Slides
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EON Resources Inc.EON Resources Inc.Conference Call – April 2025Conference Call – April 2025NYSE American: EONRhttps://www.EON-R.com/ NYSE American: EONRhttps://www.EON-R.com/
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Presenters•Michael J. Porter – Investor Relations•Dante V. Caravaggio – CEO •Mitchell B. Trotter – CFO •Jesse J. Allen – VP of Operations2
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Why Invest in EON Resources?•World class Permian asset with 1 billion original barrels in place•Repaired and upgraded most of the field condition issues in 2024•Agreement with Seller has huge benefits (see press release on Feb 11th)•Reduced the original $120 million purchase price to $60 million on $80 million asset•Eliminates approximately $40 million in debt and obligations •Additional 150 patterns to go for the proven reserves in the Seven Rivers•Over 200 workovers available to develop behind pipe potential 3
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Why Invest in EON Resources? (continued)•Horizontal drilling program in the San Andres (see Feb 26thpress release )•Possible recovery of an additional 20 million barrels of oil•50 well locations have been identified with an estimated recovery of 300 to 400 BOPD per well •Immense upside potential and expect huge 2026 and beyond•Developing the Seven Rivers waterflood•The San Andres horizontal well drilling program•Results from the infrastructure repairs and upgrades4
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Financials – Income Statement Summary 5 •Revenues generated from cash was approximately $5.0 million plus per quarter . Derivatives had a non-cash expense impact on revenues as described on another slide•G&A were impacted by professional fees and equity-based costs as described on another slide•Lease operating expenses averaged $765K per month in Q1 and averaged $700K for the rest of 2024•The results were impacted by certain non-cash expenses as described on another slide Q1 Q2 Q3 Q4 YTDRevenues 3,283,099 5,060,795 7,364,346 3,710,680 19,418,919 Operations expenses 3,236,877 3,066,234 3,144,277 3,434,571 12,881,959 General and administrative 2,309,824 2,323,662 2,235,263 3,512,347 10,381,095 Operating income (2,263,601) (329,101) 1,984,806 (3,236,238) (3,844,134) Other income (expense) (3,631,178) (656,469) (1,680,803) (2,738,105) (8,706,556) Net income before taxes (5,894,779) (985,570) 304,003 (5,974,343) (12,550,690) Tax benefits 1,201,279 347,775 855,925 1,065,428 3,470,407 Net income (4,693,500) (637,796) 1,159,928 (4,908,915) (9,080,283)
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Cash Revenues Averaged $5 Million per Quarter 6•Oil revenues were impacted by:•Production was stable for the year•Average oil sold price per barrel fluctuated by quarter driving the changes by quarter•Our hedge position was over 70% and $70 for 2024•Derivatives impact is mostly a non-cash expense other than Q2 •Hedging is at a responsible level with 70% hedged $70.00 or higher for all 2025 Q1 Q2 Q3 Q4 YTDNet barrels of oil 64,339 61,259 62,949 62,140 250,686 Average oil price 77.27 79.76 83.80 67.05 76.98 Oil 4,971,150 4,885,959 5,275,254 4,166,335 19,298,698 Gas 178,608 128,084 89,978 86,816 483,486 Other 130,588 130,230 98,452 127,839 487,110 Hedges: Cash (60,065) (261,447) (107,970) 23,556 (405,926) Cash based revenues 5,220,282 4,882,826 5,355,714 4,404,546 19,863,367 Hedges: Non-cash (1,937,183) 177,969 2,008,631 (693,866) (444,448) Total revenues 3,283,099 5,060,795 7,364,346 3,710,680 19,418,919
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Production Impact on P&L•Seven Rivers fracs expected to average 20 BOPD•First frac is averaging 20 BOPD•Initial frac package plan is for three wells•Horizontal drill program expected to average 300 to 400 BOPD per well•Program expected to start in 2026 with three wells at a time•Several drilling partners have shown serious interest•Acquisitions - TBD7 Seven Rivers Fracs San Andres Horizonal Wells(Assumes no hedge)Per Well High End Mid-Point Low End(Assumes no hedge)Per Well High End Mid-Point Low EndOil price 65.00$ 75.00$ 65.00$ 55.00$ Oil price 65.00$ 75.00$ 65.00$ 55.00$ Gross BOPD per well 20 20 20 20 Gross BOPD per well 350 350 350 350 Wells 1 50 50 50 Wells 1 3 3 3 Gross BOPD 20 1,000 1,000 1,000 Gross BOPD 350 1,050 1,050 1,050 Net percentage 75% 75% 75% 75% Net percentage 50% 50% 50% 50%Net BOPD 15 750 750 750 Net BOPD 175 525 525 525 Net PO per month (30 days) 450 22,500 22,500 22,500 Net PO per month (30 days) 5,250 15,750 15,750 15,750 Revenues per month 29,250$ 1,687,500$ 1,462,500$ 1,237,500$ Revenues per month 341,250$ 1,181,250$ 1,023,750$ 866,250$ Less: Production tax (8.5%) (2,486)$ (143,438)$ (124,313)$ (105,188)$ Less: Production tax (8.5%) (29,006)$ (100,406)$ (87,019)$ (73,631)$ Less: LOE incremental n/a minimal incremental variable LOE Less: LOE incremental (17,500)$ (31,500)$ (31,500)$ (31,500)$ Incremental operating income 26,764$ 1,544,063$ 1,338,188$ 1,132,313$ Incremental operating income 294,744$ 1,049,344$ 905,231$ 761,119$ Annualized operating income 321,165$ 18,528,750$ 16,058,250$ 13,587,750$ Annualized operating income 3,536,925$ 12,592,125$ 10,862,775$ 9,133,425$
