UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
HNR ACQUISITION CORP
(Name of Issuer)
Class A Common Stock, par value $0.0001 per
share
(Title of Class of Securities)
40472A102
(CUSIP Number)
Kirk Pogoloff
c/o Pogo Royalty, LLC
4809 Cole Avenue, Suite 200
Dallas, TX 75205
(214) 871-6812
With a copy to:
Bryan Henderson
Baker Botts L.L.P.
2001 Ross Avenue, Suite 900
Dallas, TX 75201
November 15, 2023
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box. ☐
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to
be sent.
| * | The remainder of this cover page
shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for
any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall
not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise
subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 40472A102
1. |
Name of Reporting Person
Pogo Royalty, LLC |
2. |
Check the Appropriate Box if a Member of a Group
(a) ☐
(b) ☐ |
3. |
SEC Use Only
|
4. |
Source of Funds
OO |
5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
☐ |
6. |
Citizenship or Place of Organization
Texas |
Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
7. |
Sole Voting Power
0 |
8. |
Shared Voting Power
2,010,000(1) |
9. |
Sole Dispositive Power
0 |
10. |
Shared Dispositive Power
2,010,000(1) |
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,010,000(1) |
12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ |
13. |
Percent of Class Represented by Amount in Row (11)
29.1%(2) |
14. |
Type of Reporting Person
OO |
(1) | Pogo Royalty, LLC, a Texas limited
liability company (“Pogo Royalty”), directly holds (i) 1,800,000 shares of Class B common stock, $0.0001 par value per share
(“Class B Common Stock”), of HNR Acquisition Corp, a Delaware corporation (the “Issuer”), and an equivalent number
of Class B common units (the “OpCo Class B Units”) of HNRA Upstream, LLC, a Delaware limited liability company (“OpCo”),
which together are exchangeable for shares of Class A common stock, $0.0001 par value per share (“Class A Common Stock”)
on a one-for-one basis, of the Issuer and (ii) 210,000 shares of Class A Common Stock of the Issuer (such shares of Class A Common Stock
referenced in (i) and (ii) above, the “Reported Securities”). |
(2) | Calculated based on an assumed
combined total of 6,897,009 shares of common stock outstanding. This assumed combined total outstanding of the Issuer (i) consists of
5,097,009 shares of Class A Common Stock outstanding as of November 16, 2023, as reported on the Issuer’s Form 8-K filed with the
Securities and Exchange Commission (the “Commission”) on November 21, 2023, and (ii) assumes that all 1,800,000 shares of
Class B Common Stock directly held by Pogo Royalties (along with an equivalent number of OpCo Class B Units) were exchanged for newly-issued
shares of Class A Common Stock on a one-for-one basis. |
CUSIP No. 40472A102
1. |
Name of Reporting Person
CIC Pogo LP |
2. |
Check the Appropriate Box if a Member of a Group
(a) ☐
(b) ☐ |
3. |
SEC Use Only
|
4. |
Source of Funds
OO |
5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
☐ |
6. |
Citizenship or Place of Organization
Delaware |
Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
7. |
Sole Voting Power
0 |
8. |
Shared Voting Power
2,010,000(1) |
9. |
Sole Dispositive Power
0 |
10. |
Shared Dispositive Power
2,010,000(1) |
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,010,000(1) |
12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ |
13. |
Percent of Class Represented by Amount in Row (11)
29.1%(2) |
14. |
Type of Reporting Person
PN |
| (1) | CIC Pogo LP, a Delaware limited
partnership (“CIC Pogo”), is the controlling member of Pogo Royalty. Pogo Royalty directly holds the Reported Securities
(see Footnote 1 on Page 2 above). Therefore, CIC Pogo LP may be deemed to beneficially own all or a portion of the Reported Securities
that are directly held by Pogo Royalty. This statement shall not be deemed an admission that CIC Pogo is the beneficial owner of the
Reported Securities for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or any other purpose. |
| (2) | Calculated based on an assumed
combined total of 6,897,009 shares of common stock outstanding. This assumed combined total outstanding of the Issuer (i) consists of
5,097,009 shares of Class A Common Stock outstanding as of November 16, 2023, as reported on the Issuer’s Form 8-K filed with Commission
on November 21, 2023, and (ii) assumes that all 1,800,000 shares of Class B Common Stock directly held by Pogo Royalties (along with
an equivalent number of OpCo Class B Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. |
CUSIP No. 40472A102
1. |
Name of Reporting Person
CIC IV GP LLC |
2. |
Check the Appropriate Box if a Member of a Group
(a) ☐
(b) ☐ |
3. |
SEC Use Only
|
4. |
Source of Funds
OO |
5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
☐ |
6. |
Citizenship or Place of Organization
Delaware |
Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
7. |
Sole Voting Power
0 |
8. |
Shared Voting Power
2,010,000(1) |
9. |
Sole Dispositive Power
0 |
10. |
Shared Dispositive Power
2,010,000(1) |
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,010,000(1) |
12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ |
13. |
Percent of Class Represented by Amount in Row (11)
29.1%(2) |
14. |
Type of Reporting Person
OO |
| (1) | CIC IV GP LLC, a Delaware limited
