The Albany Gazette - EON Resources Inc. Highlights Operating Revenue Growth and Progress on Permian Basin Horizontal Development

Key Investment Highlights

• Operating revenues before derivative adjustments increased approximately 19% to $4.22 million in Q1 2026 from $3.54 million in Q4 2025.
• The first two San Andres horizontal wells in which the Company maintains a 35% working interest have commenced initial flowback operations and frac-load recovery with all permanent production facilities installed and operational.
• Production from the San Andres interval is currently not hedged.

EON Revenue Structure

Revenues for an oil company can be grouped into major categories. The mix needs to be a balance to both protect the company and to allow the company to grow and evolve. EON has a good balance. The major categories for EON and similar sized companies with similar operations profile are:

1. Hedged revenue: Protects the company for downside risk
2. Revenue not hedged: Represents revenue growth and upside potential
3. Non-cash derivatives impact: A function of hedging structure and oil price fluctuations

Looking behind the numbers, EON is poised for significant revenue and upside growth with a proper balance of downside protection. Drilling down into the categories for EON's current position:

1- Hedged revenues: The primary purpose of hedging oil production is to protect the company for significant downside risk. Periodic, or short-term, drop in oil price is the largest risk. The reasons and percentage hedged are designed to "weather the storm". The primary reasons are to service senior debt and to cover a portion of operating costs. EON has no senior debt. This allows the Company to protect a larger percentage of lease operating expenses ("LOE") and other overhead costs

The percentage to hedge for a company similar to EON is in the 70% to 75% range (+/- 5%) of baseline oil production. EON is in this range. The Company's current hedge position on the Grayburg-Jackson field ("GJF") provides $950,000 per month of protection. LOE at GJF is approximately $700,000 per month leaving EON $250,000 per month for overhead cost coverage.

2- Revenue not hedged: Production which is not hedged is growing and the related revenues are reflect the current elevated oil prices. In June 2025, the Company purchased the South Justis Unit ("SJU") in which production revenue is not hedged. The SJU adds an average of 1,600 net oil barrels of production per month. The SJU production is in addition to the current oil production not hedged from the GJF waterflood program which averages 3,000 net oil barrels per month. We expect significant growth in revenue from GJF horizontal drilling program in the San Andres interval.

The San Andres horizontal drilling program has commenced as disclosed in the press release on October 13, 2026. The first two San Andres horizontal wells have commenced initial flowback operations and frac-load recovery with all permanent production facilities installed and operational. Given the exploratory and novel nature of this development, the timing of first oil and subsequent production performance cannot yet be reliably predicted. As operations progress and sufficient production data becomes available, meaningful milestones and associated interpretations can be communicated to stakeholders in due course, following appropriate technical evaluation and coordination between the working interest parties. No production from the horizontal development program is hedged.

3- Non-cash derivative impact: This category is the most misleading aspect of the revenues. The derivative impact is a function of oil prices on last day of a quarter. It is not representative of operations and activities of the Company. It represents a hypothetical "what-if" scenario that assumes all hedges were canceled at quarter end. The impact has an inverse relationship between oil price and revenues where there is a hit on revenues if oil price goes up, and a pick-up of revenues if oil price drops. EON has experienced dramatic swings in the non-cash derivative revenue impact in the past.

The first quarter of 2026 is a prime example where the derivative impact reflects a large non-cash drop in revenue while the Company had solid 19% growth in revenues driven by operations. The first quarter hit to revenues of ($3.3) million was due to the benchmark oil price on December 31, 2025, of $57 per barrel which ultimately rose to $101 per barrel on March 31, 2026. The second quarter performance in 2026 by the Company is expected to reflect a large pick-up to revenues of $2.2 million as oil price on June 30, 2026, was $69 per barrel. Oil price at September 30, 2026, was up to $90 per barrel which will have another non-cash derivative impact to revenues. The misleading impact to the first quarter of 2026 revenues compared to the fourth quarter of 2025 is shown in the table below.

About EON Resources Inc.

EON is an independent upstream energy company focused on maximizing total returns to shareholders through the development of onshore oil and natural gas properties. EON's Class A Common Stock trades on the NYSE American under "EONR," and its public warrants trade under "EONR WS." For more information on the Company, please visit the EON website.

Two Permian Basin Assets, Multiple Development Horizons

Grayburg-Jackson Field (GJF): 13,700 contiguous leasehold acres in Eddy County, New Mexico, with stacked pay zones and almost 1 billion barrels of estimated original oil in place, of which less than 7% has been produced to date. The San Andres horizontal development program commenced in August 2026.

South Justis Unit (SJU): 5,360 contiguous acres in Lea County, New Mexico, with approximately 207 million barrels of original oil in place. EON's geologic and reservoir work on the Blinebry zone indicates development potential that management believes is similar in character to the opportunity identified in the GJF.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as "expects," "believes," "anticipates," "intends," "estimates," "seeks," "may," "might," "plan," "possible," "should" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect the Company's management's current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Important factors - including the availability of funds, the results of financing efforts and the risks relating to our business - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on EDGAR (see www.edgar-online.com) and with the Securities and Exchange Commission (see www.sec.gov). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Investor Relations

Michael J. Porter, President
PORTER, LEVAY & ROSE, INC.
[email protected]

SOURCE: EON Resources Inc.

View the original press release on ACCESS Newswire

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