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Permian Basin producer EON Resources Inc. has signed a $22.5 million letter of intent with Enstream Capital Management for well completion funding, the E&P said Dec. 2. The LOI is non-binding.
EON Resources, formerly known as HNR Acquisition Corp., plans to allocate the funds toward developing 45 wells, using low-cost workovers, on its 13,700 leasehold acres in Eddy County, New Mexico.
The funds will also be used for the acquisition of an overriding royalty interest in the leasehold, the company said. Financial details of the acquisition were not disclosed.
EON said the agreement will convert oil and gas "behind pipe" and lower-risk, proved undeveloped reserves into production.
Over the next 12 months, EON expects improved recoverable reserves with a goal of increasing gross oil production by 1,000 bbl/d to 2,000 bbl/d.
The company intends to use the financing to increase “producing reserves, business profitability, bank collateral and value, and balance sheet strength without diluting Company equity,” EON said.
Production is set to begin in first-quarter 2025.
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