HNR Acquisition Corp Class A

Good morning everyone and welcome to the HNR Acquisition Corps first quarter ended March 31, 2024 financial results. At this time all participants are in a listen only mode and we will open for questions following the presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Michael Porter, who is Director of Public Relations. Michael, over to you.

Thank you, Jenny. Good morning, everybody, and welcome to our first quarter earnings call. Before we start the call, I'd like to introduce Dante Averetti, who is President and CEO, Mitch Trotter, I'm sorry, President and CEO, Mitch Trotter, who is CFO, and Jesse Allen, who is Vice President of Operations. The forward-looking statements have to be read, and then we'll get to the formal part of our presentation. The information included in this conference call forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995 that involves risk and uncertainties that could cause actual results to differ materially from what is expected. Words such as expects, believes, anticipates, intends, estimates, seeks, et cetera, and variations in 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 statements differ related to the future events and future results based on current available information and reflect the company management's current beliefs. All the information for the Qs, the Ks, and all our documentations are listed on EDGAR and at the Security Exchange Commission's website. Without further ado, I'd like to introduce you all to Dante, our President and CEO. Good morning, Dante. Good morning, Mike. Thank you.

Welcome and thank you to all our participants. Thank you for all joining us this morning. I'd like to just start with a statement about the role of management in our board. We all work for the shareholders, which means we work for for all those shareholders that are on the call today and those prospective investors to give you a superior rate of return on your investment here. And that includes all of us that have invested in this, which is all of the board and all of the management team. We are all major investors in this endeavor. So we've put up our hard earned money to make this a big success. We also work for all our employees, and we'd like to give a shout out to those in the field, especially David O'Brien, who runs our New Mexico operations. And we want to ensure that everyone returns home safely every evening. To this point, I'm proud to report that we've had no injuries since assuming operations on November 15th of 23. So you should have in front of you our first slide, which is the My comments, and I'm going to explain first the diagram to the right, which shows our original oil in place. And myself, I'm a registered petroleum engineer, and I'll do this one time and not do this on every earnings call, but I'll do this this one time. The big oval there that looks like a pizza pie represents the total volume of oil that's in place underground within our our four main producing zones. And as you can see there, very little has been produced to date. So the previous recovery is the dark blue. The other lighter shaded colors represent our proven reserves, our additional reserves from adding perforations, additional reserves from infield drilling, and so on. And I'm just going to give you a tiny story because our chairman loves this, but The largest oil field in the world is the South Gawar Field in Saudi Arabia. It has something on the order of 170 billion barrels of oil in place. It produces today something close to 4 million barrels a day, and it's been doing that for some time. So that field has produced to date 85 billion barrels out of 170 billion barrels in place. We have just under a billion barrels in place. It's a water flood. The South Gowar Field is a water flood. We're a carbonate. The South Gowar Field is a carbonate. And our goal is to have a tremendous recovery, something on the order of 15%, 10% to 15%. The South Gowar Field has already exceeded 50% in a carbonate under a water flood. We're a carbonate under a water flood. The main zone of focus for us is the Seven Rivers Zone. You're going to hear all about that from Jesse when he gets up. And we have another prospective zone that could double, triple, quadruple our recoverable reserves in the San Andreas. You're going to hear about that as well. So that's it for that pie chart. Now you know what it means. And you know that it tells the story of future upside potential for our company. The quarter one that just finished had mixed results. We made 5.2 million in cash revenues, although we had 5.9 million in mostly non-cash and one-time costs. This depressed earnings. You're going to hear about that in a little bit. Prior to the purchase, you're going to see our decline curve was coming down from 1,400 to 1,000. And we couldn't do anything about it because it was under the previous owner's control. Now that we own it, effective November 15th, we've invested money in the field to arrest that decline, holding at about 1,000 barrels a day. And now we're reversing that decline and heading upward. You're going to hear all about workovers. You're going to hear about how we finance these workovers. And that's really our story. It's the goal to increase production over the next two to three years from 1,000 to 3,000 barrels a day. We did go to New York and visit with a lot of you, and we appreciate the time you folks spent with us. We came away with a very good feeling that we've got very interested investors that are are happy to help us, that understand the oil business, and we're grateful. We had some advice given to us that we'll follow, which is to be transparent and forthright about what we see, what's coming up, speak candidly, share often, and in return, we believe we'll have a high degree of interest. So that's New York. We just had a lot of fun there. We appreciated the New York Stock Exchange tour and the fun of being a public company. So increasing production is my main topic here. And there are a lot of things we can do to improve earnings. Increasing production is one of them. Cost control, engineering, improved maintenance, improved safety. financial engineering all those topics come into play but right now i'm focusing on increasing production and my first bullet is stabilizing production was critical because we inherited a declining field not because of field performance as much as due to mechanical failure of pipe and downhole pumps so we'll talk about that we think that we're in good shape to to tackle most of that, and it's reflected in the production, which is now leveled out to 1,000. The steps that we're taking to increase production, first of all, we have to find more working capital. We're short, and we've got many options to increase our working capital. The number one choice for us of working capital is the ground. to just simply increase production, which increases revenue, which increases working capital. However, the rate of our increased free cash flow is not to our liking, so we're going to talk about that in this call. We have mapped out and done the engineering for 70 workovers. We've identified production increases. from these 70 workovers from 400 to 800 barrels a day and we'll go into that detail the the last bullet under steps to increase production what goes hand in hand with that is proving reserves the formula to prove reserves is is prescribed by our third party engineer for the most part it's adding perforations stimulating new zones, and then demonstrating with production from these wells what is possible. And then after some period of proven production, we're granted an increase in our proven, developed, producing reserves, which is our measure of, I'll say, future life. Today, we have 15 million in proven reserves. Our intent is to increase that to $50 million over the next six months. So in summary, Q1, mixed, disappointing, but with good explanation. Q2 will be much improved. Q3 and Q4, much improved beyond that. So with that, I'm going to pass it over to Mitch Trotter, our CFO, to give you the financial details. Mitch?