Eon Resources Inc. · AMEX:EONR
Eon Resources — HNR Acquisition — Investor Presentation (March 2024)
31 slides from Eon Resources's investor presentation, March 2024
Slide 1: HNR Acquisition Corp Corporate Slide Presentation
HNR Acquisition Corp NYSE American: HNRA Corporate Slide Presentation March 2024
Slide 2: Disclaimer
Disclaimer • This presentation of HNR Acquisition Corp (“HNRA” or the “Company”) shall not constitute a “solicitation” as defined in Rule 14a-1 of the Securities Exchange Act of 1934, as amended. • The information in this presentation may not be complete and may be changed at any time. Before you in
Slide 3: Disclaimer: Forward-Looking Statements
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, inte
Slide 4: Investment Highlights
Investment Highlights Plentiful Asset: 956 million barrels of OOIP – expect to triple proven reserves in next 3-4 years Increasing Production: Production expected to increase by 1,000 bbl/day in next 24 months Operation Excellence: Strategy to reduce lifting costs Capital Efficient: Oil Rich + Water
Slide 5: HNRA Oil Potential is Huge
HNRA Oil Potential is Huge The oil and gas quantities of the original-oil- in-place (“OOIP”), reserves and potential recovery are all based on reports and letters from our third-party engineering firm William M. Cobb & Associates, Inc. Specifically, the reserve report as of December 31, 2023 dated F
Slide 6: Growth Strategy
Growth Strategy
Slide 7: Five Strategic Priorities
Five Strategic Priorities Build Team and Optimize Reduce Operating Enhance Capital Build a Portfolio of Public Company Production Cost Efficiencies Energy Assets Potential untapped reserves Significant reserves can be in our 956 million of OOIP tapped with existing well Experienced Oil & Gas industr
Slide 8: The Team
The Team Dante Caravaggio Mitchell B. Trotter David M. Smith, Esq. Jesse J. Allen CEO & Director CFO & Director VP, General Counsel VP of Operations • 40+ years of experience in the oil and • 40+ years of experience in various • Licensed attorney in Texas with 40+ • 40+ years of experience operating
Slide 9: Optimizing Production
Optimizing Production • What was done? • Predecessor transitioned to a waterflood approach in the Seven Rivers zone in 2020 when the production was 400 BOEPD (barrels of oil per day) • Using a pilot test process, they increased to 1,200 BOEPD over an 18 months period • Due to lack of cap-ex and atte
Slide 10: Strategy to Reduce Costs
Strategy to Reduce Costs • The operating costs of the previous owner was high and inefficient, and there are opportunities to improve and drive down lift costs • The management team and the field leadership team are, on an on-going basis, reviewing areas to identify where we can: enhance maintaining
Slide 11: Responsible use of Capital Spend
Responsible use of Capital Spend • The Grayburg-Jackson oil field has 550 existing wells that can be utilized to recover proven reserves without new drilling, and hence significant upfront capital spend can be avoided • The team of petroleum engineers and geologists are studying well responses to be
Slide 12: Industry and Acquisition Strategy Overview
Industry and Acquisition Strategy Overview • HNRA is an independent energy company with an acquisition and value creation strategy focused on building a company in the energy industry in North America that complements the experience of our management team and can benefit from our operational experti
Slide 13: The Property
The Property
Slide 14: Grayburg-Jackson Oil Field Overview
Grayburg-Jackson Oil Field Overview • The first acquisition was the Grayburg-Jackson oil field which is a waterflood property operated by the HNRA subsidiary LH Operating, LLC (“LHO”) • The property is located on the Northwest Shelf of the Permian Basin which according to the U.S. Geological Survey
Slide 15: Permian Basin – Most Promising Oil Reserves in the U.S.
