EON Resources Inc. Announces Funding Design for the Settlement of the Seller Agreement and Debt Payoff and the Grayburg-Jackson Field Development

Rhea-AI Summary

EON Resources (NYSE American:EONR), a Permian Basin energy company, has announced significant funding developments. The company has received multiple non-binding offers to fund $41-53 million through volumetric funding (VMA) via ORRI package sales. This funding will facilitate the settlement of their Seller Agreement and debt payoff.

Key components include: a $20.5 million cash settlement with Seller to reclaim a 10% ORRI, retirement of a $22 million Seller note, and return of preferred shares valued at $24 million. The company will also retire senior debt, reducing monthly payments from $700,000 to an estimated $100,000-$300,000.

Additionally, EON has secured a farmout agreement with a private company to develop up to 40 million barrels of reserves in the San Andres formation through horizontal drilling, expected to add over $100 million in PV-10 value.

Positive

• Expected creation of over $40 million in net value for company and shareholders
• Monthly cash flow improvement of $400,000-$600,000 through debt restructuring
• Development potential of 40 million barrels in San Andres formation
• Addition of over $100 million in PV-10 value through horizontal drilling program
• Partnership with proven industry leader for horizontal drilling program

Negative

• Funding agreements are currently non-binding
• Transaction completion depends on successful due diligence and definitive agreements
• Significant dilution potential through ORRI package sales

Insights

Energy Finance Specialist

EON secures funding offers to eliminate $66.5M in obligations while improving cash flow by $400-600K monthly through debt restructuring.

EON Resources has made significant strides in addressing its balance sheet challenges through a two-pronged strategic approach. The company has received multiple non-binding offers to fund $41-53 million through volumetric funding via overriding royalty interest (ORRI) sales. This capital would facilitate a $20.5 million settlement with an unnamed Seller while retiring $18.5 million in senior debt.

The financial engineering here is noteworthy. By replacing a $700,000 monthly note payment with an estimated $100,000-$300,000 monthly ORRI payment, EON projects a positive cash flow impact of $400,000-$600,000 monthly. Additionally, the company will eliminate $22 million in Seller notes and return preferred shares with a $24 million redemption value to treasury.

This transaction creates substantial shareholder value through multiple mechanisms: recapturing a 10% ORRI in their Grayburg-Jackson Field, eliminating significant debt obligations with a total face value of approximately $66.5 million ($20.5M settlement + $22M note + $24M preferred shares), and generating meaningful monthly cash flow improvements.

The parallel farmout agreement for horizontal drilling in the San Andres formation represents a promising development avenue without requiring significant capital deployment from EON itself. The company's projection of $100 million in additional PV-10 value through this arrangement indicates substantial potential upside from this untapped formation.

While these arrangements remain subject to final documentation and due diligence, the advanced stage of negotiations suggests meaningful progress toward a comprehensive financial restructuring that could transform EON's operating profile.

HOUSTON, TX / ACCESS Newswire / August 4, 2025 / EON Resources Inc. (NYSE American:EONR) ("EON" or the "Company") is an independent upstream energy company with 20,000 leasehold acres comprising two fields in the Permian Basin in southeast New Mexico. Today, the Company announces it has: (i) received multiple non-binding offers to fund the $41 to $53 million needed for the previously announced Purchase, Sale, Termination and Exchange Agreement with the Seller ("Seller Agreement") that will result in (a) the restructure of the Company's balance sheet by eliminating all current and future obligations to the Seller in a discounted manner, and (b) re-purchase of an overriding royalty interest ("ORRI") equal to ten percent (10%) in the Grayburg-Jackson Field (Press Release on Seller Agreement as amended); and (ii) a farmout to an industry leader with a proven team for the previously announced San Andres horizontal drilling program (Press Release on horizontal drilling program) in the Grayburg-Jackson Field.

Funding offers: Subject to execution of definitive documents, we expect to fund the $41 to $53 million using volumetric funding ("VMA") via the sale of one or more ORRI packages. The schedule is to close and fund in approximately four weeks. The funding is to discharge our $20.5 million settlement with Seller and to retire the Company's senior debt for $18.5 million. As disclosed in previous press releases, we expect the benefits to include:

• Completion of our $20.5 million cash settlement with Seller that returns to EON the 10% ORRI; retirement of the $22 million Seller note ($15 million principal plus accrued interest); and return to treasury of the Seller preferred shares with redemption value of $24 million. This would create over $40 million in net value to the Company and its shareholders.

• Retirement of its senior debt eliminating a $700,000 per month note payment with a payment substitution of an estimated incremental ORRI payment of $100,000 to $300,000 per month. A positive cash flow impact of $400,000 to $600,000 per month is expected.

• Funds raised by the VMA and farm-in proceeds in excess of $41 million would be used to develop 45 in field waterflood patterns out of a remaining 150 waterflood patterns in our Seven Rivers formation.

Farmout with Horizontal Drilling Program: In a separate farmout and drilling commitment transaction, EON has reached an agreement in principle with a private company with a proven team to develop reserves estimated to be up to 40 million barrels in the San Andres formation using a horizontal drilling program. We are targeting commencement of the initial San Andres horizontal drilling in the first quarter of 2026. EON expects that this will add over $100 million in PV-10 value to the Company. Details of this transaction are being withheld until the private company completes due diligence and closing occurs.

