EON Resources Inc. Announces $22.5 Million Funding LOI With Enstream Capital
EON Resources (NYSE American:EONR) has signed a non-binding Letter of Intent with Enstream Capital Management for $22.5 million in well completion funding. The funding will support the development of 45 wells through low-cost workovers on EON's 13,700 leasehold acres in Eddy County, New Mexico. The funding structure is similar to a term overriding royalty interest and is neither debt nor equity. The company aims to increase gross oil production by 1,000-2,000 BOPD over the next 12 months. EON's property contains over one billion barrels of original oil in place across 549 wells, with production expected to begin in Q1 2025.
EON Resources (NYSE American:EONR) ha firmato una Lettera di Intenti non vincolante con Enstream Capital Management per un finanziamento di 22,5 milioni di dollari per il completamento dei pozzi. Il finanziamento supporterà lo sviluppo di 45 pozzi attraverso lavori economici su 13.700 acri di concessione di EON nella contea di Eddy, nel New Mexico. La struttura del finanziamento è simile a un interesse in royalties sovrapposte a termine ed è né debito né capitale. L'azienda mira ad aumentare la produzione totale di petrolio di 1.000-2.000 BOPD nel prossimo anno. La proprietà di EON contiene oltre un miliardo di barili di petrolio originale in loco distribuiti su 549 pozzi, con produzione prevista per iniziare nel primo trimestre del 2025.
EON Resources (NYSE American:EONR) ha firmado una Carta de Intención no vinculante con Enstream Capital Management por 22,5 millones de dólares en financiamiento para la finalización de pozos. Este financiamiento apoyará el desarrollo de 45 pozos a través de trabajos de bajo costo en 13,700 acres arrendados por EON en el condado de Eddy, Nuevo México. La estructura de financiamiento es similar a un interés de regalías por encima del término y no constituye ni deuda ni capital. La empresa busca aumentar la producción bruta de petróleo en 1,000-2,000 BOPD en los próximos 12 meses. La propiedad de EON contiene más de mil millones de barriles de petróleo original en su lugar, distribuidos en 549 pozos, con producción prevista para comenzar en el primer trimestre de 2025.
EON Resources (NYSE American:EONR)는 Enstream Capital Management와 2천250만 달러의 유정 완료 자금을 위한 비구속적 의향서를 체결했습니다. 이 자금은 뉴멕시코 주 에디 카운티의 EON의 13,700 에이커 임대 지역 내 45개의 유정을 저비용 작업을 통해 개발하는 데 지원할 것입니다. 자금 구조는 유가증권에 대한 귀속 지분과 유사하며, 부채나 자본이 아닙니다. 회사는 향후 12개월 동안 하루 1,000-2,000 배럴의 원유 생산량을 증가시키는 것을 목표로 하고 있습니다. EON의 자산은 549개의 유정에 걸쳐 10억 배럴 이상의 원유가 매장되어 있으며, 생산은 2025년 1분기에 시작될 예정입니다.
EON Resources (NYSE American:EONR) a signé une lettre d'intention non contraignante avec Enstream Capital Management pour un financement de 22,5 millions de dollars dédié à l'achèvement des puits. Ce financement soutiendra le développement de 45 puits par des travaux à faible coût sur les 13 700 acres de baux d'EON dans le comté d'Eddy, au Nouveau-Mexique. La structure de financement est similaire à un intérêt en royalties sur des termes de priorité et n’est ni de la dette ni des capitaux propres. L’entreprise vise à augmenter sa production brute de pétrole de 1 000 à 2 000 BOPD au cours des 12 prochains mois. Les terrains d'EON contiennent plus d'un milliard de barils de pétrole brut à l’endroit, répartis sur 549 puits, avec une production prévue pour débuter au premier trimestre de 2025.
EON Resources (NYSE American:EONR) hat einen nicht verbindlichen Letters of Intent mit Enstream Capital Management über 22,5 Millionen Dollar zur Fertigstellung von Bohrlöchern unterzeichnet. Die Finanzierung wird die Entwicklung von 45 Bohrlöchern durch kostengünstige Nacharbeiten auf EONs 13.700 Pachtflächen im Eddy County, New Mexico, unterstützen. Die Finanzierungsstruktur ähnelt einem terminierten Übertragungsroyaltyinteresse und ist weder Schulden noch Eigenkapital. Das Unternehmen plant, die Rohölproduktion im nächsten Jahr um 1.000-2.000 BOPD zu erhöhen. EONs Eigentum enthält über eine Milliarde Barrel ursprünglich geförderten Öls, verteilt auf 549 Bohrlöcher, wobei die Produktion voraussichtlich im ersten Quartal 2025 beginnen wird.
- Secured $22.5 million in non-dilutive well completion funding
- Funding structure preserves balance sheet strength without adding debt
- Development plan targets 1,000-2,000 BOPD production increase
- Property holds over 1 billion barrels of original oil in place
- Asset-level funding enables conversion of proved undeveloped reserves into production
- Funding agreement is non-binding (LOI stage only)
- Production sharing arrangement details remain confidential
- Production increase impact won't be realized until 2025
Insights
This
The projected increase of 1,000-2,000 BOPD in gross oil production could substantially impact revenues given current oil prices. With over 1 billion barrels of original oil in place across their 13,700-acre position, the asset base supports long-term development potential. The escrow arrangement and monthly draw structure provides solid operational controls while ensuring capital is deployed according to the agreed development plan.