liability company (“CIC GP”), is the general partner of CIC Pogo, which is the controlling member of Pogo Royalty. Pogo Royalty
directly holds the Reported Securities (see Footnote 1 on Page 2 above). Therefore, CIC GP may be deemed to beneficially own all or a
portion of the Reported Securities that are directly held by Pogo Royalty. This statement shall not be deemed an admission that CIC GP
is the beneficial owner of the Reported Securities for the purposes of Section 13(d) of the Exchange Act, or any other purpose. |
| (2) | Calculated based on an assumed
combined total of 6,897,009 shares of common stock outstanding. This assumed combined total outstanding of the Issuer (i) consists of
5,097,009 shares of Class A Common Stock outstanding as of November 16, 2023, as reported on the Issuer’s Form 8-K filed with Commission
on November 21, 2023, and (ii) assumes that all 1,800,000 shares of Class B Common Stock directly held by Pogo Royalties (along with
an equivalent number of OpCo Class B Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. |
CUSIP No. 40472A102
1. |
Name of Reporting Person
CIC Partners Firm LP |
2. |
Check the Appropriate Box if a Member of a Group
(a) ☐
(b) ☐ |
3. |
SEC Use Only
|
4. |
Source of Funds
OO |
5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
☐ |
6. |
Citizenship or Place of Organization
Delaware |
Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
7. |
Sole Voting Power
0 |
8. |
Shared Voting Power
2,010,000(1) |
9. |
Sole Dispositive Power
0 |
10. |
Shared Dispositive Power
2,010,000(1) |
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,010,000(1) |
12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ |
13. |
Percent of Class Represented by Amount in Row (11)
29.1%(2) |
14. |
Type of Reporting Person
PN |
| (1) | CIC Partners Firm LP, a Delaware
limited partnership (“Firm LP”), is the sole member of CIC GP, which is the general partner of CIC Pogo, which is the controlling
member of Pogo Royalty. Pogo Royalty directly holds the Reported Securities (see Footnote 1 on Page 2 above). Therefore, Firm LP may
be deemed to beneficially own all or a portion of the Reported Securities that are directly held by Pogo Royalty. This statement shall
not be deemed an admission that Firm LP is the beneficial owner of the Reported Securities for the purposes of Section 13(d) of
the Exchange Act, or any other purpose. |
| (2) | Calculated based on an assumed
combined total of 6,897,009 shares of common stock outstanding. This assumed combined total outstanding of the Issuer (i) consists of
5,097,009 shares of Class A Common Stock outstanding as of November 16, 2023, as reported on the Issuer’s Form 8-K filed with Commission
on November 21, 2023, and (ii) assumes that all 1,800,000 shares of Class B Common Stock directly held by Pogo Royalties (along with
an equivalent number of OpCo Class B Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. |
CUSIP No. 40472A102
1. |
Name of Reporting Person
CIC Partners Firm GP LLC |
2. |
Check the Appropriate Box if a Member of a Group
(a) ☐
(b) ☐ |
3. |
SEC Use Only
|
4. |
Source of Funds
OO |
5. |
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
☐ |
6. |
Citizenship or Place of Organization
Delaware |
Number of
Shares
Beneficially
Owned by
Each
Reporting
Person
With |
7. |
Sole Voting Power
0 |
8. |
Shared Voting Power
2,010,000(1) |
9. |
Sole Dispositive Power
0 |
10. |
Shared Dispositive Power
2,010,000(1) |
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,010,000(1) |
12. |
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
☐ |
13. |
Percent of Class Represented by Amount in Row (11)
29.1%(2) |
14. |
Type of Reporting Person
OO |
| (1) | CIC Partners Firm GP LLC, a Delaware
limited liability company (“CIC Firm GP”), is the general partner of Firm LP, which is the sole member of CIC GP, which is
the general partner of CIC Pogo, which is the controlling member of Pogo Royalty. Pogo Royalty directly holds the Reported Securities
(see Footnote 1 on Page 2 above). Therefore, CIC Firm GP may be deemed to beneficially own all or a portion of the Reported Securities
that are directly held by Pogo Royalty. This statement shall not be deemed an admission that CIC Firm GP is the beneficial owner of the
Reported Securities for the purposes of Section 13(d) of the Exchange Act, or any other purpose. |
| (2) | Calculated based on an assumed
combined total of 6,897,009 shares of common stock outstanding. This assumed combined total outstanding of the Issuer (i) consists of
5,097,009 shares of Class A Common Stock outstanding as of November 16, 2023, as reported on the Issuer’s Form 8-K filed with Commission
on November 21, 2023, and (ii) assumes that all 1,800,000 shares of Class B Common Stock directly held by Pogo Royalties (along with
an equivalent number of OpCo Class B Units) were exchanged for newly-issued shares of Class A Common Stock on a one-for-one basis. |
Item 1. Security and Issuer
This statement on Schedule 13D (the “Schedule
13D”) relates to the shares of Class A common stock, $0.0001 par value per share (“Class A Common Stock”) of HNR Acquisition
Corp, a Delaware corporation (the “Issuer”). The principal executive office of the Issuer is located at 3730 Kirby Drive,
Suite 1200, Houston, TX 77098. The Issuer’s shares of Class A Common Stock are listed on the NYSE American under the symbol “HNRA”.
