EON Resources Inc. Announces Agreement With Seller Will: Restructure Balance Sheet; Eliminate Approximately $40MM in Debt and Obligations; Purchase the 10% Overriding Royalty Interest in the Property
EON Resources Inc. (NYSE American:EONR) has announced a significant balance sheet restructuring agreement with Pogo Royalty, The deal includes retiring a $15 million promissory note, purchasing a 10% Overriding Royalty Interest (ORRI) in the company's oil field property, and repurchasing 100% of preferred units in EON's subsidiary.
The total consideration comprises $22 million in cash and 3 million shares of EON's Class A common stock. The agreement must close within 120 days and is subject to securing adequate financing. The restructuring is expected to reduce liabilities by approximately $18 million in principal and accrued interest, decrease preferred units redemption value by $24 million, and acquire an ORRI valued at $14 million currently generating about $200,000 monthly.
EON Resources Inc. (NYSE American:EONR) ha annunciato un importante accordo di ristrutturazione del bilancio con Pogo Royalty. L'accordo prevede l'estinzione di una nota promissoria di 15 milioni di dollari, l'acquisto di un interesse royalty sovrastante (ORRI) del 10% nella proprietà del campo petrolifero dell'azienda e il riacquisto del 100% delle unità privilegiate nella filiale di EON.
Il corrispettivo totale comprende 22 milioni di dollari in contante e 3 milioni di azioni ordinarie di Classe A di EON. L'accordo deve chiudersi entro 120 giorni ed è soggetto al reperimento di finanziamenti adeguati. Si prevede che la ristrutturazione riduca le passività di circa 18 milioni di dollari in capitale e interessi maturati, diminuisca il valore di riscatto delle unità privilegiate di 24 milioni di dollari e acquisisca un ORRI del valore di 14 milioni di dollari che attualmente genera circa 200.000 dollari mensili.
EON Resources Inc. (NYSE American:EONR) ha anunciado un acuerdo significativo de reestructuración del balance con Pogo Royalty. El acuerdo incluye la cancelación de un pagaré de 15 millones de dólares, la compra de un 10% de interés de regalías sobre la propiedad petrolera de la empresa y la recompra del 100% de las unidades preferentes en la subsidiaria de EON.
La consideración total comprende 22 millones de dólares en efectivo y 3 millones de acciones comunes de Clase A de EON. El acuerdo debe cerrarse en un plazo de 120 días y está sujeto a la obtención de financiamiento adecuado. Se espera que la reestructuración reduzca las obligaciones en aproximadamente 18 millones de dólares en capital e intereses acumulados, disminuya el valor de rescate de las unidades preferentes en 24 millones de dólares y adquiera un ORRI valorado en 14 millones de dólares que actualmente genera alrededor de 200.000 dólares mensuales.
EON Resources Inc. (NYSE American:EONR)는 Pogo Royalty와의 중요한 재무 구조 조정 계약을 발표했습니다. 이 계약에는 1500만 달러의 약속어음 상환, 회사의 유전 자산에 대한 10%의 로열티 이자(ORRI) 구매, EON 자회사의 100% 우선주 재매입이 포함됩니다.
총 보상은 2200만 달러의 현금과 EON의 A등급 보통주 300만 주로 구성됩니다. 이 계약은 120일 이내에 종료되어야 하며 적절한 자금 조달 확보에 따라 달라집니다. 재구성이 약 1800만 달러의 원금 및 발생한 이자를 줄이고, 우선주 환매 가치를 2400만 달러 감소시키며, 현재 매달 약 20만 달러를 생성하는 1400만 달러 가치의 ORRI를 인수할 것으로 예상됩니다.
EON Resources Inc. (NYSE American:EONR) a annoncé un accord significatif de restructuration de bilan avec Pogo Royalty. L'accord comprend l'annulation d'une promesse de paiement de 15 millions de dollars, l'achat d'un droit de redevance de 10% (ORRI) sur la propriété pétrolière de l'entreprise, et le rachat de 100% des unités préférentielles dans la filiale d'EON.
La contrepartie totale comprend 22 millions de dollars en espèces et 3 millions d'actions ordinaires de classe A d'EON. L'accord doit être conclu dans les 120 jours et est soumis à l'obtention d'un financement adéquat. Il est prévu que la restructuration réduise les passifs d'environ 18 millions de dollars en principal et en intérêts accumulés, diminue la valeur de rachat des unités préférentielles de 24 millions de dollars et acquière un ORRI d'une valeur de 14 millions de dollars, qui génère actuellement environ 200 000 dollars par mois.
