January 7, 2010 (FinancialWire) — 1st NRG Corp. (OTCBB: FNRC) has entered into an agreement to purchase all the outstanding stock of Cedar Resources Corp..

The terms of the agreement call for 1st NRG to pay a total of $1.5 million for Cedar Resources, a private E&P company founded in 2004 with coal bed methane assets located in the Powder River Basin of Wyoming. 1st NRG will pay $1.1 million in cash and $400,000 in stock. The agreement is subject to 1st NRG’s ability to obtain financing for the transaction and is scheduled to close on April 1, 2010 with an effective date of January 1, 2010.

Cedar Resources operates a CBM field comprised of 6,480 acres in the prolific Powder River Basin in north east Wyoming. Cedar owns an average 1.42% working interest in 36 producing wells and 51.66%, in an additional well that has been drilled, completed and is awaiting pipeline connection. Cedar Resources will continue to operate and develop the field as a wholly owned subsidiary of 1st NRG.

At a total depth of approximately 1,500 feet the wells have encountered coal seams which include the Smith (both upper & lower coal), Wyodak/Anderson, Canyon, Cook, Wall, Werner and Gates coals. Wire line logs of the producing wells demonstrate coal thickness ranging between 150 – 200 feet. Pursuant to approvals by the Wyoming Oil & Gas Commission, Cedar comingles gas produced from the Smith and Wyodak coals, leaving significant behind pipe reserves. At current prices the company estimates Cedar’s total 3P reserves to be 4.7 Bcf (billion cubic feet) which include total proved reserves of 1.7 Bcf net to the Cedar interest.

Future development plans call for drilling and completion of an additional 18 fully permitted drill sites where Cedar holds an average 1.42% working interest and 3 additional locations where Cedar holds a 51.66% working interest. There are also 8 additional locations in which Cedar holds a 33.33% working interest that are covered by permit applications expected to be approved in the second quarter of 2010. The field is relatively young, current production from the field is approximately 1,800 MCF (thousand cubic feet) gross per day. Cedar is presently cash flow positive, projecting positive cash flows from operations of $200,000 for the fiscal year ended December 31, 2009. In addition to the sale of its equity gas the company generates approximately $24,000/month in COPAS operating overhead fees from the field.

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