Item 2. Identity and Background
This Schedule 13D is being filed by Pogo Royalty,
LLC, a Texas limited liability company (“Pogo Royalty”), CIC Pogo LP, a Delaware limited partnership (“CIC Pogo”),
CIC IV GP LLC, a Delaware limited liability company (“CIC GP”), CIC Partners Firm LP, a Delaware limited partnership (“CIC
Firm LP”) and CIC Partners Firm GP LLC, a Delaware limited liability company (“CIC Firm GP”). Pogo Royalty, CIC Pogo,
CIC GP, CIC Firm LP and CIC Firm GP are sometimes referred to in this Schedule 13D individually as a “Reporting Person” and,
collectively, they are referred to herein as the “Reporting Persons.” CIC Pogo, CIC GP and CIC Firm LP, collectively, are
referred to herein as the “CIC Entities.”
The principal business of Pogo Royalty is its investment
in the securities of the Issuer. The principal business of each of the CIC Entities and CIC Firm GP is to either invest in securities
or serve as a general partner or management company of an entity that invests in securities. The address of the principal office of Pogo
Royalty is 4809 Cole Avenue, Suite 200, Dallas, TX 75205. The address of the principal office of the CIC Entities and CIC Firm GP is 3879
Maple Avenue, Suite 400, Dallas, Texas, 75219.
Information regarding the executive officers, managers
or other control persons of Pogo Royalty, the CIC Entities and CIC Firm GP is set forth on Schedule A, Schedule B and Schedule
C, respectively, attached hereto. Schedule A, Schedule B and Schedule C attached hereto set forth the following
information as to each such person:
| (ii) | residence or business address; |
| (iii) | present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such employment is conducted; and |
During the last five years, to the best of the
Reporting Person’s knowledge, no person named on Schedule A, Schedule B or Schedule C attached hereto, has been (a) convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect
to such laws.
Item 3. Source and Amount of Funds or Other Consideration
On November 15, 2023, the Issuer consummated the
previously announced acquisition (the “Closing”) pursuant to that certain Amended and Restated Membership Interest Purchase
Agreement, dated as of August 28, 2023 (the “A&R MIPA”), by and among CIC Pogo, DenCo Resources, LLC, a Texas limited
liability company (“DenCo”), Pogo Resources Management, LLC, a Texas limited liability company (“Pogo Management”),
4400 (together with CIC Pogo, DenCo and Pogo Management, collectively, “Seller” and each a “Seller”), the Issuer,
HNRA Upstream, LLC, a Delaware limited liability company (“OpCo”), HNRA Partner, Inc., a Delaware corporation (together with
the Issuer and OpCo, collectively, “Buyer” and each a “Buyer”) and, solely with respect to Section 6.20 of the
A&R MIPA, HNRAC Sponsors LLC, a Delaware limited liability company (“Sponsor”). Immediately upon the Closing and pursuant
to its terms, OpCo (i) issued 2,000,000 Class B common units of OpCo (the “OpCo Class B Units”), equal to and exchangeable
into 2,000,000 shares of Class A Common Stock, (ii) issued 1,500,000 preferred units (the “OpCo Preferred Units”), convertible
into OpCo Class B Units pursuant to the terms of the A&R OpCo LLC Agreement and (iii) sold, contributed, assigned and conveyed 2,000,000
shares of Class B common stock, par value $0.0001 per share, of the Issuer (the “Class B Common Stock”), to Pogo Royalty.
