In the recent past, the US onshore energy company, Eon NRG Limited (ASX: E2E) has made significant progress in building its US-based oil and gas business. Today, the company has not released any price sensitive information, but despite that, the share price of the company went up by 20% during the intraday trade.
In the recent announcement, the company’s CEO, John Whisler noted that these are exciting times for Eon as it is progressing towards the drilling of its first well, the Govt Kaehne #9-29, which is located in the Powder River Basin, Wyoming. The company has commenced the permitting of the well.
In another update, the company informed that it has already completed the onsite meetings with the land surface owners and government authorities and soon, it is going to lodge drilling applications with the state and federal authorities.
In March 2019, the company completed a capital raise, which will provide working capital to support drilling at the first Powder River Basin well. The company completed a placement of new shares and options through a rights issue and raised A$2.54 million (before costs). The company issued 363.5 million shares at a price of A$0.007 per share, with an equivalent number of options exercisable at A$0.015 expiring on 22 February 2021. These funds were raised for the purpose of working capital to be used in the advancement of new well permitting and drilling. Further, this equity strengthens the Company’s financial position and ensures that its drilling program for 2019 is well-funded.
As a result of the completion of the rights issue announced in February 2019, the exercise price of the options that were issued in November 2017, with an expiry date of 29 November 2019, was changed from A$0.020 to A$0.0188 per option in accordance with their terms of issue.
In FY2018, the company grew its revenue and maintained positive operating cash flow. Further, the company has continued its consistent record of positive EBITDAX (earnings before interest, tax, depreciation, amortisation, impairment and exploration) over the last seven years. In FY18, the company reported EBITDAX of US$591,558.
The company is currently having a mix of exploration and producing assets, which provide strong growth potential as well as long-life oil and gas production assets with positive cash flow to support the development operations. Besides this, the company also has 840 acres of battery mineral exploration claims in Nevada, which provides a secondary exploration opportunity. The low-cost exploration work is continuing on these claims.
During FY18, the net revenue from sales increased by 21% as compared to 2017, with increased oil sales volumes due to the acquisition of Borie Field in December 2017. At the end of 2018, the company had total cash of US$1,175,606, out of which US$676,434 is held as a security deposit for the environmental bonds associated with the Silvertip and Borie Fields.
The company established a battery minerals division in 2018, with a long-term strategic view that the global energy demand will require a range of new technologies, energy supply and storage solutions in the future.
At the time of writing, i.e. on 16 April 2019 AEST 02:00 PM, the stock of the company is trading at a price of A$0.006, up by 20% during the day’s trade with a market capitalisation of ~A$3.85 million.
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