Eon NRG Limited (ASX: E2E) recently announced its plan to raise approximately $2.8 million via a pro-rata renounceable entitlement offer to existing shareholders. The Prospectus and acceptance form has already been dispatched to its shareholders with the closing date for entitlement offer scheduled to 28 February 2019.
With this new round of capital raising, the oil and gas energy player looks forward to ramp-up its drilling and permitting activities for Powder River Basin project located in Wyoming, United States.
Eon continues to expand its footprint in Powder River Basin which outlines the highly profitable and prolific hydrocarbon reservoirs. The expansion includes the recent deal the company has executed with Bureau of Land Management to takeover 15000 acres in the Powder River Basin for a lease term of 10 years.
The entitlement offer, however, is partially underwritten by a lead manager, CPS Capital Pty Ltd, to the limit of $1.2 million and meanwhile, the Members of Eon’s Board have confirmed their active participation in the offer. Moreover, in settlement of the offer, the issue of new shares and new options is scheduled to take place on 6 March 2019 to commence trading on a normal settlement basis from 7 March 2019.
Let’s take a look at the company’s recent progress:
In the December Quarter Activity report, Eon NRG reported solid oil and gas production of 533 boepd with a steady cash flow of US$1.85 million net sales receipts for the fourth quarter ended 31 December 2018.
Total net sales revenue of the company was US$1.22 million in Q4 2018, up from US$1.17 million in Q4 2017. The December 2018 quarter revenue was comprised of oil revenue of US$832,003, gas revenue of US$260,266 and NGL revenue of US$123,422. However, it can be seen that a significant hike in average oil price per barrel was utilized to offset the US$7.13 per barrel decline in the NGL’s average sales price.
The core projects of the company include Powder River Basin in Wyoming, Borie Oilfield in DJ Basin, Wyoming, Silvertip Field in Wyoming’s Bighorn Basin and Sheep Springs and Round Mountain oilfields in California. Moreover, the company’s Battery Minerals Division is in the early stages of development, currently focused towards the onshore USA. Eon’s penetration in Battery Minerals segment defines its growth strategy to capture the increasing demand for battery energy, particularly in the electric vehicles space.
For 2019, the company has scheduled the testing of three shut-in oil wells to evaluate production potential especially within Tensleep or Phosphoria formation. Eon believes that these wells could increase substantial production potential of Silvertip Field.
To know more about Eon’s key oil and gas project, Powder River Basin, click here.
E2E last traded at a stock price of $0.007 with a Price to Earnings multiple of 1.270 x and a market capitalisation of $5.69 million as at 22 February 2019. Further, the stock has shown decent improvement in the recent past with a positive return of 31.25% over the past six months.
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