The foregoing description of the A&R MIPA is not complete and is qualified in its entirety by reference to the copy thereof filed
as Exhibit 2.2 hereto, which is incorporated herein by reference.
In connection with the Closing, HNRA Royalties,
LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Issuer (“HNRA Royalties”) and Pogo Royalty
entered into that certain Option Agreement, dated as of November 15, 2023. Pogo Royalty owns certain overriding royalty interests in certain
oil and gas assets owned by Pogo Resources, LLC (the “ORR Interest”). Pursuant to the Option Agreement, in exchange for 10,000
shares of Class A Common Stock, Pogo Royalty granted an irrevocable and exclusive option to HNRA Royalties to purchase the ORR Interest
for the Option Price (as defined below) at any time prior to November 15, 2024. The purchase price for the ORR Interest upon exercise
of the option is: (i) (1) $30,000,000 the (“Base Option Price”), plus (2) an additional amount equal to interest on the Base
Option Price of twelve percent (12%), compounded monthly, from November 15, 2023 through the date of acquisition of the ORR Interest,
minus (ii) any amounts received by Pogo Royalty in respect of the ORR Interest from the month of production in which the effective date
of the Option Agreement occurs through the date of the exercise of the option (such aggregate purchase price, the “Option Price”).
The Option Agreement and the option will immediately terminate upon the earlier of (a) Pogo Royalty’s transfer or assignment of
all of the ORR Interest in accordance with the Option Agreement and (b) November 15, 2024. The foregoing description of the Option Agreement
is not complete and is qualified in its entirety by reference to the copy thereof filed as Exhibit 10.1 hereto, which is incorporated
herein by reference.
In connection with the Closing, Pogo exercised
the OpCo Exchange Right (as defined below) as it relates to 200,000 shares of Class B Common Stock and 200,000 OpCo Class B Units.
The information set forth in Item 4 and Item 6 of this Schedule 13D
is incorporated by reference herein.
Item 4. Purpose of Transaction
The Reporting Persons intend to review their investment
in the Issuer on an ongoing basis and, in the course of their review, may take actions (including through one or more of their affiliates)
with respect to their investment or the Issuer, including communicating with the board of directors of the Issuer (the “Board”),
members of management or other security-holders of the Issuer, or other third parties from time to time, and taking steps to explore,
prepare for or implement a course of action, including, without limitation, engaging advisors, including legal, financial, regulatory,
technical and/or industry advisors, to assist in any review, evaluating strategic alternatives as they may become available and entering
into confidentiality, standstill or other similar agreements with the Issuer, its subsidiaries and/or any advisors or third parties. Such
discussions and other actions may relate to, subject to the terms and conditions of the documents described herein to which the Reporting
Persons are a party, various alternative courses of action, including, without limitation, those related to an extraordinary corporate
transaction (including, but not limited to a merger, reorganization or liquidation) involving the Issuer or any of its subsidiaries; business
combinations involving the Issuer or any of its subsidiaries; a sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries; material asset purchases; the formation of joint ventures with the Issuer or any of its subsidiaries or the entry into
other material projects; changes in the present business, operations, strategy, future plans or prospects of the Issuer, financial or
governance matters; changes to the Board (including Board composition) or management of the Issuer; acting as a participant in debt or
equity financings of the Issuer or any of its subsidiaries; changes to the capitalization, ownership structure, dividend policy, business
or corporate structure or governance documents of the Issuer; de-listing or de-registration of the Issuer’s securities, or any action
similar to those enumerated above. The Reporting Persons may participate in an auction or similar process regarding any such courses of
action (including, but not limited to, an extraordinary corporate transaction) with respect to the Issuer or its subsidiaries, including
submitting an indication of interest, letter of intent, term sheet, offer letter or other similar expression of interest and in connection
therewith; engaging advisors; communicating with the Issuer, its subsidiaries and other third parties (including various advisors), taking
actions regarding prospective financing for any such course of action, including, without limitation, exchanging information, negotiating
terms and entering into commitment letters and related agreements and/or any other similar agreements; and preparing, revising, negotiating
into agreements with Issuer and its subsidiaries. Such discussions and actions may be preliminary and exploratory in nature, and not rise
to the level of a plan or proposal.
