HNRC is currently doing due diligence for the proposed transaction. The company is engaging investment banks and accounting firms to assist with the due diligence and financing. The proposed investment is for up to USD $100,000,000 in cash and securities and the parties are committed to closing the transaction on or before June 30, 2022.
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 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.
https://www.prnewswire.com/news-releases/hnrc-provides-update-on-cunningham-energy-acquisition-301541923.html