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General and Administrative (“G&A”) Cost Summary 8 •Equity based costs of $2.8 million included in G&A are comprised of:•Employee related equity instruments: $700K•Acquisition related costs and fees via equity: $1.6 million•Stock in lieu of A/P and liabilities: $500K•Professional fees for legal and audit services (excludes base level accounting and tax services) were $2.8 million. Approximately half, or $1.4 million, relates to costs stemming from the acquisition for filings, complicated instruments on balance sheet, settlement of agreements, and various other trailing legal matters. Q1 Q2 Q3 Q4 YTDSalaries and fees and related expenses 502,749 593,110 616,402 538,394 2,250,654 Salaries and fees - equity based 125,680 130,720 172,495 250,608 679,502 Salaries and director fees 628,429 723,830 788,897 789,001 2,930,157 Professional fees from legal and audit 412,118 646,381 722,136 987,219 2,767,853 Consulting and other services 184,397 173,927 189,135 187,997 735,456 Insurance costs 407,323 319,559 319,872 356,115 1,402,869 Equity based costs 573,568 360,000 154,500 1,025,355 2,113,423 Other costs 103,988 99,964 60,724 166,660 431,336 2,309,824 2,323,662 2,235,263 3,512,347 10,381,095
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Non-Cash Expenses1. Hedging derivatives: Driven by oil prices at end of each quarter2. G&A: includes non-cash equity costs of: fees & liabilities paid in equity of $2.1 million; and $700K of employee related expenses3. Warrant liability: changes based on stock price at end of quarter4. Derivative liability: changes based on stock price5. FPA liability: FPA instrument terminated in Q4 6. Financing costs amortization: relates to acquisition financing7. Extinguishment of liabilities: one-time gain of $1.7 million in Q2 removing payables from B/S 9 Q1 Q2 Q3 Q4 YTDRevenues without derivatives5,280,347 5,144,273 5,463,684 4,380,990 20,269,293 1 Gain (loss) on derivative instruments(1,997,248) (83,478) 1,900,661 (670,310) (850,374) Total revenues3,283,099 5,060,795 7,364,346 3,710,680 19,418,919 Production taxes428,280 408,985 489,524 389,004 1,715,792 Lease operating2,299,518 2,094,181 2,136,731 2,083,649 8,614,080 Depletion, depr and amort476,074 522,542 507,626 900,856 2,407,098 Asset retirement obligations33,005 40,526 10,395 61,062 144,989 2 General and administrative2,309,824 2,323,662 2,235,263 3,512,347 10,381,095 Total expenses5,546,700 5,389,896 5,379,540 6,946,918 23,263,054 Operating income (loss)(2,263,601) (329,101) 1,984,806 (3,236,238) (3,844,134) 3 Change in fair value of warrant liability(624,055) 277,167 (137,911) (319,206) (804,004) 4 Change in value of derivative liability- - - (192,744) (192,744) 5 Change in fair value of FPA liability(349,189) 23,717 791,805 94,766 561,099 6 Amortization of financing fees(813,181) (662,076) (507,701) (378,669) (2,361,627) Interest expense(1,860,582) (2,030,317) (1,841,848) (1,910,453) (7,643,199) Interest income15,105 14,257 14,852 14,579 58,793 7 Gain on extinguishment of liabilities- 1,720,000 - (81,862) 1,638,138 Other (income) expense723 783 - 35,483 36,989 Total other income and (expense)(3,631,178) (656,469) (1,680,803) (2,738,105) (8,706,556) Income (loss) before income taxes(5,894,779) (985,570) 304,003 (5,974,343) (12,550,690) Income tax provision (benefit)1,201,279 347,775 855,925 1,065,428 3,470,407 Net income (loss) (4,693,500) (637,796) 1,159,928 (4,908,915) (9,080,283)
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Balance Sheet Summary 10 •Debt and equity components on following slides•Company has made, and is continuing to, improvements to the balance sheet•FPA contract and liability was resolved and cleared in Q4•Select payables and liabilities were cleared via equity issuance•Conversion of Private Loans and certain warrants to long-term Convertible Notes started in Q4 Year endCash 3.0 Includes reserve accountReceivables 1.8 Collected within a monthPP&E, net 97.5 LHO NM propertyOther assets 0.4 Total assets 102.7 Payables and accruals 17.5 Various field and corporateDebt including interest 47.4 Described on another slideWarrant liability 5.7 Relates to the LoansDeferred taxes 2.7 Not currently payableOther Liabilities 1.7 Total liabilities 75.0 Equity 27.7 Described on another slideTotal liabilities & equity 102.7
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Debt Structure as of December 31, 2024•Reserve Based Loan (“RBL”): First International Bank & Trust (“FIBT”) provided at $28 million RBL at acquisition closing. •The debt has a five-year amortization schedule with maturity in three years, and an interest rate of 15 percent. •The balance was $23 million. •Seller Note: There is a $15 million note issued to the Seller at closing•Private Loans & Notes: There are $4.4 million of private loans & notes11
