EON Resources Inc. Highlights Operating Revenue Growth and Progress on Permian Basin Horizontal Development

A non-cash derivative loss left reported quarterly revenue down 73%, despite growth in revenue before derivative adjustments.

Rhea-AI Summary

EON Resources (NYSE American: EONR) reported approximately 19% sequential growth in operating revenue before derivative adjustments for the first quarter of 2026. Revenue before those adjustments reached $4.22 million, versus $3.54 million in Q4 2025. A $3.25 million non-cash derivative loss left reported revenue at $968,193, down 73%.

The first two San Andres horizontal wells, in which EON holds a 35% working interest, began initial flowback and recovery of fracturing fluids; permanent production facilities are operational. First-oil timing and subsequent production performance cannot yet be reliably predicted. San Andres production is unhedged. Grayburg-Jackson hedges provide $950,000 monthly protection against approximately $700,000 in monthly lease operating expenses, leaving $250,000 for overhead. EON has no senior debt and expects a $2.2 million non-cash derivative revenue benefit in Q2 2026.

8 points · 0 major

PositiveiHow this balance works

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Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

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0 major · 3 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointOperating revenue before derivative adjustments rose approximately 19% to $4.22 million in Q1 2026 from Q4 2025.
• Moderate pointGrayburg-Jackson hedges provide $950,000 monthly protection, covering approximately $700,000 in lease expenses and $250,000 for overhead.
• Moderate point. Forward-looking: it has not happened yet and may not happen.EON expects significant revenue growth from its Grayburg-Jackson San Andres horizontal drilling program.
• Moderate point. Forward-looking: it has not happened yet and may not happen.EON expects a $2.2 million non-cash derivative revenue benefit for Q2 2026.
• Minor pointSan Andres wells with EON's 35% working interest began initial flowback; permanent production facilities are operational.

3 minor points

• Minor pointEON has no senior debt.
• Minor pointSouth Justis, purchased in June 2025, adds average unhedged production of 1,600 net oil barrels monthly.
• Minor pointGrayburg-Jackson waterflood production not hedged averages 3,000 net oil barrels monthly.

Negative

• Moderate pointReported Q1 2026 revenue fell 73% to $968,193 from $3,579,852 in Q4 2025.
• Minor pointNon-cash derivatives shifted to a $3,254,915 loss in Q1 2026 from a $43,225 gain in Q4 2025.
• Minor pointSan Andres first-oil timing and subsequent production performance cannot yet be reliably predicted.

Key Figures

Operating revenue before derivative adjustments: $4.22 million; +19% Reported revenue: $968,193; -73% Non-cash derivative impact: ($3.3) million +3 more

Operating revenue before derivative adjustments

$4.22 million; +19%

Q1 2026 vs. $3.54 million in Q4 2025

Reported revenue

$968,193; -73%

Q1 2026 vs. $3,579,852 in Q4 2025

Non-cash derivative impact

($3.3) million

Q1 2026 revenue impact

Expected derivative impact

$2.2 million

Expected Q2 2026 revenue pickup

Wells commencing flowback

2 wells

San Andres horizontal development

Working interest

35%

First two San Andres horizontal wells

Historical Context

1 past event · Latest: Oct 13

1 event

1. Oct 13

   Earnings and drilling

   24h Move

   +1.9%

   Q1 revenue excluding derivatives was reported; two horizontal wells were expected to produce in October.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

working interest, lease operating expenses, original oil in place, waterflood

4 terms

working interest technical

"maintains a 35% working interest have commenced initial flowback operations"

The working interest is the percentage ownership one party holds in an oil or gas lease that gives them the right to a share of production and also the obligation to pay a proportional share of exploration, development and operating costs. Think of it like owning a slice of a cake but also agreeing to pay part of the bill to bake it: a larger working interest means bigger potential revenue when wells produce, but also larger exposure to costs and liabilities if things go wrong.

lease operating expenses financial

"protect a larger percentage of lease operating expenses"

Costs required to keep a leased property or asset running, including routine maintenance, repairs, utilities, insurance, property taxes and management fees that the lessee or lessor must pay while the lease is active. Investors care because these recurring outlays reduce net income and cash flow from the lease—like owning a rental where you still pay for upkeep—so they affect profitability, yield and the true return on an investment tied to leased assets.

original oil in place technical

"almost 1 billion barrels of estimated original oil in place"

Original oil in place (OOIP) is an estimate of the total quantity of crude oil contained in a subsurface rock formation before any production has occurred, like measuring how much water a sponge holds before you squeeze it. For investors it matters because OOIP sets the physical ceiling on how much oil could possibly be recovered; combined with the share that can realistically be produced (the recovery factor), it helps determine reserve size, potential revenue and the technical and financial risk of a project.

waterflood technical

"current oil production not hedged from the GJF waterflood program"

Waterflood is a method oil producers use to get more oil out of an underground reservoir by pumping water into the ground to push remaining oil toward production wells. It matters to investors because it can raise short‑term output, extend the life of a field and change the cost and value of reserves — like squeezing extra syrup from a sponge by flushing it with water, improving how much product a given asset can deliver.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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HOUSTON, TX / ACCESS Newswire / October 20, 2026 / EON Resources Inc. (NYSE American:EONR) ("EON" or the "Company") is an independent upstream energy company with approximately 20,000 leasehold acres in the Permian Basin and approximately 1.2 billion barrels of original oil in place. On October 13, 2026, the Company filed its 10-Q for the first quarter of 2026, and issued a press release analyzing the first quarter results. Management believes operating performance and development milestones could support meaningful revenue growth over the coming quarters.

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.

	Q1-2026	Q4-2025	Percentage
Revenues, net of derivatives	4,223,108	3,536,628	19%
Non-cash derivatives	(3,254,915)	43,225
Revenues - Reported	968,193	3,579,852	(73%)

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.
mike@plrinvest.com

SOURCE: EON Resources Inc.

View the original press release on ACCESS Newswire

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

Why did EON Resources' reported revenue fall in Q1 2026 despite operating revenue growth?

A $3,254,915 non-cash derivative loss reduced reported revenue to $968,193 despite approximately 19% sequential growth in revenue before derivative adjustments. The benchmark oil price rose from $57 per barrel on December 31, 2025, to $101 per barrel on March 31, 2026, producing the negative derivative adjustment.

What is the status of EON Resources' first San Andres horizontal wells?

The first two wells have begun initial flowback and recovery of fracturing fluids, with all permanent production facilities installed and operational. EON holds a 35% working interest. The exploratory development does not yet support reliable predictions of first-oil timing or subsequent production performance, and its production is not hedged.

When will EON Resources provide further San Andres production updates?

EON plans to communicate meaningful milestones after sufficient production data becomes available, technical evaluation is completed and working-interest parties coordinate. No specific update date is given; the company's stated approach depends on operational progress and sufficient data.