A Look At Small-cap Energy Player That Charged Up On ASX Today – ASX: E2E

  • Apr 10, 2019 AEST
  • Team Kalkine
A Look At Small-cap Energy Player That Charged Up On ASX Today – ASX: E2E

Eon NRG Limited (ASX: E2E), headquartered in Denver, Colorado, is USA onshore energy company that is engaged in the exploration and production of oil and gas. The company drills high impact oil exploration wells, supported by its 100% owned and operated long life oil and gas production assets that generate positive cash flow to support the development operations. Besides, it also acquired ~ 840 acres of battery mineral exploration claims in the Stillwater Range, Nevada that provided a secondary exploration opportunity.

Eon NRG’s current market valuation stands at around AUD 3.85 million with ~ 769.89 million outstanding shares. Recently, Merchants Holdings Pty Ltd increased its shareholding in the company from 6.40% to 6.75%. Besides, the company’s Director Mark Stowell purchased 26 million new ordinary shares.

On April 10th, 2019, the EON stock price is trending at AUD 0.006, soaring high by 20% with ~ 10.89 million shares being traded and 769.89 million outstanding shares (As at 2:32 PM AEST).

On the same day, the company reported progress on permitting of its first well, the Govt Kaehne #9-29, located in the Powder River Basin (PRB) Wyoming. Accordingly, Eon has completed the onsite meetings with land surface owners and government authorities; the well location has been staked while the development of site surveys and pad design is underway.

The drilling applications are scheduled for submission to the state and federal authorities in this quarter. Upon the receipt of drilling permits, the well pad will be constructed, and the drilling is planned to a depth of ~6,200 feet in 12 days. Given the success at well, the company is expecting completion of the well for production in further one and half months.

As per company’s CEO, John Whisler, Eon is well prepared for significant oil discoveries in coming months at a good time when the WTI oil price is moving through $64 per barrel.

In 2018, Eon NRG acquired 15,000 acres of leases in PRB from the United States Department of Interior with a lease term of ten years and a net revenue interest of 87.5%. Besides, a further 640 acres with a lease term of five years were also purchased from the Wyoming State Land Board in Converse County. The company is set to identify more potential drill prospects in its PRB acreage.

In December 2017, Eon NRG completed the acquisition of the Borie Oilfield situated in DJ Basin’s West Cheyenne and wholly-owns two California oil fields in the San Joaquin Basin. Subsequently, in 2018, the company carried out field development work at the 100% owned Silvertip Field in the Bighorn Basin. The work included two well recompletions that targeted gas production at a low capital cost to take advantage of higher commodity prices at that time.

The battery minerals division was also established in 2018 to cater to the long-term changes in the global energy demands that would require a range of new technologies, energy supply and storage solutions in the future.

On April 1st, 2019, Eon NRG released its Annual Report for 2018. During the year, the company recorded a sales volume of 124,251 and sales revenue of $ 4.98 million, which is 21% higher than $ 4.10 million in the previous year 2017, majorly driven by oil sales.

Oil sales volumes increased 20% from 44,949 barrels in FY2017 to 54,144 barrels in FY2018. With increase in realised oil price from $48.45/Bbl in FY17 to $65.14/Bbl in FY18, the Net Revenue from oil sales witnessed an uptick from $2.17 million last year to $3.53 million in the fiscal year.

As the revenue continued to grow, the EBITDAX (earnings before interest, tax, depreciation, amortisation, impairment and exploration) also remained consistently positive at $ 591,558, as compared to $245,083 in the previous corresponding period.

The balance sheet reflects $3.96 million Net Assets as at December 31st, 2018. The company reported ~$748K operating cash inflow attributed mainly to cash receipts from customers. The company stayed committed towards oil property development, spending $644k in FY18.


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