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Equity Structure as of December 31, 2024•Common stock: There were 10 million shares of Class A common stock and 500K shares of Class B common stock outstanding. •The Class B common stock has voting rights only and can be converted on a one-for-one basis for Class A common stock•Preferred stock: There are no preferred stock shares issued on the 1.0 million shares authorized, and there are no designated classes of preferred stock. •There are $15 million of preferred units at a subsidiary level that are included in the minority interest component of shareholder equity. The preferred units automatically convert to common stock at the end of two years based on a formula. There is no cash obligation to the Company•Warrants: There were 16.2 million warrants outstanding that are convertible to 12.5 million Class A shares at an exercise price of $11.5012
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Funding Options•The Company is opposed to using excessive amount of equity for fund raising. Options for a properly balanced approach are:•Volumetric funding •Debt financing•Equity instruments•Volumetric funding as described in our March 20thpress release•A production/revenue sharing instrument that neither debt nor equity•Does not dilute our common stock•Payments fluctuate with production and oil prices mitigating risk•Minimizes/reduces default risk by not being a traditional loan•Planned uses for field development; Seller consideration; and refinancing •Back-up alternatives of a combination of debt and/or equity13
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Operations – 2024 •Safety – No reportable incidents •2024 highlights•Stabilized production•Water and flowline repairs and upgrades•Electrical repairs and upgrades•Purchased key pumps, hot oiler, well testers, etc.•Reduced LOE from Q1 and before runrates14
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Operations – Increasing Production•Plans to increase production•Sand fracs with low temperature RCS has been successful•Bringing back on-line down wells and injection wells•Horizontal well program15
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Questions & Thank You for Attending NYSE American: EONRhttps://www.EON-R.com/ NYSE American: EONRhttps://www.EON-R.com/
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Disclaimer•This presentation of EON Resources Inc. (“EON” or the “Company”) shall not constitute a “solicitation” as defined in Rule 14a-1 of the Securities Exchange Act of 1934, as amended.•This presentation is not an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. Any offering of securities (the “Securities”) will not be registeredunder the Securities Act of 1933, as amended (the “Act”), and will be offered as a private placement to a limited number of institutional “accredited investors” as defined in Rule501(a)(1), (2), (3) or (7) under the Act or “qualified institutional buyers” as defined in Rule 144A under the Act. Accordingly, the Securities must continue to be held unless the Securitiesare registered under the Act or a subsequent disposition is exempt from the registration requirements of the Act. Investors should consult with their legal counsel as to the applicablerequirements for a purchaser to avail itself of any exemption under the Act. The transfer of the Securities may also be subject to conditions set forth in an agreement under which theyare to be issued. Investors should be aware that they might be required to bear the final risk of their investment for an indefinite period of time. EON is not making an offer of theSecurities in any state where the offer is not permitted.•The information in this presentation may not be complete and may be changed at any time. Before you invest in the Company’s securities, you should read the documents the Companyhas filed or may file with the SEC for more complete information about the Company. Copies of any such filing may be obtained for free by visiting the SEC website at www.sec.gov.Filings by EON with the SEC may also be viewed through links on the EON website at EON-R.com.•This presentation is not intended to form the basis of any investment decision by the recipient and does not constitute investment, tax or legal advice. No representation or warranty,express or implied, is or will be given by the Company or any of its affiliates, directors, officers, employees or advisers or any other person as to the accuracy or completeness of theinformation in this presentation or any other written, oral or other communications transmitted or otherwise made available to any party and no responsibility or liability whatsoever isaccepted for the accuracy or sufficiency thereof or for any errors, omissions or misstatements, negligent or otherwise, relating thereto. Accordingly, none of the Company or any of itsaffiliates, directors, officers, employees or advisers or any other person shall be liable for any direct, indirect or consequential loss or damages suffered by any person as a result of relyingon any statement in or omission from this presentation and any such liability is expressly disclaimed.•The financial information and data contained in this presentation is unaudited and does not conform to Regulation S-X promulgated by the SEC. Accordingly, such information and datemay not be included in, may be adjusted in, or may be presented differently in, any proxy statement, prospectus or other report or document to be filed or furnished by EON with theSEC. Certain financial measures in this presentation are not calculated pursuant to U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures are inaddition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of thesenon-GAAP financial measures as compared to their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use othermeasures to evaluate their performance, all of which could reduce the usefulness of the non-GAAP financial measures herein as tools for comparison.