In connection with the Closing, the Issuer entered
into that certain Director Nomination and Board Observer Agreement (the “Board Designation Agreement”) with CIC Pogo. Pursuant
to the Board Designation Agreement, CIC Pogo has the right, at any time CIC Pogo beneficially owns capital stock of the Issuer, to appoint
two board observers to attend all meetings of the board of directors of the Issuer. In addition, after the time of the conversion of the
OpCo Preferred Units owned by Pogo Royalty, CIC Pogo will have the right to nominate a certain number of members of the Board depending
on Pogo Royalty’s ownership percentage of Class A Common Stock as further provided in the Board Designation Agreement. The foregoing
description of the Board Designation Agreement is not complete and is qualified in its entirety by reference to the copy thereof filed
as Exhibit 10.5 hereto, which is incorporated herein by reference.
Except to the extent the foregoing may be deemed
a plan or proposal, the Reporting Persons do not have any current plans or proposals which relate to, or could result in, any of the matters
referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time
to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.
The information set forth in Items 5 and 6 of this Schedule 13D is
incorporated by reference herein.
Item 5. Interest in Securities of the Issuer
(a)-(b) The
information contained on the cover pages to this Schedule 13D is incorporated herein by reference.
Pogo Royalty directly holds (i) 1,800,000 shares
of Class B Common Stock and an equivalent number of OpCo Class B Units, which together are exchangeable for shares of Class A Common Stock
and (ii) 210,000 shares of Class A Common Stock (such shares of Class A Common Stock referenced in (i) and (ii) above, the “Reported
Securities”). CIC Pogo, in its capacity as the controlling member of Pogo Royalty, has the ability to direct the management of Pogo
Royalty’s business regarding the vote and disposition of securities held by Pogo Royalty; therefore for
the purposes of Rule 13d-3 promulgated under the Exchange Act, CIC Pogo may be deemed to have indirect beneficial ownership
of the Reported Securities owned by Pogo Royalty. CIC GP, in its capacity as general partner of CIC Pogo, has the ability to direct the
management of CIC Pogo’s business regarding the vote and disposition of securities held by Pogo Royalty; therefore for
the purposes of Rule 13d-3 promulgated under the Exchange Act, CIC GP may be deemed to have indirect beneficial ownership of
the Reported Securities owned by Pogo Royalty. CIC Firm LP, in its capacity as sole member of CIC GP, has the ability to direct the management
of CIC GP’s business regarding the vote and disposition of securities held by Pogo Royalty; therefore for
the purposes of Rule 13d-3 promulgated under the Exchange Act, CIC Firm LP may be deemed to have indirect beneficial ownership
of the Reported Securities owned by Pogo Royalty. CIC Firm GP, in its capacity as general partner of CIC Firm LP, has the ability to direct
the management of CIC Firm LP’s business regarding the vote and disposition of securities held by Pogo Royalty; therefore for
the purposes of Rule 13d-3 promulgated under the Exchange Act, CIC Firm GP may be deemed to have indirect beneficial ownership
of the Reported Securities owned by Pogo Royalty.
The filing of this statement shall not be construed
as an admission by any Reporting Person that such person is, for the purposes of sections 13(d) or 13(g) of the Exchange Act, the beneficial
owner of any securities covered by this statement.
(c) The information provided or incorporated by
reference in Item 3 is incorporated by reference herein.
(d) No person other than the Reporting Persons
have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Class
A Common Stock reported on this Schedule 13D.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
The information provided or incorporated by reference in Items 3 and
4 is incorporated by reference herein.
First Amendment to Amended and Restated Membership Interest Purchase
Agreement
On November 15, 2023, Buyer, Seller and Sponsor
entered into that certain First Amendment to Amended and Restated Membership Interest Purchase Agreement (the “MIPA Amendment”),
pursuant to which Buyer, Seller and Sponsor agreed to extend the outside date for the transaction to November 30, 2023, and to place 500,000
shares of Class B Common Stock into escrow instead of 500,000 OpCo Class B Units. The foregoing description of the MIPA Agreement is not
complete and is qualified in its entirety by reference to the copy thereof filed as Exhibit 2.2 hereto, which is incorporated herein by
reference.
Option Agreement
In connection with the Closing, HNRA Royalties and Pogo Royalty entered
into the Option Agreement. Pogo Royalty owns certain overriding royalty interests in certain oil and gas assets owned by Pogo (the “ORR
Interest”). Pursuant to the Option Agreement, in exchange for 10,000 shares of Class A Common Stock, Pogo Royalty granted an irrevocable
and exclusive option to HNRA Royalties to purchase the ORR Interest for the Option Price (as defined below) at any time prior to November
15, 2024.
