New Era Helium Corp, a New Mexico exploration and production company, has agreed a merger with a special purpose acquisition company (SPAC) called Accretion Acquisition Corp (Energy Conversion Devices, Inc. (NASDAQ:ENER)).
Under the terms of the initial non-binding agreement, New Era is expected to hold a majority interest in the equity, on a fully diluted basis, post-merger.
E. Will Gray II, chairman and chief executive officer of New Era, only founded the company earlier this year as a scalable platform for the production of “responsibly sourced helium”.
Following its recent winning of a first off-take agreement, he said the proposed merger with Accretion “creates an aggregation model for upstream helium and positions the company as one of the first to list on a major exchange”.
The company claims to own and operate over 215,000 acres in southeast New Mexico, with more than 2.5 billion cubic feet (Bcf) of helium reserves.
New Era said natural gas is currently processed by a third-party to split it into helium and natural gas, but in July it announced that construction had begun of the Pecos Slope Plant natural gas and helium processing plant near Roswell, New Mexico, with the aim of starting operations in June next year.
Accretion chair and CEO Brad Morse pointed to growing demand for helium related to the semiconductor and aerospace sectors.