•Certain statements contained in this presentation relate to the historical experience of our management team. An investment in the Company is not an investment in any of ourmanagement team’s past investments, companies or funds affiliated with them. The historical results of these persons, investments, companies, funds or affiliates is not necessarilyindicative of future performance of the Company.•This Presentation may contain estimated or projected financial information, including, without limitation, EON’s projected revenue, gross operating profit, income before taxes andEBITDA for calendar years 2024, 2025, and 2026. Such estimated or projected financial information constitutes forward-looking information and is for illustrative purposes only andshould not be relied upon as necessarily being indicative of future results. The assumptions and estimates underlying such estimated or projected financial information are inherentlyuncertain and are subject to a wide variety of significant business, economic, competitive and other risks and uncertainties that could cause actual results to differ materially from thosecontained in the prospective financial information. See “Forward-Looking Statements” below. Actual results may differ materially from the results contemplated by the estimated orprojected financial information contained in this presentation, and the inclusion of such information in this presentation should not be regarded as a representation by any person thatthe results reflected in such estimates and projections will be achieved. The independent registered public accounting firm of EON did not audit, review, compile, or perform anyprocedures with respect to the estimates or projections for the purpose of their inclusion in this presentation, and accordingly, did not express an opinion or provide any other form ofassurance with respect thereto for the purpose of this presentation.17
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Disclaimer•Forward-Looking Statements•Statements in this presentation which are not statements of historical fact are “forward-looking statements”. Our forward-looking statements include, but are not limited to,statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer toprojections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,”“believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressionsmay identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements ofhistorical fact included in this presentation are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known andunknown risks and uncertainties, and may include projections of our future financial performance based on our growth strategies, business plans and anticipated trends in ourbusiness. These forward-looking statements, are only predictions based on our current expectations and projections about future events. There are important factors that couldcause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance, targets, goals or achievementsexpressed or implied in the forward-looking statements. These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A “RiskFactors,” and also discussed from time to time in our quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and other SEC filings including the following:(1) the financial and business performance of the Company, (2) the Company’s abilities to execute its business strategies, (3) the level of production on our properties, (4) overalland regional supply and demand factors, delays, or interruptions of production, (5) competition in the oil and natural gas industry, (6) risks associated with the drilling andoperation of crude oil and natural gas wells, including uncertainties with respect to identified drilling locations and estimates of reserves, and (7) the effect of existing and futurelaws and regulatory actions, including federal and state legislative and regulatory initiatives relating to hydraulic fracturing and environmental matters, including climate change.These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, the Company at the time thispresentation was prepared. Although the Company believes that the assumptions underlying such statements are reasonable, it cannot give assurance that they will be attained.We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be requiredunder applicable securities law. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. EON undertakes nocommitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.•In preparing this presentation, the Company has substantially and materially relied on the Evaluations of Certain Oil and Gas Properties ("reserve reports") rendered by WilliamM. Cobb & Associates, Inc. ("Cobb"), an unrelated third party that had previously been engaged and compensated by EON concerning the oil and gas assets owned by EONincluding, without limitation, the proved reserves and future income as of the date of the Cobb reserve reports, the most recent reflecting values as of December 31, 2023.18