EON Resources sees Q2 total revenues ‘little changed’ from Q1

EON provides insight into its preliminary second-quarter 2025 results and other actions reflecting a rebound in production after temporary impact from field actions; a reduction in field operating expenses, G&A costs and interest expense in Q2; the contracting of a third service rig in the Grayburg-Jackson Field; and the integration of the newly acquired South Justis Field. During the second quarter of 2025 and through this press release date, EON has performed several actions in the Grayburg-Jackson Field to increase profitability going forward. While some of the actions impacted production during Q2, the production rebounded late June to return to a stable production level going into July. The production trends and highlights of the activities in the GJF in Q2 and into July include: Since acquisition of the GJF through the end of Q1 2025, the gross barrels of oil per day produced was stabilized and maintained at approximately 935 BOPD over the 15-month period. During Q2 2025, BOPD temporarily dropped by approximately 100 BOPD resulting in an 835 total BOPD average for the second quarter. In the last third of June and into July, the production returned to an average 935 BOPD run rate. The negative impacts on Q2 production resulted from an equal combination of on-going water injection mechanical problems and downtime required to perform acid treatments and well servicing work to return wells to production. The rebound in production during the last third of June and into July is a result of 12 wells having been treated with acid utilizing an improved proprietary chemical and well servicing work to return additional wells to production. To return wells to production, the Company ramped up the well service rigs in the GJF. The Company contracted a second well service rig in June 2025, in order to return a number of down wells to production. The two rigs have serviced 27 additional wells. A third well service rig was employed in July 2025, which started in the GJF in mid-July. The third well service rig is to primarily focus on saltwater injection wells to sustain long-term production. The Company expects to utilize three well service rigs for the foreseeable future to increase production over the next several quarters. Water injection performance was worse than anticipated. The poor performance combined with contractor delays in installation of a critical replacement water line, impacted Q2 2025 production. Crews have been mobilized to replace and install injection flowlines for a major portion of the GJF. The field team is making good progress to replace our water injection supply lines, returning down wells to production and repairing down water injection wells. In all, the Company expect to add another 100 BOPD in August 2025 by observing the same successful improvements made in June and July 2025. While the oil revenues from production were impacted in Q2 2025, the total revenues for Q2 2025 were little changed from Q1 2025. The impact was mitigated by the Company’s hedging position. The Company recovered approximately $290K of cash as approximately 75% of the oil was hedged at $70.00 per barrel. The non-cash hedge portion had a positive revenue impact of approximately $500K. Mitigating the temporary production impact, cost reduction actions in late 2024 and into 2025 reduced Q1 2025 lease operating expenses, G&A costs and interest expense. The cost reduction trend continued in Q2 2025. Approximately $130k of combined costs were reduced in Q2 2025 from these three categories. The Company’s balance sheet improved in Q2 2025. Former private loan obligations of the Company and related warrant liabilities were exchanged in full for long-term Convertible Notes by the end of Q2 2025. The resulting impact of the exchange was to reduce current liabilities by approximately $6 million. A portion of the Convertible Notes were converted to Class A common shares in Q2 2025 resulting in an overall debt reduction of approximately $3 million during the quarter with a concurrent increase in shareholder equity.