Permian Basin – Most Promising Oil Reserves in the U.S. Permian Region Dominates Daily Oil Production (Values in thousand bpd) • Contributes 62% of the total oil output of Anadarko, 396 , 4%Appalachia, 135 , 2% Bakken, 1,270 , the U.S. 13% • Contribute 25% to the overall gas Eagle Ford, 1,154 , 12%
Slide 16: Development History
Development History • Development began in 1940’s for the Seven Rivers (“7R”), Queen, Grayburg, and San Andres intervals • In late 2019, LHO (a privately owned company) purchased the property and operated the Grayburg-Jackson field from early 2020 • The 2020 baseline production level was approximate
Slide 17: Seven Rivers (7R) – Development History
Seven Rivers (7R) – Development History Depositional Setting Regional Setting GYBG-JACKSON MALJAMAR VACUUM LH Operating 120 MMBO Cum 140 MMBO Cum 631 MMBO Cum LH Operating LH Operating Gross Historical Production (All Horizons) 10,000 1980’s – 1990’s 10,000 drilling program LH 7R WF initiated late 2
Slide 18: Seven Rivers (7R) Waterflood Development
Seven Rivers (7R) Waterflood Development 7R PDP Response (95 Patterns) – Gross Oil (BOPD) 7R Waterflood Development Pilot Response 10,000 Starts Early 2020 95 PDP 4-Pattern Patterns Online Pilot Response ~1,000 BOPD 1,000 Starts Gross 7R BOPD 100 7R Pattern Count 10 Production shown does not include
Slide 19: Stratigraphy & Seven Rivers Type Log
Stratigraphy & Seven Rivers Type Log Stratigraphy of the NW Shelf of the Permian Basin Seven Rivers Type Log: State AZ 606 Approx. Regional Period Epoch Formation Thickness (ft) Dewey Lake 200-400 Ochoan Rustler 100 Salado 1,000 Tansil 200 Yates 200 Seven Rivers 500 Guadalupian Queen 200-500 Regulat
Slide 20: Waterflood Operations – Creating a Steady Revenue Stream
Waterflood Operations – Creating a Steady Revenue Stream Illustration of Water Flooding Technique • The waterflood process uses the injection of water into an oil-bearing reservoir for pressure maintenance to stimulate oil flow through the rock to the producing well for oil and gas recovery • A wate
Slide 21: Land and Ownership Overview
Land and Ownership Overview LH Operating Leases • ~13,700 gross acres • 23 Leases (20 BLM and 3 State leases) • 100% WI with 74% average NRI • 100% Operated and 100% HBP • Original Oil in Place is 876,159,746 barrels of oil • Title opinion coverage on 97% of PDP PV10 value BLM and NM State Leases Ti
Slide 22: The Oil Field
The Oil Field • The oil field has several large reservoir Approx. Regional structures. The HNRA intervals range from as Period Epoch Formation Thickness (ft) shallow as 1,500 feet deep to 4,000 feet deep Dewey Lake 200-400 Ochoan Rustler 100 Salado 1,000 • The HNRA field has attainable proven reserv
Slide 23: Cobb Report Projections
Cobb Report Projections Seven Rivers Future Development Seven Rivers Full Waterflood Development (Gross BOPD) • The projections are based on the Cobb report 10,000 Historical Projected Commercial Gross EURs • 253 pattern total development 95 PDP patterns Plus 115 PDNP and 43 PUD patterns Patte
Slide 24: Financials
Financials
Slide 25: Accomplishments & Upcoming Targets
Accomplishments & Upcoming Targets Initial Business 2Q24 Incorporated Combination Begin to in Delaware closed on develop the on December November 15, proven 9, 2020 2023 reserves IPO was 1Q24 3Q24 effective on Evaluate the Ramp up February 10, producing wells production from 2022 to increase existin
Slide 26: Financials – Predecessor Operating Company
Financials – Predecessor Operating Company (Dollars in millions) Nine months ended September 2023 Revenues 20.3 Lease operating expenses (LOE) 7.4 Production taxes 1.8 Depletion, asset retirement and other 2.0 General and administrative 3.1 Operating income 6.0 Interest expense, net 1.2 Loss on sale
Slide 27: Hedging
Hedging • 60% of PDP has been hedged for 2024, and 50% for 2025 • All hedges at $70.00 or greater CY 2024 CY 2025 Hedge # Type Barrels Price/Range Barrels Price/Range Total 1 Collar 54,000 70.00 - 91.90 54,000 2 Collar 54,000 70.00 - 85.50 54,000 3 Swap 33,000 70.23 36,000 70.23 69,000 4 Swap 22,000
Slide 28: Capital Structure – (as of December 2023)
Capital Structure – (as of December 2023) • Debt $46 mil • RBL Loan from FIBT 28 mil • Seller Note 15 mil • Private Loans 3 mil • Equity 30 mil • Common stock 7.2 mil shares 15 mil • Preferred stock 15 mil • Less Cash on Balance Sheet (1) mil • Enterprise value (17% discount to purchase price) $75 m
Slide 29: Final Words
Final Words
Slide 30: Investment Highlights
Investment Highlights Plentiful Asset: 956 million barrels of OOIP – expect to triple proven reserves in next 3-4 years Increasing Production: Production expected to increase by 1,000 bbl/day in next 24 months Operation Excellence: Strategy to reduce lifting costs Capital Efficient: Oil Rich + Water
Slide 31: Thank you for your interest in HNRA
Thank you for your interest in HNRA