Eon Resources Inc. · AMEX:EONR
Eon Resources — HNR Acquisition — SPAC Merger (February 2023)
36 slides from Eon Resources's SPAC merger presentation, Feb 27, 2023
Slide 1: HNR Acquisition Corp First Acquisition Overview
HNR Acquisition Corp First Acquisition Overview February 2023
Slide 2: Disclaimer
Disclaimer • This presentation relates to the potential financing of a portion of a contemplated purchase (the “Purchase”) between HNR Acquisition Corp (“ HNRA ”) and Pogo Resources LLC (“ Pogo”) through a private placement of HNRA’s common stock by potential accredited investors. This presentation
Slide 3: Disclaimer
Disclaimer • This presentation does not purport to contain all of the information that may be required to evaluate a possible transaction. Th is 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 repr
Slide 4: Disclaimer
Disclaimer • Certain statements contained in this presentation relate to the historical experience of our founders, management team and th eir affiliates and investments. An investment in the Company is not an investment in any of our founders’ or our management team’s past investments, companies o
Slide 5: Executive Summary
Executive Summary
Slide 6: HNR Acquisition Corp (HNRA)
HNR Acquisition Corp (HNRA) Who is HNRA? HNRA is focused on the acquisition of undervalued oil and gas producing properties with significant development potential at a low cost to realize this potential What is the Current Structure? • Incorporated in Delaware on December 9, 2020 • A blank check com
Slide 7: Target Acquisition: Who is the Target?
Target Acquisition Who is the Target? • To meet our acquisition target profile, an agreement has been entered into to purchase Pogo Resources, LLC for $120 million. Their properties have virtually all the wells needed already drilled resulting in lower cost and risk, with the ability to achieve sust
Slide 8: Target Acquisition: Primary Assets of LH
Target Acquisition What are the Primary Assets of LH? • 550 wells producing oil and gas with proven but not yet producing reserves • Located on the Northwest Shelf of the Permian Basin among prolific legacy oil fields in Eddy County, New Mexico • The assets are on 20 federal and 3 state leases • The
Slide 9: Transaction Summary
Transaction Summary • $120 million purchase price: • Cash Consideration : cash in the amount of $100,000,000 in immediately available funds; provided, that up to $15,000,000 of the Cash Consideration may be payable through a promissory note • Share Consideration : 2,000,000 shares of HNRA’s common s
Slide 10: HNRA's Reasons for Target Acquisition
HNRA’s Reasons for Target Acquisition • The PV - 10 of proved reserves is $493 million from the independent external engineering firm’s reportProperty is in the Permian Basin which is one of the premier crude and natural gas producing regions in the United States • Property specific attributes: x Hi
Slide 11: Highlights of the Target
Highlights of the Target
Slide 12: Assets Profile
Assets Profile Highlights of the Assets • 95 active waterflood patterns (PDP) with additional 158 patterns planned (PDNP + PUD) • 550 wells (342 producing wells, 207 water injectors, 1 WSW); 98% of wells are active • Current production is primarily from Seven Rivers (7R) • Production is approximatel
Slide 13: Seven Rivers Full Waterflood Development
Seven Rivers Full Waterflood Development (Gross BOPD) Projections Seven Rivers Future Development • The projections are based on the independent external engineering firm’s report (“engineer’s reserve report”) • 253 pattern total development x 95 PDP patterns x Plus 115 PDNP and 43 PUD patterns • Re
Slide 14: Regulatory Production Pool: 7R-Q-GB-SA
Regulatory Production Pool: 7R - Q - GB - SA Period Epoch Approx. Regional Thickness (ft) 200-400 100 1,000 200 200 500 200-500 300 1,500 100 Paddock Blinebry Tubb Drinkard 1,000 Wolfcampian 0-1,500 Guadalupian Leonardian 1,500 Formation Grayburg San Andres Glorieta Yeso Abo Wolfcamp Permian Ochoan
Slide 15: Key Takeaways on the Property
Key Takeaways on the Property • 100% operated, 100% HBP, 84% Average NRI, and 98% of wells are active • Low lifting costs of ~$15/ bbl demonstrated for more than 18 months • Strong 7R waterflood response with over 2 ½ years of performance • Full development plan in the engineer’s reserve report is s
Slide 16: History and Target Production and Cap-Ex
History and Target Production and Cap - Ex Key points of the production forecast • Target production volumes and development costs to produce these volumes are from the independent external engineering firm’s report • Lower cost of developing and operating wells brought into production is aided by t
Slide 17: Key Aspects of the Execution Plan
Key Aspects of the Execution Plan • The Target has had a successful waterflooding approach to increase production. We will continue to follow the development plan from the independent external engineering firm’s report • With HNRA’s planned expansion, production will increase by 2 - 1/2 times over n
Slide 18: Land and Regulatory Overview
Land and Regulatory Overview
Slide 19: Land and Ownership Overview
Land and Ownership Overview • ~13,700 gross acres • 23 Leases (20 BLM and 3 State leases) • 100% WI with 84% average NRI • 100% Operated • 100% HBP • Title opinion coverage on 97% of PDP PV10 value BLM Leases NM State Leases LH Leases with Title Opinion LH Leasehold <75% NRI 75% - 79% NRI 85% - 87.5
