additional 34 million barrels of oil left to recover under the leasehold from the Grayburg-San Andres formations," said Dante Caravaggio, President and CEO of HNRA. "Net Pay mapping results in estimates of original-oil-in-place on the property from the Grayburg-San Andres to be approximately 956 million barrels."
"We believe that based on historical perforations, only 44 percent of the Grayburg-San Andres had been tapped," said Jesse Allen, Vice President of Operations, HNRA. "With continued waterflood optimization, adequate uniform injection and infill drilling of 10-acre well spacing in the Seven Rivers, and now with increased drilling in the Grayburg-San Andres sands, HNRA could see a significant increase in daily production that will lead to record levels of revenue and earnings."
"When we acquired the Grayburg-Jackson field through the purchase of LH Operating, LLC, our team felt there was upside potential to increase the value of the property by increasing well spacing and by modernizing and enhancing maintenance of the field," said Joseph V. Salvucci, Sr., Chairman of the Board, HNRA. "After completing the analysis, we are exploring the recovery of so much additional potential oil to be achieved through our existing operations. The additional 34 million barrels of oil recovery is certainly a game changer, not only for the company but for the shareholders, as it will add significant value and will increase revenue and earnings for years to come."
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. HNRA's 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 its operating entity, LH Operating, LLC, 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 (NYSE American:HNRA). 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.
mike@plrinvest.com
SOURCE: HNR Acquisition Corp
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