The purchase price for the ORR Interest upon exercise of the option
is: (i) (1) $30,000,000 the (“Base Option Price”), plus (2) an additional amount equal to interest on the Base Option Price
of twelve percent (12%), compounded monthly, from November 15, 2023 through the date of acquisition of the ORR Interest, minus (ii) any
amounts received by Pogo Royalty in respect of the ORR Interest from the month of production in which the effective date of the Option
Agreement occurs through the date of the exercise of the option (such aggregate purchase price, the “Option Price”).
The Option Agreement and the option will immediately terminate upon
the earlier of (a) Pogo Royalty’s transfer or assignment of all of the ORR Interest in accordance with the Option Agreement and
(b) November 15, 2024. The foregoing description of the Option Agreement is not complete and is qualified in its entirety by reference
to the copy thereof filed as Exhibit 10.1 hereto, which is incorporated herein by reference.
OpCo A&R LLC Agreement
In connection with the Closing, the Issuer and Pogo Royalty, entered
into an amended and restated limited liability company agreement of OpCo (the “A&R OpCo LLC Agreement”). Pursuant to the
A&R OpCo LLC Agreement, each OpCo unitholder (excluding the Issuer) will, subject to certain timing procedures and other conditions
set forth therein, have the right (the “OpCo Exchange Right”) to exchange all or a portion of its OpCo Class B Units for,
at OpCo’s election, (i) shares of Class A Common Stock at an exchange ratio of one share of Class A Common Stock for each OpCo Class
B Unit exchanged, subject to conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions,
or (ii) an equivalent amount of cash. Additionally, the holders of OpCo Class B Units will be required to exchange all of their OpCo Class
B Units (a “Mandatory Exchange”) upon the occurrence of the following: (i) upon the direction of the Issuer with the consent
of at least fifty percent (50%) of the holders of OpCo Class B Units; or (ii) upon the one-year anniversary of the Mandatory Conversion
Trigger Date (as defined below). In connection with any exchange of OpCo Class B Units pursuant to the OpCo Exchange Right or acquisition
of OpCo Class B Units pursuant to a Mandatory Exchange, a corresponding number of shares of Class B Common Stock held by the relevant
OpCo unitholder will be cancelled.
The OpCo Preferred Units will be automatically converted into OpCo
Class B Units on the two-year anniversary of the issuance date of such OpCo Preferred Units (the “Mandatory Conversion Trigger Date”)
at a rate determined by dividing (i) $20.00 per unit (the “Stated Conversion Value”), by (ii) the Market Price of the Class
A Common Stock (the “Conversion Price”). The “Market Price” means the simple average of the daily VWAP of the
Class A Common Stock during the five (5) trading days prior to the date of conversion. On the Mandatory Conversion Trigger Date, the Issuer
will issue a number of shares of Class B Common Stock to Pogo Royalty equivalent to the number of OpCo Class B Units issued to Pogo Royalty.
If not exchanged sooner, such newly issued OpCo Class B Units shall automatically exchange into Class A Common Stock on the one-year anniversary
of the Mandatory Conversion Trigger Date at a ratio of one OpCo Class B Unit for one share of Class A Common Stock. An equivalent number
of shares of Class B Common Stock must be surrendered with the OpCo Class B Units to the Company in exchange for the Class A Common Stock.
As noted above, the OpCo Class B Units must be exchanged upon the one-year anniversary of the Mandatory Conversion Trigger Date. The foregoing
description of the A&R OpCo LLC Agreement is not complete and is qualified in its entirety by reference to the copy thereof filed
as Exhibit 10.2 hereto, which is incorporated herein by reference.
Registration Rights Agreement
In connection with the Closing, the Issuer and Pogo Royalty entered
into that Registration Rights Agreement, dated as of November 15, 2023 (the “Registration Rights Agreement”), pursuant to
which the Issuer has agreed to provide Pogo Royalty with certain registration rights with respect to the shares of Class A Common Stock
issuable upon exercise of the OpCo Exchange Right, including (i) the filing with the Securities and Exchange Commission (the “Commission”)
of an initial registration statement on Form S-1 covering the resale by the Pogo Royalty of the shares of Class A Common Stock issuable
upon exercise of the OpCo Exchange Right so as to permit their resale under Rule 415 under the Securities Act, (ii) the use of its commercially
reasonable efforts, no later than thirty (30) days following the Closing, to have the initial registration statement declared effective
by the Commission as soon as reasonably practicable following the filing thereof with the Commission, and (iii) the use of its commercially
reasonable efforts to convert the Form S-1 (and any subsequent registration statement) to a shelf registration statement on Form S-3 as
promptly as practicable after the Issuer is eligible to use a Form S-3 shelf registration statement.
In certain circumstances, Pogo Royalty can demand the Issuer’s
assistance with underwritten offerings, and Pogo Royalty will be entitled to certain piggyback registration rights. The foregoing description
of the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the copy thereof filed as Exhibit
10.3 hereto, which is incorporated herein by reference.
