HNR Acquisition Corp Class A

Greetings. Welcome to the conference call of H&R Acquisition Corp. concerning financial and earning results for the second quarter ended June 30th, 2024. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Michael Porter, Investor Relations for the company. You may begin.

Thank you, Matt. Good afternoon, ladies and gentlemen. First, a forward-looking statement. This conference call includes forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. that involves risks and uncertainty that could cause actual results to differ material from what is expected. Words such as expect, believe, anticipate, intends, estimate, seeks, may, might, plan, possible, should, 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. included in the availability of all the material that you received that is listed with the Securities and Exchange Commission and can be looked under, under www.scc.gov. It is, except as expressly required by applicable security law, the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information further events, or otherwise. I'd now like to introduce you all to our CEO, Dante. The call is yours.

Thank you, Mike. I really appreciate that. Thank you all for dialing in, those who are investors in H&RA stock and those who are looking at us to potentially invest in us. So for the next 30 minutes, you're going to hear from myself, you're going to hear from Mitch Trotter, our CFO, And then you're going to hear from Jesse Allen, our vice president of operations. First of all, I'd like to just say, you know, the analysts are pegging our stock value at $4 to $7 a share. And those of you that are able to look on their screen, you can see our stock isn't at that level yet. So we think it's a tremendous value at today's pricing level. So I had to give that commercial. Q2 was much better than Q1. However, we did not deliver a profit, but it was a much smaller loss. And just like in your household budgeting, we have two choices. We can make more money or spend less money to get profitability, and we plan to do both. So our top line goal is to increase oil production. We've got a lot of optimism about what we've been doing, and I'm going to I'm going to cheat a little bit and update you a little bit beyond Q2 to tell you what's going on. So first of all, we issued a press release this morning about a test pilot of low cost chemical acid treatments that on average have double production in the wells we did that with. You're going to get all those details coming at you from Jesse. And those treatments on average cost about $5,500 a well and we've done nominally 24 wells, we've got 342 total wells. So simple math would tell you we've got a long way to go. We also developed field-specific frac procedures that cost half of what the previous owner was spending on these without any compromise on the sustainability or the maximum production that those will make. Again, you're going to hear about that from Jesse Allen. Q2 had a substantial reduction in OPEX, and we spent a lot of CAPEX on repairing and improving our field infrastructure. On average, we spent a million and a half in Q1 and another million and a half in Q2. These things together position us to increase oil production without interruption. We also negotiated with the seller A credit that also impacted our Q2 financial substantially. You're going to hear about that from Mitch. You saw some press releases. I'll just bring them up. They all fit the theme of improved infrastructure. This was improvements to our electrical system, improvements to mechanical, purchase of a hot oil machine. And all these things help us with our run time so we're not down due to well plugging or flow line plugging. And in the end, what everybody wants and certainly what all of us in the management team want and our board want is uninterrupted oil production that we sell each month on an increasing basis. And I'm happy to report the numbers are moving up. So now I'm going to talk about the outlook for Q3 and Q4. Half our story in Q3 and Q4 is going to be about improving our financials by cleaning up the overhang from the acquisition. We have a lot of professional charges from legal, from accounting, from auditing, and those are one-time costs and we've just got to pay them off. And our plan to pay those off is from increased production. The second part of what we see in Q3 and Q4 is increased oil production. And I just want to give an example what increased oil production means to us. If we increase oil production by 100 barrels a day, if you assume $70 oil and our NRI of 74%, that's $157,000 a month. If we increase it by 300 barrels a day, that's about a half million dollars a month. to our net gain. And if we increase it by 500 barrels a day, we're at 787,000 a month to our good. Just these little 24 pilot tests, chemical acid jobs, increased our production by about 100 barrels a day. So we're just beginning. But I'm telling you, we're looking forward to a major impact to our bottom line. If we went beyond Q3 and Q4 into 2025, we see 100 to 200 recompletions at a cost of about $100,000 each at an average contribution of about 50 barrels a day. And none of that involves a drill bit where the cost would just jump to a million dollars a well. So we're probably in the... late 25, early 26, before we need to drill because we see so much opportunity just laying on the ground. Now with that, I'm going to turn it over to Mitch to cover the financials.