HOUSTON, TX / ACCESSWIRE / August 21, 2024 / HNR Acquisition Corp (NYSE American:HNRA) (the "Company" or "HNRA") is an independent upstream energy company with productive oil and gas properties in the Permian Basin of New Mexico. Today, the Company announces successful oil production increases from a chemical stimulation treatment program started in late June 2024.
What is the program: A chemical stimulation treatment restimulates producing wells that had not maintained previously achieved productions levels by removing scale build-up that restricts the flow of oil. The Company started the program in late June 2024 with a pilot program of chemically treating 24 producing wells. Upon confirming the viability of this proven methodology, the Company will expand and commence chemically treating approximately 100 less than optimal producing wells as a first phase. Then the Company will assess the balance of the 342 wells.
What is the chemical treatment: Chemical stimulation is a process that increases oil production by increasing hydrocarbon flow from the reservoir into the well bore. The process for each batch of 3 to 6 wells first injects the wells with a paraffin solvent / dispersant, and then the two days later treats the well with an acid solution. The chemical stimulation being used is an innovative process introduced to the Company by our chemical supplier, Jacam Catalyst. The treatment is with a chemical blend with nano sized molecules that mobilizes hydrocarbons to increase the efficiencies of dissolving HCL (acid) soluble scales. The acid portion of this blend contains state-of-the-art corrosion inhibitors, and increased iron control capabilities to mitigate re-clogging of the oil well during the natural course of production. The chemical treatment also removes fine silts and scales, inhibits them from reappearing and increases the flow of oil.
What are the results to date: The initial results of the pilot program have been successful and very encouraging with an additional production of 80-plus BOPD. The Company is starting the first phase of the program for 100 producing wells. Based on the initial response of the 24 wells in the pilot program, we estimate the chemical treatment program to increase oil production by 250 BOPD from the chemical stimulation treatment program by the end of 2024.
"This program has resulted in a significant increase in production from these pilot wells," said Dante Caravaggio, President and CEO. Mr. Caravaggio continued with "The team, led by Jesse Allen, VP of Operations, and David O'Brian, Field Superintendent, will be expanding our chemical stimulation program to the next 100 wells we have already identified. We believe the unique combination and application of chemicals proposed by our chemical vendor for HNRA's specific needs and requirements, Jacam Catalyst, has given us a safer, better, faster, and more economical way to increase production across our 342 producers."
"These chemical and acid treatments are proving worthwhile. They are ideal for the less than optimum producing wells," said Jesse Allen, the Vice President of Operations. "The cost is relatively inexpensive, and results will last for approximately six months before retreatment or other stimulation is required. I am encouraged by the initial results" he continued.
About the Oil Field Property
In November 2023, the Company acquired LH Operating, LLC ("LHO") including its oil and gas waterflood production holdings in New Mexico comprising 13,700 contiguous leasehold acres, 342 producing wells and 207 injection wells situated on 20 federal and 3 state leases in the Grayburg-Jackson Oil Field. The Grayburg-Jackson Oil Field is located on the Northwest Shelf of the prolific Permian Basin in Eddy County, New Mexico.
Leasehold rights of LHO, a wholly owned subsidiary of the Company, include the Seven Rivers, Queen, Grayburg and San Andres intervals that range from as shallow as 1,500 feet to 4,000 feet in depth. The December 2023 reserve report from our third-party engineer, William H. Cobb and Associates, Inc. ("Cobb"), reflects LHO to have proven reserves of approximately 15.4 million barrels of oil and 3.5 billion cubic feet of natural gas. The mapped original-oil-in-place ("OOIP") in the LHO leasehold is approximately 876 million barrels of oil in the Grayburg and San Andres intervals and 80 million barrels in the Seven Rivers interval for a total OOIP of approximately 956,000,000 barrels of oil.
Our primary production is currently from the Seven Rivers zone. In addition to proven reserves, the Company believes we may access an additional 34 million barrels of oil by adding perforations in the Grayburg and San Andres formations. With proven oil reserves of over 15 million barrels, combined with the potential 34 million additional barrels from the Grayburg and San Andres zones, LHO should produce oil and a revenue stream for more than two decades with a slow decline rate.
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.
HNRA's Class A Common Stock trades on the NYSE American (NYSE American: HNRA) and our public warrants trade on the NYSE American (NYSE American: HNRAW). For more information on HNRA, please visit the Company's website: https://www.hnra-nyse.com/
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 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. [email protected]