Backstop Agreement
In connection with the Closing, the Issuer entered into that certain
Backstop Agreement, dated November 15, 2023 (the “Backstop Agreement”) by and among the Issuer, Pogo Royalty and certain of
the Issuer’s founders listed therein (the “Founders”), whereby the Pogo Royalty will have the right (“Put Right”)
to cause the Founders to purchase the OpCo Preferred Units at a purchase price per unit equal to $10.00 per unit plus the product of (i)
the number of days elapsed since the effective date of the Backstop Agreement and (ii) $10.00 divided by 730. Seller’s right to
exercise the Put Right will survive for six (6) months following the date the Trust Shares (as defined below) are not restricted from
transfer under the Letter Agreement (as defined in the A&R MIPA) (the “Lockup Expiration Date”).
As security that the Founders will be able to purchase the OpCo Preferred
Units upon exercise of the Put Right, the Founders agreed to place at least 1,300,000 shares of Class A Common Stock into escrow (the
“Trust Shares”), which the Founders can sell or borrow against to meet their obligations upon exercise of the Put Right, with
the prior consent of Seller. HNRA is not obligated to purchase the OpCo Preferred Units from Pogo Royalty under the Backstop Agreement.
Until the Backstop Agreement is terminated, Pogo Royalty and its affiliates are not permitted to engage in any transaction which is designed
to sell short the Class A Common Stock or any other publicly traded securities of the Issuer. The foregoing description of the Backstop
Agreement is not complete and is qualified in its entirety by reference to the copy thereof filed as Exhibit 10.4 hereto, which is incorporated
herein by reference.
Director Nomination and Board Observer Agreement
In connection with the Closing, the Issuer entered into Director Nomination
and Board Observer Agreement (the “Board Designation Agreement”) with CIC Pogo. Pursuant to the Board Designation Agreement,
CIC Pogo has the right, at any time CIC Pogo beneficially owns capital stock of the Issuer, to appoint two board observers to attend all
meetings of the board of directors of the Issuer. In addition, after the time of the conversion of the OpCo Preferred Units owned by Pogo
Royalty, CIC Pogo will have the right to nominate a certain number of members of the Board depending on Pogo Royalty’s ownership
percentage of Class A Common Stock as further provided in the Board Designation Agreement. The foregoing description of the Board Designation
Agreement is not complete and is qualified in its entirety by reference to the copy thereof filed as Exhibit 10.5 hereto, which is incorporated
herein by reference.
Item 7. Material to be Filed as Exhibits
Exhibit
Number |
|
Description |
2.1 |
|
Amended and Restated Membership Interest Purchase Agreement, dated August 28, 2023, by and among Buyer, Seller, and Sponsor (incorporated by reference to Exhibit 2.1 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on August 30, 2023). |
2.2 |
|
Amendment No. 1 to the Amended and Restated Membership Interest Purchase Agreement, dated November 15, 2023, by and among Buyer, Seller, and Sponsor (incorporated by reference to Exhibit 2.2 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on November 21, 2023). |
10.1 |
|
Option Agreement, dated November 15, 2023, by and between HNRA Royalties, LLC, Pogo Royalty, LLC, and HNR Acquisition Corp (incorporated by reference to Exhibit 10.4 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on November 21, 2023). |
10.2 |
|
Amended and Restated Limited Liability Company Agreement of HNRA Upstream, LLC, dated November 15, 2023, by and among HNRA Upstream, LLC, Pogo Royalty, LLC, and HNR Acquisition Corp (incorporated by reference to Exhibit 10.1 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on November 21, 2023). |
10.3 |
|
Registration Rights Agreement, dated November 15, 2023, by and between HNRA Acquisition Corp and Pogo Royalty, LLC (incorporated by reference to Exhibit 10.3 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on November 21, 2023). |
10.4 |
|
Backstop Agreement, dated November 15, 2023, by and among HNR Acquisition Corp, HNRA Upstream, LLC, Pogo Royalty, and the Founders that are signatory thereto (incorporated by reference to Exhibit 10.6 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on November 21, 2023). |
10.5 |
|
Director Nomination and Board Observer Agreement, dated November 15, 2023, by and between HNR Acquisition Corp and CIC Pogo, LP (incorporated by reference to Exhibit 10.5 of HNRA Acquisition Corp’s Current Report on Form 8-K, filed with the Commission on November 21, 2023). |
99.1* |
|
Joint Filing Agreement, dated as of November 24, 2023, by and among the Reporting Persons. |
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and correct.
