Houston Natural Resources Corp. (HNRC) plans to rebrand after acquiring full ownership of Appalachian Basin E&P Cunningham Energy.
Houston Natural Resources acquired a 100% interest in Charleston, West Virginia-based Cunningham Energy LLC by issuing common and preferred stock, the companies announced on July 11.
In this blog post, we provide a professional summary of the article published by Chris Matthews at Hart Energy, which delves into the details of the acquisition and Houston Natural Resources Corp.’s upcoming rebranding.
Summary:
Assuming Cunningham’s current drilling program is completed as proposed, the independently appraised value of the company’s leasehold position was $352 million as of the end of 2022, according to HNRC.
The acquisition price includes an escrow of preferred shares for certain Cunningham Energy liabilities, HNRC said.
In connection with closing the deal, HNRC plans to change its name to Cunningham Natural Resources Corp. CNRC will focus on traditional oil and gas opportunities, as well as opportunities in energy transition materials like copper and lithium.
Cunningham Energy, managed by principal and operating partner Ryan Cunningham, owns oil and gas leasehold interests on 30,000 net acres in West Virginia, according to regulatory filings.
HNRC already owned a 9.9% stake in Cunningham Energy prior to the latest deal. In September 2022, HNRC reached an agreement with Ryan Cunningham to acquire a 9% interest in the Cunningham Energy LLC for a $20,000 payment, the issuance of 3 million common shares and 3 million series B preferred shares, HNRC disclosed in regulatory filings.
The acquisition of Appalachian EP and the subsequent rebranding initiative is expected to enable Houston Natural Resources Corp. to diversify its energy portfolio and tap into the abundant natural gas resources in the Appalachian Basin. This strategic move aligns with the company’s goal of expanding its operations and providing enhanced value to its stakeholders.
As part of the company’s future phase 1 development plan, Cunningham plans to permit, drill and complete 20 horizontal wells in the Big Injun, Weir, and Berea sandstone formations to fulfill legacy drilling and lease obligations.
Cunningham identified 68 potential sites for well development on its existing leases, and the E&P plans to expand its leasehold footprint through future acquisitions and leasing.
Conclusion: Houston Natural Resources Corp.’s recent acquisition of Cunningham marks a significant milestone for the company, reinforcing its presence in the energy market. By acquiring Cunningham’s assets and leveraging its expertise, Houston Natural Resources Corp. is well-positioned to enhance its operational capabilities and expand its reach in the natural gas-rich Appalachian Basin. The accompanying rebranding initiative highlights the company’s commitment to adaptability and its pursuit of continued growth. As Houston Natural Resources Corp. evolves under its new corporate identity Cunningham Natural Resources Corp., the industry will be watching closely to see how this strategic move positions the company for future success.
Source: “Houston Natural Resources Acquires Appalachian EP, Will Rebrand” by Hart Energy. Link: [https://www.hartenergy.com/exclusives/houston-natural-resources-acquires-appalachian-ep-will-rebrand]
