The Albany Gazette - EON Resources Inc. Provides FAQ Responses in Advance of Earnings Call

What are the current production volumes from our waterflood programs?

• The Grayburg-Jackson Field ("GJF") oilfield (without the San Andres horizontal drilling program oil production) is close to 900 barrels of oil per day ("BOPD")
• Our South Justis Unit ("SJU") is close to 50 BOPD. This is down 100 BOPD overall due to heavy rains that impacted our power supply from the local utility.
• Gas sales (which are only 2% of our revenue stream) are down due to curtailment from our midstream gas purchaser, because of plant maintenance.
• We expect production to be back over 1000 BOPD.

What is the status of drilling the horizontal wells in the San Andres zone of the GJF?

• The San Andres farmout agreement includes an initial three-well drilling commitment under which EON receives a contractual carry through first production and delivery to the tanks, subject to the terms of the agreement.
• To date, two horizontal wells have been successfully drilled and completed and are now producing into permanent production facilities. The Operator continues to evaluate well performance and will provide additional production updates when sufficient operating data is available.
• The first horizontal well drilled under the program encountered an unexpected high-pressure water flow at shallow depths. Following successful well-control procedures, the Operator and EON agreed that plugging and abandoning the well was the prudent course of action. A substitute well is planned as part of the next phase of drilling anticipated in early 2027 and will be carried in accordance with the terms of the agreements.
• The Operator has also advanced permitting activities for the 2027 development program and does not anticipate permitting to be a significant constraint on the pace of development. Future drilling activity will be governed by operational results, capital availability, regulatory approvals, service availability, and other customary development considerations.

What is the expected production from the horizontal wells?

• The two initial San Andres horizontal wells have been placed on production through newly installed permanent production facilities. The Operator is managing the initial production operations and monitoring well performance as completion and production fluids are recovered. The facilities operate as designed. The Operator continues to collect and evaluate production data to better understand the wells' performance characteristics and inform future development decisions.
• While it is premature to establish reliable production expectations at this stage, the Company remains optimistic about the development potential of the San Andres formation. Meaningful production results will be communicated as sufficient operating data becomes available.

Why the high cost of borrowing?

• We borrowed money at 40% to 50% net effective interest rates. Most has already been paid back. There are several reasons the Company borrowed at these rates:
  • To be compliant with NMOCD regulations we needed capital to fix broken surface equipment and to repair idle wells. We could not wait for new wells to fund this work.
  • We also had no ability to use our ELOC due to our late SEC registrations, which prevent issuing an S-1 registration. When we have access to the ELOC again, like in the past, we only utilize in small increments as necessary to mitigate pressure on our stock price.
• We are actively sourcing financing at lower double-digit interest rates, which will help us pay off this short-term expensive financing.
• Accordingly, we need to carry this debt until we have a higher stock price to support gentle use of our ELOC or the debt financing is in place.

Why the late SEC filings?

• A main contributing factor to the late filing of 2025 10-K (as discussed in the April earnings call) was the audit took significantly extra time because of the complexities of various instruments.
• During 2025 the complex transactions included, we: obtained funding from the September 9th recapitalization and farmout agreement; acquired South Justis in the June 2025 ; purchased one ORRI and sold two ORRIs in the September 9^th closing; eliminated both senior debt instruments; eliminated the preferred stock and Class B stock of the Company; exchanged 35 private loans and warrants to new convertible notes; had well over 100 note conversions; and negotiated and settled many payables. All of these circumstances had significant impact on GAAP and tax treatments, which took months to finalize.
• The 10-Q filings for both the Q1 and Q2 review and filing process went normally after the 10-K was completed. But the snowball effect added to the delay in those filings. The Company is now current with all required filings and is NYSE compliant.
• In addition to the transactions that were so complex, we could have done better ourselves. We have processes we need to address. There are no fundamental flaws in our processes and internal controls, but they can be improved by implementing steps we have identified and are working on now.

What are you doing to rectify the filing issues and will the third quarter 10-Q filing be late?

• We are now current with our filings and are on pace to file the 10-Q for Q3 2026 timely.
• In June we engaged a "late filer" specialist firm, who provided the Company with much needed personnel, depth and expertise. They did an excellent job sorting through the maze.
• We have retained the specialist going forward, plus we have now engaged in a nationally recognized audit services firm as our advisory firm. They provide a full service for what we require. Their retention allows us to consolidate service needs and mitigate logistical complications.
• The specialist and advisory firms will assist the Company in upgrading processes and procedures, selecting and installing an accounting system that is better designed for EON's needs compared to the systems we inherited, streamline the accounting efforts, and assist in keeping ahead of the pitfalls of complex transactions and instruments.

Why have the high oil prices not had a significant impact to the EON stock?

• The market, not the Company, dictates the stock price. However, there are areas in our control that impact the stock price. We make decisions and take actions in the best interest of the Company, the investors and our stakeholders. This focus eventually should result in increased company value and, correspondingly, a higher stock price.
• Areas that we believe have negatively affected the perception of EON include the following:
  • The delayed filings as discussed above.
  • Not meeting production and drilling expectations. We are adjusting our oil production and drilling forecasting to be more pragmatic. We will forecast a slower production growth and drilling pace reflecting unforeseen events that have hampered our expectations. The potential is still valid and significant. Just a longer timeline than we desire. Those external factors include the increasing drilling rig scarcity, frac service firms being overloaded, cost of delivery such as frac sand becoming more expensive, and natural field events.
  • The timetable and efforts to raise capital for a successful drilling program and accretive acquisitions take time. We formed the Company to be a growing and expanding energy industry business. Our aspirations are not dampened. We are working behind the scenes to accomplish these goals.
• To achieve Company growth we will (i) enhance our financial systems, (ii) get production and drilling programs to our level of expectations, (iii) grow our oil reserves that we believe will add significant value to our shareholders, (iv) and make fundraising and acquisitions we believe are in the best interests of the Company, our investors and our shareholders.

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 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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