EON Resources Inc. (NYSE American:EONR) hat eine bedeutende Vereinbarung zur Umstrukturierung der Bilanz mit Pogo Royalty angekündigt. Das Geschäft umfasst die Tilgung eines Schuldscheins in Höhe von 15 Millionen Dollar, den Kauf eines 10%igen Übergeordneten Roaylty-Interesses (ORRI) an den Ölfeldern des Unternehmens und den Rückkauf von 100% der Vorzugsanteile in der Tochtergesellschaft von EON.
Die Gesamtvergütung besteht aus 22 Millionen Dollar in bar und 3 Millionen Aktien der Klasse A von EON. Die Vereinbarung muss innerhalb von 120 Tagen abgeschlossen werden und hängt von der Sicherstellung einer angemessenen Finanzierung ab. Es wird erwartet, dass die Umstrukturierung die Verbindlichkeiten um etwa 18 Millionen Dollar an Haupt- und aufgelaufenen Zinsen verringert, den Rücknahmewert der Vorzugsanteile um 24 Millionen Dollar senkt und ein ORRI im Wert von 14 Millionen Dollar erwirbt, das derzeit monatlich etwa 200.000 Dollar generiert.
- Reduction of approximately $18 million in debt liabilities
- Decrease of $24 million in preferred units redemption value
- Acquisition of ORRI valued at $14 million generating $200,000 monthly
- Elimination of Class B common stock
- Need to secure $22 million in cash financing within 120 days
- Dilution from issuance of 3 million new Class A common shares
Insights
This strategic restructuring represents a significant transformation of EON Resources' capital structure, with multi-faceted benefits for the company's financial health. The deal effectively reduces total liabilities by approximately $42M through the elimination of
The acquisition of the 10% Overriding Royalty Interest is particularly noteworthy. At
The deal's structure is intelligent from a capital allocation perspective. The equity component of 3M shares represents approximately
However, the 120-day financing window presents a critical execution risk. Given current market conditions and EON's improved post-transaction balance sheet metrics, securing financing should be feasible, but the terms of such financing will be important to the deal's ultimate value creation. The company's ability to negotiate favorable financing terms will significantly impact the net benefit of this restructuring.
HOUSTON, TX / ACCESS Newswire / February 11, 2025 / EON Resources Inc. (NYSE American:EONR) ("EON" or the "Company") announced it has entered into an agreement with Pogo Royalty, LLC ("Pogo" or "Seller") that would result in a restructure of EON's balance sheet through (a) the retirement of a promissory note to Seller having an original principal amount of
The agreement is subject to various closing conditions, including, without limitation, that the Company obtain adequate financing to fund the cash consideration portion, and that the agreement shall terminate if the closing does not take place within 120 days. The agreement also contains mutual general releases, which shall be effective upon the closing of the agreement.
The effect on the Company's balance sheet and financial position exclusive of the final financing arrangements the secure the
A reduction of liabilities comprised of principal and accrued interest debt owing to Seller of approximately
$18,000,000 Reduction of
$24,000,000 of redemption value of the currently outstanding preferred units held by Seller.The ORRI which is valued at
$14 million and is presently generating approximately$200,000 per month in proceeds.The elimination of outstanding shares of the Company's Class B common stock.
"Over the past 15 months, EON has continued to develop its Grayburg-Jackson Oil Field by reinvesting available cash flow into field enhancements," said Dante Caravaggio, President and CEO of EON. "The overhang from our De-SPAC transaction in terms of one-time expenses, and a very complicated and burdened balance sheet, has restricted our ability to really unlock the underlying potential and value of our assets. This transaction should create immediate value for our equity holders. We are currently looking at a range of options to finance this purchase, and are in discussions with various financial advisors to assist us in this endeavor."
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/
Disclaimer: There is no guaranty that the Company will be able to perform under and close on the agreement. If EON does not close under the agreement, EON will not inure to the benefits or suffer the obligations described.
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.
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 ACCESS Newswire
FAQ
What are the key terms of EON Resources' (EONR) restructuring agreement with Pogo Royalty?
How much monthly revenue does the ORRI generate for EONR?
What is the total debt reduction expected from EONR's restructuring deal?
What is the deadline for EONR to close the restructuring agreement?
How will EONR fund the $22 million cash payment to Pogo Royalty?