Date: November 24, 2023
POGO ROYALTY, LLC |
|
|
|
By: |
/s/ Kirk Pogoloff |
|
Name: |
Kirk Pogoloff |
|
Title: |
Manager |
|
|
|
|
CIC POGO LP |
|
|
|
By: |
CIC IV GP LLC, its General Partner |
|
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
|
|
|
CIC IV GP LLC |
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
|
|
|
CIC PARTNERS FIRM LP |
|
|
|
|
By: |
CIC Partners Firm GP LLC, its General Partner |
|
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
|
|
|
CIC PARTNERS FIRM GP LLC |
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
Schedule A
CONTROL PERSONS OF POGO ROYALTY
The name, business address, present principal
occupation or employment and the name, principal business and address of any corporation or other organization in which such employment
is conducted, of each of the general partner and other control persons of Pogo Royalty are set forth below:
Name and Business Address |
|
Capacity in which Serves |
|
Principal
Occupation |
|
Name, Principal
Business and
Address of
Organization
in which
Principal
Occupation is
Conducted |
CIC Pogo LP
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Controlling Member of Pogo Royalty, LLC |
|
n/a |
|
n/a |
|
|
|
|
CIC IV GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
General Partner of CIC Pogo LP |
|
n/a |
|
n/a |
|
|
|
|
CIC Partners Firm LP
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Sole Member of CIC IV GP LLC |
|
n/a |
|
n/a |
|
|
|
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
General Partner of CIC Partners Firm GP LLC |
|
n/a |
|
n/a |
Schedule B
CONTROL PERSONS OF THE CIC ENTITIES
The name, business address, present principal
occupation or employment and the name, principal business and address of any corporation or other organization in which such employment
is conducted, of each of the general partner and other control persons of the CIC Entities are set forth below:
Name and Business Address |
|
Capacity in which Serves |
|
Principal
Occupation |
|
Name, Principal
Business and
Address of
Organization
in which
Principal
Occupation is
Conducted |
CIC IV GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
General Partner of CIC Pogo LP |
|
n/a |
|
n/a |
|
|
|
|
CIC Partners Firm LP
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Sole Member of CIC IV GP LLC |
|
n/a |
|
n/a |
|
|
|
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
General Partner of CIC Partners Firm GP LLC |
|
n/a |
|
n/a |
Schedule C
CONTROL PERSONS OF CIC PARTNERS FIRM GP, LLC
The name, business address, present principal
occupation or employment and the name, principal business and address of any corporation or other organization in which such employment
is conducted, of each of the general partner and other control persons of CIC Firm GP are set forth below:
Name and Business Address |
|
Capacity in which Serves |
|
Principal
Occupation |
|
Name, Principal
Business and
Address of Organization in which Principal Occupation is Conducted |
Fouad Z. Bashour
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Director |
|
Director |
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
|
|
|
Marshall B. Payne
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Director |
|
Director |
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
|
|
|
Michael S. Rawlings
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Director |
|
Director |
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
|
|
|
James C. Smith
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Director |
|
Director |
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
|
|
|
Amir Yoffe
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
|
Director |
|
Director |
|
CIC Partners Firm GP LLC
3879 Maple Avenue, Suite 400
Dallas, Texas, 75219 |
C-1
Exhibit 99.1
JOINT FILING AGREEMENT
In accordance with Rule
13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree that this statement on Schedule
13D (“Statement”) is being jointly filed, and any amendments thereafter signed by each of the undersigned shall be (unless
otherwise determined by the undersigned) jointly filed on behalf of each of the undersigned. Each of the undersigned is responsible for
the timely filing of this Statement and any amendments thereto, and for the completeness and accuracy of the information concerning such
person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons
making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Joint Filing Agreement
may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the
undersigned hereby execute this Joint Filing Agreement as of the 24th day of November, 2023.
POGO ROYALTY, LLC |
|
|
|
By: |
/s/ Kirk Pogoloff |
|
Name: |
Kirk Pogoloff |
|
Title: |
Manager |
|
|
|
|
CIC POGO LP |
|
|
|
By: |
CIC IV GP LLC, its General Partner |
|
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
|
|
|
CIC IV GP LLC |
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
|
|
|
CIC PARTNERS FIRM LP |
|
|
|
By: |
CIC Partners Firm GP LLC, its General Partner |
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Bashour |
|
Title: |
Manager |
|
|
|
|
CIC PARTNERS FIRM GP LLC |
|
|
|
|
By: |
/s/ Fouad Z. Bashour |
|
Name: |
Fouad Z. Bashour |
|
Title: |
Manager |
|
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