Pryor Cashman client HNR Acquisition Corp (“HNRA”), a Delaware special purpose acquisition company (“SPAC”), acquired 100% of the equity of Pogo Resources (with its subsidiaries, “Pogo”), an oil and gas company with interests in the Grayburg-Jackson oil field on the Northwest Shelf of the Permian Basin in Eddy County, New Mexico.

The aggregate consideration consisted of (a) cash in the amount of approximately $33 million in immediately available funds; (b) 2 million Class B common units of a newly organized subsidiary of HNRA (“Opco”) valued at $10.00 per unit, which are exchangeable into 2 million shares of HNRA Class A Common Stock; (c) 2 million shares of voting Class B Common Stock having no economic rights (each share of which shall be surrendered as each Opco Class B common unit is exchanged for HNRA Class A Common Stock); and (d) a $15 million seller note and (e) 1.5 million preferred units of OpCo, initially valued at $10.00 per unit and convertible in 2 years. In addition, HNRA entered into an option to purchase the overriding royalty interest (ORRI) from Seller related to the wells for $30 million. The total consideration to the seller was valued at $120 million.

Pogo’s holdings comprise 13,700 contiguous leasehold acres, 343 producing wells, and 207 injection wells for a total of 550 wells, and current production is approximately 1,400 barrels of oil and oil equivalent per day. According to the United States Geological Survey, the Northwest Shelf contains the largest recoverable reserves among all the unconventional basins in the United States. Management expects to increase daily production to nearly 4,000 barrels of oil and oil equivalent in the next three years.

HNRA was represented in the transaction by Partner Matthew Ogurick, with key assistance from Partners Kyle Miller and Michael Campoli; Counsel Taylor Weinstein; Associates Brian Dunlay, Dara Smith, and Nigel Frank; and Paralegal Toma Brown.

The team handled all legal aspects of the transaction including, without limitation, negotiation of the business combination agreement and subsequent amendments, negotiation and finalization of a seller’s note and the option agreement for the ORRI, instruments and agreements to implement an “up-C” tax restructuring and other ancillary documents, SEC regulatory matters including preparation and filing of a proxy statement for stockholder approval of the business combination among other items, proxy statements for stockholder approval to extend the Termination Date of the SPAC, negotiation with investors for working capital and non-redemption agreements and forward purchase agreements, negotiation and closing of requisite debt financing and the settlement of certain working capital debt for equity, regulatory approval of NYSE American for continued/initial listing of HNRA’s common stock, and ongoing SEC compliance advice including preparation of Exchange Act filings, and a post-closing Super 8-K.

Upon closing the business combination on November 15, 2023, the Class A Common Stock of HNRA commenced trading with the combined business of SPAC and Pogo on November 16, 2023, under the existing ticker symbol “HNRA.”