The workover-focused development strategy in the Permian Basin's Eddy County is a prudent approach in the current market environment. Low-cost workovers typically offer superior returns compared to new drill programs, especially when targeting "behind pipe" zones in existing wellbores. The term overriding royalty interest structure aligns well with the asset's characteristics, providing ECM with direct exposure to production while maintaining operational control for EON.
The potential to increase production by 1,000-2,000 BOPD through workovers suggests significant untapped potential in the existing well inventory. With 549 wells across the leasehold, the
HOUSTON, TX / ACCESSWIRE / December 2, 2024 / EON Resources Inc. (NYSE American:EONR) ("EON" or the "Company") is an independent upstream energy company with oil and gas properties in the Permian Basin. Today, the Company announces the signing of a non-binding Letter of Intent with Enstream Capital Management, LLC ("ECM") for
The Company anticipates using the WCF for the development of 45 wells using low-cost workovers on the Company's 13,700 leasehold acres in Eddy County, New Mexico (the "Property"). The Company also plans to use the funds for the acquisition of an Overriding Royalty Interest in the Property.
The Company looks for key attributes of the WCF to include:
Structured similar to a term overriding royalty interest to ECM and is considered neither debt nor equity.
Provides asset-level funding to the Company enabling conversion of oil and gas "behind pipe" and lower-risk, proved undeveloped reserves into production.
Placement of revenue attributable to ECM's interest into an escrow, then drawn monthly by the Company based upon, and to be used for, an agreed development plan under certain criteria.
Increases the Company's producing reserves, business profitability, bank collateral and value, and balance sheet strength without diluting Company equity.
EON and ECM view their relationship as a long-term opportunity to provide funding for multi-phase and multi-year development of the Property with minimal capital outlays by the Company.
The details of the proposed production sharing arrangement proposed with ECM are confidential presently, but the Company's objectives will be to cause improvements in production, increase revenues, net cash flow and recoverable reserves over the next 12 months, with a goal to increase gross oil production by 1000 BOPD to 2000 BOPD.
EON has substantial development prospects to pursue follow-on identified development phases, with over one billion barrels of original oil in place under its 13,700 contiguous acreage and 549 wells on its leases.
"We expect to complete this transaction to begin production in the first quarter of 2025, and start having a positive impact on EON's financial condition in 2025 and for many years to come," said Dante Caravaggio, CEO and President of EON.
On November 18, 2024, EON announced its results for the third quarter of 2024 and posted its updated investor deck on its website. The company will hold its annual meeting on December 10, 2024.
About Enstream Capital Management, LLC
ECM is a Dallas based energy merchant banking firm that provides asset-level funding to enable oil and gas operators to convert lower risk, proven non-producing and undeveloped reserves into production and for other linked special situations. Since 2006, the firm has executed over
About the Oil Field Property
In November 2023, the Company acquired LH Operating, LLC ("LHO") including its holdings in New Mexico of oil and gas waterflood production comprising 13,700 contiguous leasehold acres, 342 producing wells and 207 injection wells situated on 20 federal and 3 state leases in the Grayburg-Jackson Oil Field. The Grayburg-Jackson Oil Field is located on the Northwest Shelf of the prolific Permian Basin in Eddy County, New Mexico.
Leasehold rights of LHO, now a wholly owned subsidiary of the Company, include the Seven Rivers, Queen, Grayburg and San Andres intervals that range from as shallow as 1,500 feet to 4,000 feet in depth. The December 2023 reserve report from our third-party engineer, William H. Cobb and Associates, Inc. ("Cobb"), reflects LHO to have proven reserves of approximately 15.4 million barrels of oil and 3.5 billion cubic feet of natural gas. The mapped original-oil-in-place ("OOIP") in the LHO leasehold is approximately 876 million barrels of oil in the Grayburg and San Andres intervals and 80 million barrels in the Seven Rivers interval for a total OOIP of approximately 956,000,000 barrels of oil.
Our primary production is currently from the Seven Rivers zone. In addition to proven reserves, the Company believes it may access an additional 34 million barrels of oil by adding perforations in the Grayburg and San Andres formations. With proven oil reserves of over 15 million barrels, combined with the potential 34 million additional barrels from the Grayburg and San Andres zones, LHO should produce oil and a revenue stream for more than two decades with a low decline rate.
About EON Resources Inc.
EON is an independent upstream energy company focused on maximizing total returns to its shareholders through the development of onshore oil and natural gas properties in the United States. EON's long-term goal is to maximize total shareholder value from a diversified portfolio of long-life oil and natural gas properties built through acquisition and through selective development, production enhancement, and other exploitation efforts on its oil and natural gas properties.
EON's Class A Common Stock trades on the NYSE American Stock Exchange (NYSE American:EONR) and the Company's public warrants trade on the NYSE American Stock Exchange (NYSE American:EONR WS). For more information on EON, please visit the Company's website: https://eon-r.com/
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as "expects," "believes," "anticipates," "intends," "estimates," "seeks," "may," "might," "plan," "possible," "should" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect the Company's management's current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Important factors - including the availability of funds, the results of financing efforts and the risks relating to our business - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on EDGAR (see www.edgar-online.com) and with the Securities and Exchange Commission (see www.sec.gov). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Other Considerations and Disclaimers
The consummation of the transaction is subject to execution by both parties of a definitive agreement, and the Company cannot make assurances that such an agreement will be executed.
Contact Information
Michael J. Porter
Investor Relations - President, PORTER, LEVAY & ROSE, INC.
mike@plrinvest.com
SOURCE: EON Resources Inc.
View the original press release on accesswire.com
FAQ
What is the value of EON Resources' (EONR) new funding agreement with Enstream Capital?
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