Slide 20: Regulatory Overview
Regulatory Overview Regulatory Environment • 7R - Q - GB - SA is considered a single, unitized pool (“pool”) for regulatory purposes and all current production and upside producti on are produced from this single pool • No regulatory approval required prior to performing well - work on an existing w
Slide 21: Field Operation - Employees
Field Operation - Employees
Slide 22: Field Personnel
Field Personnel Experienced Field Personnel (12 company field employees) • 3 Field Supervisors (field, production, and development) with extensive industry experience x Production and Development Supervisors: >15 years industry experience x Field Supervisor: >10 years industry experience • 7 Gaugers
Slide 23: Leadership and Management (after the Purchase)
Leadership and Management (after the Purchase)
Slide 24: Dean Rojas – Chief Executive Officer and Director
Dean Rojas – Chief Executive Officer and Director • Mr. Rojas has 40 years’ experience in the oil and gas industry with most of that experience in energy operations onshore, offshore and internationally • He began his career in 1975 with Exxon Company and grew his career to the District Engineering
Slide 25: Mitchell B. Trotter – Chief Financial Officer and Director
Mitchell B. Trotter – Chief Financial Officer and Director • Mr. Trotter joined the Company in October 2022 • Mr. Trotter has 40+ years of experience beginning his career in 1981 as an auditor with Coopers & Lybrand for seven years. • He then served as CFO of two private investor backed private comp
Slide 26: Jesse J. Allen – Vice President of Operations
Jesse J. Allen – Vice President of Operations • With over 42+ years experience operating and managing onshore and offshore oil and production in the US and internationally, Mr. Allen brings considerable knowledge to his role as VP of Operations. • His expertise includes artificial lift, completions,
Slide 27: David M. Smith, Esq. – VP, General Counsel and Secretary
David M. Smith, Esq. – Vice President, General Counsel and Secretary • Mr. Smith is a licensed attorney in Texas with over 40 years’ experience in the legal field of oil and gas exploration and production, manufacturing, purchase and sale agreements, exploration agreements, land and leaseholds, righ
Slide 28: Donald H. Gorée – Public Markets Consultant
Donald H. Gorée – Public Markets Consultant • Mr. Gorée founded our company and has served as our Chairman and Chief Executive Officer since our inception and will serve as our publics market consultant • Mr. Gorée in 2018 founded Houston Natural Resources, Inc., a global natural resource corporatio
Slide 29: Donald W. Orr – Geological Consultant
Donald W. Orr – Geological Consultant • Donald W. Orr has served as HNRA President and has been a member of our Board of Directors since January 2021 and will serve as our senior geological consultant • Mr. Orr is a geologist with over 42 years of experience in petroleum geology and production opera
Slide 30: Joseph V. Salvucci, Sr – Chairman of the Board
Joseph V. Salvucci, Sr – Chairman of the Board of Directors • Joseph V. Salvucci, Sr. has served as a member of our board of directors since December 2021 • Mr. Salvucci acquired PEAK Technical Staffing USA (“PEAK”), peaktechnical.com in 1986 and has grown the business to be a premier provider of US
Slide 31: Joseph V. Salvucci, Jr – Member Board of Directors
Joseph V. Salvucci, Jr – Member Board of Directors • Joseph V. Salvucci, Jr. has served as a member of our board of directors since December 2021 • Mr. Salvucci began his career with PEAK in November 2010 and is currently serving as the President and Chief Operating Officer overseeing nine branches
Slide 32: Dante Caravaggio – Key Advisor and Consultant
Dante Caravaggio – Key Advisor and Consultant • Mr. Caravaggio has been a key member of the team in identifying the target, structuring the deal, structuring the capital raise and consulting with the management team and board of directors • He will continue in an advisory role after the IBC in devel
Slide 33: Appendix Technical Backup and Information
Appendix Technical Backup and Information
Slide 34: Pilot Overview
Pilot Overview • LH Operating (“LH”) assets located on the Northwest Shelf of the Permian Basin among prolific legacy oil fields • ~13,700 contiguous acres in Eddy County, New Mexico; 100% HBP • 100% Operated; 100% WI and 84% average NRI Highlights • Significant current net operating cash flow • Cur
Slide 35: Seven Rivers (7R) Development History
10 100 1,000 10,000 10 100 1,000 10,000 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Seven Rivers (7R) – Development History LH Operating Gross Historical Production (All Horizons) Depositional Setting LH Operating Regional Setting GYBG - JACKSON 120 MMBO Cum MALJA
Slide 36: Seven Rivers (7R) Waterflood Development
Seven Rivers (7R) Waterflood Development 7R PDP Response (95 Patterns) – Gross Oil (BOPD) 7R Waterflood Development Pilot Response Starts Early 2020 Current 7R Waterflood Response • LH Operating’s 7R WF work began late 2019 in the H E West B 4 - pattern pilot with initial production response in Febr