"We could not be more pleased with the outcome of this raise that has resulted in connecting us with a world class Permian driller, and energy investors who are focused on Permian development opportunities," said Dante Caravaggio, President and CEO of the Company. "To ensure we close in on schedule, we will proceed with one preferred and one backup funding source. Both sources look to the value of overriding royalties the Company could deliver in consideration of funding, with both sources in an advanced stage of due diligence. Simultaneously with the close, EON significantly improves cash flow reducing the need to use our ELOC facility."

More information will be released if we are successful in negotiating definitive documents and funding occurs, of which we can make no assurances at this stage.

About the Grayburg-Jackson Oil Field Property

LH Operating, LLC ("LHO"), a wholly owned subsidiary of EON, operates its holdings in New Mexico of oil and gas waterflood production comprising 13,700 contiguous leasehold acres, 342 producing wells and 207 injection wells situated on 20 federal and 3 state leases in the Grayburg-Jackson Oil Field. The Grayburg-Jackson Oil Field is located on the Northwest Shelf of the prolific Permian Basin in Eddy County, New Mexico.

Leasehold rights of LHO include the Seven Rivers, Queen, Grayburg and San Andres intervals that range from as shallow as 1,500 feet to 4,000 feet in depth. The December 2024 reserve report from our third-party engineer, Haas and Cobb Petroleum Consultants, LLC ("Haas & Cobb" or "Cobb"), reflects LHO to have proven reserves of approximately 14.0 million barrels of oil and 2.8 billion cubic feet of natural gas. The mapped original-oil-in-place ("OOIP") in the LHO leasehold is approximately 876 million barrels of oil in the Grayburg and San Andres intervals and 80 million barrels in the Seven Rivers interval for a total OOIP of approximately 956 million barrels of oil.

Our primary production is currently from the Seven Rivers zone. In addition to proven reserves, the Company believes it may access an additional 34 million barrels of oil by adding perforations in the Grayburg and San Andres formations, plus another 40 million barrels from the horizontal drilling program in the San Andres. With proven oil reserves of over 15 million barrels, combined with the potential 74 million additional barrels from the Grayburg and San Andres zones, LHO should produce oil and a revenue stream for more than two decades with a low decline rate.

About the South Justis Field Property

The South Justis Field ("SJF") is a carbonate reservoir, similar to the rest of the Permian. The SJF was first developed in the 1960's and had an initial production in the 6,000 BOPD range. The waterflood implemented at a cost of $40 million dollars in the 1990's by a major oil company had mediocre performance due to poor connectivity between wells, which indicates an opportunity for horizontal infill well drilling. The subsequent owners of the SJF had higher priorities, which led to an increase in idle wells with downhole failures, thus allowing the production to drop dramatically. The Seller acquired the field and has reactivated several wells with good results increasing the production of oil. This indicates that there are a significant number of wells that can be reactivated to increase production on existing wells.

The SJF comprises 5,360 contiguous acres with 208 combined producing and injection wells with well spacing of 50 acres. The field is located in the Central Basin of the prolific Permian Basin in Lea County, New Mexico located approximately 100 miles from EON's Grayburg-Jackson Oil Field property. The producing formations include the Glorietta, Blinebry, Tubb, Drinkard and Fusselman intervals that range from 5,000 feet to 7,000 feet in depth. The original-oil-in-place ("OOIP") is approximately 207 million barrels of oil.

About EON Resources Inc.

EON is an independent upstream energy company focused on maximizing total returns to its shareholders through the development of onshore oil and natural gas properties in the United States. EON's long-term goal is to maximize total shareholder value from a diversified portfolio of long-life oil and natural gas properties built through acquisition and through selective development, production enhancement, and other exploitation efforts on its oil and natural gas properties.

EON's Class A Common Stock trades on the NYSE American Stock Exchange (NYSE American: EONR) and the Company's public warrants trade on the NYSE American Stock Exchange (NYSE American: EONR WS). For more information on EON, please visit the Company's website: https://eon-r.com/

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.
mike@plrinvest.com

SOURCE: EON Resources Inc.

View the original press release on ACCESS Newswire

FAQ

How much funding is EON Resources (EONR) seeking to raise through the VMA?

EON Resources is seeking to raise $41-53 million through volumetric funding (VMA) via the sale of overriding royalty interest (ORRI) packages.

What are the key benefits of EON Resources' (EONR) debt restructuring plan?

The plan includes a $20.5 million cash settlement to reclaim 10% ORRI, retirement of a $22 million Seller note, return of $24 million preferred shares, and monthly cash flow improvement of $400,000-$600,000.

When will EON Resources (EONR) begin its San Andres horizontal drilling program?

EON Resources targets to commence the initial San Andres horizontal drilling program in the first quarter of 2026.

How many barrels of reserves does EON Resources (EONR) expect to develop through the farmout agreement?

Through the farmout agreement, EON Resources expects to develop reserves estimated at up to 40 million barrels in the San Andres formation.

What is the expected timeline for EON Resources (EONR) funding closure?

EON Resources expects to close and fund the transaction in approximately four weeks from the announcement date.