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Texas  + State of Texas  + Industrial  |  May 28, 2021
Lisa Brown
By: Lisa Brown

HNRC Strategy May Include Subsidiary Spin-Off

Houston Natural Resources Corp. (HNRC) currently has a total of $9.67 per share in assets. The company’s net asset value is $4.71 per share for the period ending March 31, 2021.

In addition, the company’s subsidiary Houston Natural Resources Inc. (HNRI) has an independently appraised value of $69 million in proven reserves that are valued at $4.47 per share.

HNRI has acquired approximately 2,800 acres of oil and gas leases located in the Halff Oil Field in Crockett County, TX. HNRI is currently reviewing possible acquisitions of producing oil and gas properties in addition to operating its water treatment facilities operated by its subsidiary HNR Oil Services LLC.

The company intends to focus on realizing the value on the $9.67 per share in assets held by its subsidiaries for the benefit of the shareholders. The strategy may include asset sales, a spin-off of one or more of its subsidiaries and dividends to shareholders.

The company projects total combined revenues of $23 million and $12 million in earnings for the year ending December 31, 2021. The forward earnings per share are projected to be $0.77c per share. According to industry research, the S&P 500 Integrated Oil and Gas Index, forward earnings and valuation as of May 25, 2021 is between 8x and 14x forward earnings. This would imply a target value for HNRC of $6.16 per share and $10.78 per share.

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.
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