Energy player, Eon NRG Limited (ASX: E2E), formerly Incremental Oil and Gas Limited, is a rare microcap company building a business on drilling conventional exploration wells. The company currently has two divisions: Oil and gas division; and Battery minerals division.
Under its oil and gas division, the company holds asset portfolio of exploration and producing assets located in onshore USA basins and under its battery minerals division, the company currently holds 42 lode claims, covering an area of 840 acres in the Stillwater Range, Nevada.
Oil and Gas Division
Powder River Basin – Wyoming
- Eon holds 15,750 acres of oil and gas leases in the Powder River Basin (PRB) across three counties in Wyoming;
- There are a large number of productive formations in the PRB, which have been targeted by historical vertical well development;
- PRB contains multiple hydrocarbon reservoirs ranging from shallow to deep which are prolific and highly profitable;
- Eon’s first PRB well, Govt Kaehne #9-29, is expected to spud in Q4-19 with the drill duration of 10 to 14 days;
- First oil sales expected by the end of 2019;
- Well pad and access road earthworks are completed;
- Capstar drill rig #312 is selected to drill the well with experienced crew.
Borie Field – Wyoming
- Purchased in the year 2017, the Borie Field produces light sweet crude oil and has prospective drilling upside in a number of formations;
- The Borie Field has a long production history of oil and gas from conventional vertical wells that produce from the Muddy Formation;
- A number of other workovers were carried out at Borie in Q1 and Q2-19 which resulted in an increase in production;
- Eon believes that Borie Field may have the potential for higher production from formations that are behind pipe in existing wells and works to determine the best way to access these additional reserves is ongoing.
Silvertip Field – Wyoming
- Located in the Bighorn Basin, Wyoming, the Silvertip Field produces gas and oil. In the last 10 years, many of the wells at this field have been drilled and produced by modern surface facilities;
- The Silvertip Field has significant infrastructure including a fully functioning gas processing plant with a capacity of 4.5 MMcf per day, oil and NGL storage tanks, a field gas pipeline network;
- Eon is focused on further improving the efficiency of the field through optimising the infrastructure (gas processing plant), optimising well performance and assessing the potential for oil and gas production from deeper formations in the Field.
In the San Joaquin Basin, Eon owns 100% of two fields:
Sheep Springs field – 160 net acres (all held by production)
Round Mountain- 320 net acres (all held by production)
- Work relating to the water disposal processes at the Sheep Springs Field has been carried out by Eon;
- The California Water Board Authority has endorsed the monitoring and disposal systems that the Company has in place with permits provided for these facilities.
Battery Minerals Division
- Battery minerals division was established in 2018 by Eon with a long-term strategic view that global energy demands will require a range of new technologies and energy supply and storage solutions in the future;
- In 2018, Eon 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
- Eon is undertaking exploration work at these claims with a joint venture partner, Canada Cobalt Works.
As PRB has become one of the most active oil and gas basins in North America, EON is currently focussed on the development of PRB leases which it had acquired in September 2018.
First PRB Well
Eon is soon going to drill its first PRB Wellwhich as per Managing Director Mr. John Whisler will be the most significant milestone for the Company in the last few years.
The company has received the approvals for drilling by the Federal and State authorities and has already completed the construction of the well pad and access road for the well. Govt Kaehne #9-29 well is expected to spud in Q4-19 and the first oil sales is expected by the end of 2019.
Why is Govt Kaehne #9-29 well important to E2E?
- Well is located in a structurally high position in a reservoir that is oil rich with 30-40’ of pay expected in the Dakota Formation;
- Directionally drilling the well to intersect the targeted pay;
- Close to service town (Gillette) and good access for transportation of the oil from storage;
- Offset wells have good initial production rates and estimated ultimate recovery;
- Strong water drive which results in higher recovery and lower production decline rates
- 100% working interest and 87.5% net revenue interest
Eon NRG – Investment Theme
E2E’s stock last traded at a price of $0.005 on 16 September 2019 with a market capitalisation of circa $3.85 million.
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