Eon NRG (ASX: E2E) gained massive investor traction today with shares went up by 16.667% during today’s morning session. However, subsequently, the shares rebounded to its last day’s closing price of $0.006 with 8.7 million volume of shares being traded (as at 03:45 PM AEST).
Eon NRG an emerging oil and gas exploration company, all set to position itself as a lucrative energy sector, has been under investor’s radar off late.
Lately, the company has made strong progress in the development of its oil and gas exploration assets, along with continued growth in revenue; the group has been able to successfully maintain its positive operating cash flow.
With regards to its exploration activity, the company has already commenced the permitting process for its first well in the Powder River Basin and soon, it is going to lodge the final permitting application with the relevant government authorities. With these activities, the company is inching closer to enjoy the benefits of a highly prolific Powder River Basin, in which the company had acquired 15,000 acres of leases in September 2018. The company is conducting geological and economic assessment of these leases to identify further high-value drilling opportunities. As per the company’s announcement, the leases are surrounded by developed oilfields, which have long life production, indicating strong well economics for the potential future wells within Eon’s leases.
Some of the PRB leases that were acquired in Natrona County are close to the prolific Teapot Dome and Salt Creek Oil Fields, which have been produced from the multiple formations over a long period of time and are still in production. The company believes that the contiguous nature of these southern leases will allow for broad-scale development if prospective oil resources are identified.
In the last two quarters, the company has produced 90,472 barrels of oil equivalent (BOE) and sold 54,564 net barrels of oil equivalent.
In the first quarter of 2019, the 16% decline in the oil price from Q1-FY18 to Q1-FY19 had a significant impact on oil sales revenue; however, West Texas Intermediate (WTI) oil price has strengthened in April to be as high as US$65.66/barrel with some market indicators hinting continued strength in energy prices.
At its Sheep Springs oilfields, the company operates 12 operating wells with 100% working interest and a net revenue interest of 83%. During the first quarter of 2019, the oil produced from the Sheep Springs field attracted a price premium with the average oil price of $64/Bbl compared to the average West Texas Intermediate (WTI) price of $54/Bbl.
During the first quarter of 2019, the company raised around A$2.544 million from a non-renounceable rights issue; proceeds of which will be used for working capital requirements in relation to the permitting and drilling of the first PRB well, Govt Kaehne #9-29, in 2019.
In the past six months, the share price of the company increased by 12.50% as on 2nd May 2019. At the time of writing, i.e. on 6th May 2019 AEST 3:45 PM, the stock of the company was trading at 0.006, with a market capitalisation of circa $4.62 million.
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