EON Resources (EONR) Q2 2024 earnings summary

Executive summary

• Focused on oil and natural gas operations in the Permian Basin, with 13,700 net operated acres and 100% working interest, primarily vertical wells using waterflooding recovery methods.

• Average daily production for the six months ended June 30, 2024, was 814 BOE/day, down from 1,022 BOE/day for 2023, due to well downtime, flowline repairs, and a 10% overriding royalty interest conveyance.

• The company completed a business combination with Pogo Resources in November 2023, resulting in a new basis of accounting and non-comparable periods.

Financial highlights

• Total revenues for Q2 2024 were $5.1M, down 31% year-over-year; six-month revenues were $8.3M, down 45% year-over-year.

• Net loss attributable for Q2 2024 was $638K, compared to net income of $2.7M in Q2 2023; six-month net loss was $5.3M versus net income of $4.6M in the prior year.

• Operating cash flow for the six months ended June 30, 2024, was $2.25M, down from $5.6M in the prior year.

• Lease operating expenses increased to $2.1M in Q2 2024 from $2.0M in Q2 2023; per BOE costs rose 59% year-over-year.

• Interest expense rose to $2.0M in Q2 2024 from $560K in Q2 2023, reflecting new debt from the business combination.

Outlook and guidance

• Management plans to improve profitability by streamlining costs, maintaining hedge positions, and utilizing a $150M common stock purchase agreement for funding and liability reduction.

• Substantial doubt exists about the ability to continue as a going concern due to a $32.6M working capital deficit and significant near-term debt maturities.