Eon Resources Inc. · AMEX:EONR
Eon Resources — HNR Acquisition — Investor Presentation (March 2024)
31 slides from Eon Resources's investor presentation, Mar 7, 2024
Slide 1: HNR Acquisition Corp Corporate Slide Presentation
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. This presentation is not an offer, or a solicitation of an offer, to buy or sell any investment or other s
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 956 million barrels of OOIP — expect to triple proven reserves in next 3-4 years Production expected to increase by 1,000 bbl/day in next 24 months Strategy to reduce lifting costs Oil Rich + Waterflooding Extraction + Existing Wells = Lower Cap-ex sk: Aggressive Hedging, Shall
Slide 5: HNRA Oil Potential is Huge
HNRA Oil Potential is Huge Total Mapped Original Oil in Place 956,000,000 Barrels of Oil = Previous recovery = Proven reserves = Add perforation = Infield drilling ® OOIP potential The oil and gas quantities of the original-oil- in-place (“OOIP”), reserves and potential recovery are all based on rep
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 = £ « 2b G PY Potential untapped reserves in our 956 million of OOIP Significant reserves can be tapped with existing well Experienced Oil
Slide 8: The Team
The Team Dante Caravaggio CEO & Director 40+ years of experience in the oil and gas industry. Executive and program management positions with Kellogg Brown and Root, Parsons Corp, Jacobs Engineering and Sun Oil. BS and MS in Petroleum Engineering from University of Southern California and MBA from P
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. * Contributes 62% of the total oil output of the U.S. * Contribute 25% to the overall gas production in the U.S. ¢ Expected to remain resource-rich for a long period of time, as geologically viable (GV) capacity comes on board to sustain the pr
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
35 Seven Rivers (7R) — Development History Regional Setting Depositional Setting | sa.cvsc vacuum _ TREND BOUNDARY at=| 10,000 10,000 1,000 Gross o11(8090) 1,000 100 34 MMBO Cum. Gross Well Count Src: ENVERUS production data for current LH Operating wells i 10 10 1945 «1950-1955 1960-1965 = 1970 ©19
Slide 18: Seven Rivers (7R) Waterflood Development
36 Seven Rivers (7R) Waterflood Development Current 7R Waterflood Response 7R PDP Response (95 Patterns) — Gross Oil (BOPD) 10,000 95 PDP 4-Pattern Patterns Online Pilot Response ~1,000 BOPD " Starts / Gross 7R BOPD 400 aoocoossaaeee==™ = 7R Pattern Count a 10 i / / / pooeee / / i? Production shown
Slide 19: Stratigraphy & Seven Rivers Type Log
Stratigraphy & Seven Rivers Type Log Stratigraphy of the NW Shelf of the Permian Basin ‘Approx. Regional Formati Period oration ei Dewey Lake Rustler Salado Tansil Yates 200 Guadalupian Queen 200-500 Grayburg 300 Permian ‘San Andres 1,500 Glorieta 100 |__Paddock | Leonardian Blinebry Yeso Tihs 1,500
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 ~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 -—_ (BIM Leases IE NM State Leases
Slide 22: The Oil Field
The Oil Field * The oil field has several large reservoir structures. The HNRA intervals range from as shallow as 1,500 feet deep to 4,000 feet deep ¢ The HNRA field has attainable proven reserves of approximately 20 million barrels of crude oil and 5 billion cubic feet of natural gas * Original Oil
Slide 23: Seven Rivers Future Development
Seven Rivers Future Development Seven Rivers Full Waterflood Development (Gross BOPD) Cobb Report Projections The projections are based on the Cobb report 253 pattern total development v 95 PDP patterns v Plus 115 PDNP and 43 PUD patterns v Patterns are a combination of producing wells and water inj
Slide 24: Financials
Financials
Slide 25: Accomplishments & Upcoming Targets
Accomplishments & Upcoming Targets Incorporated in Delaware on December 9, 2020 IPO was effective on February 10, 2022 Initial Business Combination closed on November 15, 2023 1024 Evaluate the producing wells to increase production 25 2024 Begin to develop the proven reserves 3Q24 Ramp up productio
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 22,0
Slide 28: Capital Structure — (as of December 2023)
Capital Structure — (as of December 2023) * Debt * RBL Loan from FIBT 28 mil * Seller Note 15 mil ¢ Private Loans 3 mil ° Equity * Common stock 7.2 milshares 15 mil ¢ Preferred stock 15 mil ¢ Less Cash on Balance Sheet ° Enterprise value (17% discount to purchase price) S46 mil 30 mil (1) mil $75 mi
Slide 29: Final Words
Final Words
Slide 30: Investment Highlights
Investment Highlights 956 million barrels of OOIP — expect to triple proven reserves in next 3-4 years Production expected to increase by 1,000 bbl/day in next 24 months Strategy to reduce lifting costs Oil Rich + Waterflooding Extraction + Existing Wells = Lower Cap-ex sk: Aggressive Hedging, Shall
Slide 31: Thank you for your interest in HNRA