Eon NRG Ltd achieved solid oil and gas production of 533 boepd during the quarter ended 31 December 2018. The outstanding performance of the company outlines the acquisition of 15,000 acres of oil and gas leases in the Powder River Basin across Wyoming, United States.
ASX-listed Eon NRG Ltd (ASX: E2E) owns and operates gas and oil fields in onshore Wyoming and California, United States of America. Powder River Basin (PRB) marks the most prominent project of the company which contain multiple hydrocarbon reservoirs ranging from shallow to deep length with the significant number of productive formations.
Managing Director John Whisler led company purchased 15,000 acres in the PRB from the United States Department of Interior for a lease term of 10-years and at a royalty rate of 12.5%. The company announced that this acquisition was finalized after receiving the executed leases from the Bureau of Land Management (BLM) financially backed by the company’s robust cash reserves.
On the basis of acquisition-driven strategy, the company focuses on expanding its landholding around the developed oilfields which have long lived production. As a result, Eon further acquired 640 acres land lease from Wyoming State Land Board for a 5-year lease term.
The management has already started its economic and geological assessment to tap the prolific and high-value drilling opportunities with the expansion of the company’s potential acreage position. In the potential drill prospects in Powder River Basin, the company aims to target oil from multiple formations including the Dakota, Turner and Minnelusa.
Moreover, Eon’s team has made a visit to the site to assess the surface topography as well as the design of well pad for potential prospects. Some of the landholding acquired by the company lies within Natrona County, that is to say, close to the high-value prolific Teapot Dome and Salt Creek Oil Fields.
The oilfields have reportedly been produced from the multiple formations present at PRB since a long period of time. Even tracking back to the historical production rates, it can be seen that these fields have demonstrated strong well economics for potential future wells within Eon’s leases with improved drilling and completion technology.
Eon believes that the contiguous nature of these fields will pull up the scalability and development at Powder River Basin provided the prospective oil resources are identified. Environmental contractors have reportedly commenced the regional reviews and preliminary approvals for new wells at PRB.
The other key project of the company includes Borie Field which produces light sweet crude oil producer in Wyoming, oil and gas field Silvertip in Wyoming and two oilfields in California. In December 2018 quarter, Eon’s California oilfields attracted price premium with the average oil price being $67/Bbl on the back of heavier oil produced from the Sheep Springs Field.
The company is also bagging benefits from the global battery energy demand through its Battery Minerals Division that is committed to delivering low cost, staged exploration, discovery and development of battery mineral resources, serving the current and future power, storage and distribution requirements.
E2E stock price sky-rocketed by 16.667% to last trade at $0.007 on 20 February 2019.Also Read: Eon NRG released its December Quarterly Activities Report
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