Eon NRG Limited (ASX: E2E) today announced its statutory results for the year ended 31 December 2018, reporting 21% growth in Net Revenue compared to the previous corresponding period. The Group’s Sales Revenue increased from $4.1 million in FY17 to $4.98 million in FY18, primarily driven by the increase in oil sales volume.
The company stated that oil sales volumes grew 20% to 54,144 Barrels in 2018 as a result of Borie Field acquisition in December 2017. Borie Oilfield is located west of Cheyenne in the DJ Basin, Wyoming, covering 2,850 acres (Net) lease area all held by production. It has a long production history of oil and gas from conventional vertical wells that produce from the Muddy Formation.
More interestingly, the unit price of oil increased to US$65.14/Bbl in 2018 compared to US$48.45/Bbl in 2017. The oil prices had spread optimism across the entire energy sector in 2018. However, the USA oil services industry reportedly continues to remain competitive with several operators and higher levels of drilling activities being observed throughout North America.
Eon NRG Limited has a strong track record of maintaining positive operating cash flow and generating substantial growth in revenue. It has continued its consistent record of positive EBITDAX (earnings before interest, tax, depreciation, amortisation, impairment and exploration) over the last seven years, including an increase of US$346,475 to US$591,558 in 2018.
In September 2018, Eon announced that it has acquired approximately 15,000 acres of leases in the Powder River Basin (PRB), Wyoming, that has a long history of oil and gas production from multi-stacked pay zones. This underscores the company’s strategy to build its US-based oil and gas business and positions itself to deliver on an active development program in the coming years.
Eon has further recognised a number of high-probability oil wells for drilling in 2019 and beyond, adding to its existing production base of circa 530 boepd from producing oilfields in Wyoming and California.
The company’s penetration in battery minerals sector outlines another major highlight of 2018. Eon diversified its business through the acquisition of 840 acres of battery mineral exploration claims in Stillwater Range, Nevada, which has been identified as having exploration potential for a range of battery minerals including cobalt and copper. It presents the company’s long term strategic view as per which the global energy demands will require a range of new technologies and energy supply and storage solutions in the future.
Recently, Eon has inked an agreement to acquire an 85% interest in the Lovelock and Treasure Box exploration projects and it will spend US$1 million in exploration within the next three years. It has also raised A$2.54 million, before costs, from the placement of new shares under a rights issue which closed in March 2019. These funds are stated to provide the working capital required to support drilling the first Powder River Basin well.
On the debt facility front, the company reported that all repayment obligations and covenants had been met. It further said that the debt facility remains in place with ANB Bank that includes $0.31 million of debt repayment in 2018, taking total debt to ANB Bank as at 31 December 2018 to $6.11 million. Total cash held by the Group at the end of 2018 was $1,175,606.
E2E last traded at $0.006 on 1 April 2019. The stock has soared by 12.50% over last six months.
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