Eon NRG Releases Annual Report for 2018 – A Quick overview

The onshore energy company, Eon NRG Limited (ASX: E2E) recently released its Annual Report for FY2018. As per the company’s Chairman, Mark Stowell, the last 12 months have been a successful period for the company with the acquisition of around 15,000-acre lease holding in the Powder River Basin (PRB), Wyoming, and definition of a number of high impact and high probability oil wells for drilling in 2019 and beyond.

PRB has a long history of oil and gas production from multi-stacked pay zones, and the State of Wyoming is an oil and gas friendly state, which makes this region a good area to operate in. In 2018, the company was focused on identifying potential drill prospects in its PRB acreage, targeting oil from multiple formations, including the Turner, Dakota, Minnelusa and Muddy. Some of the leases, which were acquired by the company, are surrounded by developed oilfields having a long production history. The prolific production rates from these fields along with the improved drilling and completion technology deliver strong well economics for the potential wells within Eon’s leases.

Besides that, the company has also completed a capital raise in March 2019 to support the drilling of the first PRB well. The company has completed a placement of new shares and options via a rights issue, through which it raised A$2.54 million (before costs), which will be used for the advancement of the PRB project. In March 2019, the company announced that it had commenced the permitting of first well to be drilled in the leases that it acquired in the Powder River Basin. The company has identified various other drilling targets in the lease acreage, which will build a pipeline for drilling opportunities beyond 2019.

During the year, the company grew its sales revenues to US$4.98 million and continued its consistent record of positive EBITDAX over the last seven years. The company reported EBITDAX of US$591,558, which was significantly higher than the EBITDAX of US$245,083 in 2017.

The company’s oil sales volumes increased to US$54,144 in 2018, as a result of acquiring the Borie Field in December 2017. At the same time, the company’s natural gas and NGL production volumes decreased by 20% and 26%, respectively, as a result of a natural decline in the production from the Silvertip Field.

In 2018, the company established a battery minerals division and secured rights over 42 lode claims covering 840 acres of land in the Stillwater Range, Nevada, which was seen as having exploration potential for a range of battery minerals, including cobalt and copper.

The company is going to continue its current range of activities in 2019, with a focus on developing the Powder River Basin leases in addition to seeking to acquire new assets that offer exploration potential.

At the time of writing, i.e., on 26th April 2019 AEST 01:30 PM, the stock of the company was trading at a price of A$0.005, with a market capitalisation of ~A$4.62 million.


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