Accretion Acquisition Corp. (NASDAQ:ENER) has signed a non-binding letter of intent (LOI) to combine with natural resources company New Era Helium.
The parties have not yet released any financial parameters on the deal, but they expect to execute a definitive agreement together before the end of the year.
New Era owns and operates about 137,000 acres of exploitable territory in New Mexico, which it believes contains 2.5 billion cubic feet (BCF) of helium reserves. There is currently a global shortage of the resource with total demand estimated at about 6.6 BCF annually.
A combination of factors have contributed to the shortfalls including industrial accidents at plants in Australia and Kansas, but also the fact that Russian companies and infrastructure had contributed much of the global supply to date.
New Era believes it could capture 1% of North America’s demand once it fully develops its site about 20 miles north of Roswell. It is conveniently located within six of the US’ seven helium liquification plants and adjacent to major highways.
New Era is a decidedly greenfield venture, however. The company was founded earlier this year with a launch press release dated to July.
But, it is steered by veterans of the oil and gas industry with its co-founder and Chairman Joel Solis having also founded Liberty Pump and Supply, which provides oilfield services to the Permian Basin. CEO E. Will Gray II, meanwhile, has served as an executive at a number of upstream energy firms in the region since 2005.
Accretion currently has until Christmas Day of this year to complete a combination under its current deadline, which would presumably need to be extended for this deal to work. Because there is no guarantee that this LOI makes it to the definitive agreement stage, Accretion will stay in SPACInsider’s searching column for now.
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