DENVER, April 15, 2013 /PRNewswire/ -- 1st NRG Corp. (OTC Markets: FNRC.PK, http://1stnrg-corp.com) releases an update on the company.
In January 2011 1st NRG Corp closed a transaction with nine qualified investors pursuant to which the Investors purchased a private placement of Units consisting of Preferred Shares and Warrants to purchase Common Shares. The total Unit purchase was $14,452,014.45 (16,057.79 per Unit) and $14,445,264 is currently reflected on the Company's Balance Sheet as restricted cash. The Preferred Shares were converted into the Company's Common Shares in October 2012. To date releases of approximately $25,000 relating to this agreement have been disbursed.
There are provisions within the agreement to ensure a smooth and timely release of funds in the event that 1) trading volume is below minimums, and 2) average bid prices are above or below the minimums. Originally trading volumes at or above pre-determined minimum bid price were designed to release a percentage of periodic "Breakout" funds to the Company. The Company has been trading sufficient volume but the recent decline in the share price has restricted the orderly release of funds.
In light of the current trading price of our stock, the Company is negotiating amendments to the terms of the financing with the Investors to facilitate further fund releases.
CBM – Northern Wyoming
The recent rise in natural gas prices may enable the Company to initiate a plan of development which will include completing coals currently behind pipe, working over existing wells and drilling our permitted locations. We have an average interest in the current 42 producing wells of approximately 3%, however we hold a 66% working interest in the 8 offsetting permitted locations. In 2012, we received an average price per mcf of $2.41 and the current futures indicate an average CIG price for 2013 of $3.90 per mcf. Nationwide, natural gas production has decreased 1.157 bcfd from a high in November 2012 when compared to the EIA numbers released for January 2013, and correspondingly the number of drilling rigs exploring for natural gas is at levels not seen since 1999. And to date, net withdrawals from natural gas storage are 480 bcf more than the average of the corresponding period of the previous three years.
Our current CBM properties are characterized by what we believe to be low geologic risk and repeatable development opportunity. All of our wells drilled have encountered developed coal seams in the Warner, Upper and Lower Smith, Wyodak/Anderson Lower, Gates and Wall formations. Most of the wells are comingled, producing from the Upper and Lower Smith and the Wyodak/Anderson. We anticipate using funds released from our financing discussed above to facilitate the 2013 CBM plan.
Utica Shale – Eastern Ohio
The Company has an agreement to develop approximately 7,150 acres in Eastern Ohio, one of the most active areas for oil, natural gas and natural gas liquids exploration in the United States. We are currently seeking a partner to develop the prospect.
See the company website for updates, at http://1stnrg-corp.com
Forward-Looking Statement
This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words "expects," "projects," "plans," "feels," "anticipates" and certain of the other foregoing statements may be deemed "forward-looking statements." Although 1st NRG believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release.
SOURCE 1st NRG Corp.
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