EON Resources (EONR) investor relations material

Transaction highlights and financial impact

• Secured $45.5 million in funding through a multiparty farm-out agreement, including $20 million for a 15% overriding royalty interest and $20.5 million for a 5% ORRI in the San Andres Formation, with $5 million for other obligations.

• Retired $20.6 million in senior debt, settled a $15 million seller note for $7 million, and eliminated $5 million in accrued interest, resulting in significant discounts and improved financial flexibility.

• Eliminated highly dilutive preferred shares, reducing outstanding shares to about 43 million and issuing 1.5 million common shares to retire preferreds.

• Achieved a pro forma increase in shareholders' equity of $10–12 million and a $35.6 million reduction in debt, with minority interest reclassified into equity.

• Positive cash flow position established, with $500,000 per month improvement from debt elimination and cost reductions, and net monthly cash flow up $570,000 despite higher royalty burden.

Operational and production outlook

• Operates about 20,000 acres across two Permian Basin fields, with around 750 wells and over 1,000 barrels per day production, planning to expand to over 5,000 barrels per day by expanding waterflood operations and drilling up to 90 horizontal wells in San Andres.

• Proven reserves of about 14 million barrels of oil and 2.8 Bcf gas in Grayburg-Jackson as of December 2024.

• Partnership with Virtus Energy Partners brings $7 million in cash and a 65/35 working interest split, with Virtus carrying 100% of initial drilling costs and enabling 10–20 incremental horizontal wells per year.

• Anticipated net production of over 7,000 barrels per day from the drilling program, with first significant impact expected in mid-2026.

• Ongoing efforts to reduce lease operating expenses and general administrative costs, targeting sub-$20 per barrel lifting costs.

Strategic positioning and future plans

• No current bank covenants or senior debt, providing greater flexibility for future transactions and acquisitions.

• Hedging strategy adjusted to target 25–50% of production, with flexibility to increase as market conditions allow.

• Farm-out agreement structured to ensure long-term partnership with Virtus, requiring a minimum 15 wells to be drilled before field-wide rights are earned.

• Management remains open to strategic buyouts if valuations are compelling but is focused on organic growth and value creation.

• Commitment to shareholder value, with a focus on increasing stock price through operational improvements and disciplined capital allocation.