Quarterly Activities Report
- Prospective Cobalt Claims acquired in Nevada, USA
- Successful gas well recompletion at the Silvertip Oil and Gas Field
- Permitting commenced for 2 new wells at the Borie Oilfield
- WTI oil price averaged US$62.89/barrel, up from $55.38/barrel in Q4-17 - current spot price of $68/barrel
- Q1 2018 revenue receipts of $1.45m
- Net positive company cash flow reported for the quarter
2 BATTERY MINERALS DIVISION
During the quarter, Eon announced the acquisition of its cobalt prospect with first 18 mineral claims and recently in April a second group of 24 claims combined covering an area of 840 acres in the Stillwater Range (Table Mountain District), Nevada.
The claims include the historic Gilberts silver, gold and lead mine and there are a number of significant adits and tunnels from previous mineral exploration that date back to the late 1800's. The claims are less than 3 miles (5 km) from the historic Lovelock cobalt mine.
The Company is targeting broadly disseminated mineralisation that has the potential to host significant ore body with cobalt content which would not have been economic to mine over a century ago, when last mined. Eon is applying modern exploration methods to these historic prospects for the discovery of a significant battery mineral deposit such as cobalt.
Eon established the battery minerals division to identify and acquire opportunities in the emerging energy storage sector. The Company has targeted prospective cobalt areas as this is recognised as a mineral that is integral to the emerging battery market and is limited in supply globally relative to its expected demand.
3 BORIE OILFIELD, DJ BASIN, WYOMING
Eon completed the acquisition of the Borie Oilfield and took over as operator in December 2017.
The Borie field has produced over 10,000 barrels of oil in the first six months of ownership by the Company. Three workovers were performed on wells during the first quarter of 2018 and production is ahead of expectation at ~70 bopd.
New wells -
Eon is in the process of permitting two new drills within the Borie Oilfield.
One of these wells will be a vertical Muddy/J Sand development well drilled to a TD of 8,600'.
The second well will be a 4,000-foot horizontal lateral exploration well targeting the Niobrara Chalk formation. A drill stem test (DST) was previously performed in the Niobrara Formation during the drilling of an offsetting vertical Muddy J well that resulted in 1,500 feet of gas, 200 feet of oil gas cut mud, and 70 feet of mud and gas cut oil.
Waterflood Enhanced Oil Recovery (EOR) -
Work is under way for the implementation of an EOR waterflood program in the North Borie portion of the field. The workover on the water injection well and surface pumping equipment should be ready for injection to commence in the month of May.
SILVERTIP FIELD, BIGHORN BASIN, WYOMING
In February, Eon carried out a recompletion of an untested sand lobe within the Meeteetse Formation of the 35-28F well in the Silvertip Field. The 60-day initial production rate for the well was 487 MCF/D and gas production continued to increase for the remainder of the quarter from this well. The well is currently flowing 700 mcd while holding 390 psi of backpressure on the wellbore which demonstrates the reservoir has more lateral extension than expected.
The capital cost of the well recompletion was US$22,000 which was repaid within the first 30 days of production. The recompletion has generated net revenue (after royalties and production tax) of more than US$60,000 in the first 60 days of operation. Additional recompletion opportunities with similar formation characteristics to the 35-28F well are under review and will be permitted in the upcoming months.
Several workovers have also resulted in a 16% increase in oil production.
The Company had a net operating cash flow surplus for the Quarter of US$149,000 and an overall surplus of $83,000 after costs associated with the acquisition of Cobalt claims and bank debt principal repayments.
Total cash at the end of Q1-18 was US$1.343 million of which US$673,000 is held as security for environmental bonds.
The average oil price has increased by 14% from the last quarter of 2017 with the West Texas Intermediate (WTI) spot oil at US$68.26 at the close of trade in the the week ending April 20th, 2018.
Gross production across all fields in Q1-18 was 50,654 BOE, an average of 563 BOEPD. Net sales volume for the quarter was 33,787 BOE.
Gross production and net sales volumes for the last two quarters (Q1-18 and Q4-2017) and corresponding prior year quarter (Q1-2017) are shown in Table 1 (see link below).
To view tables and figures, please visit:
About EON NRG Ltd
EON NRG Ltd (ASX:E2E) is an USA onshore focused energy exploration and production company. The Company's growth path is through drilling of high impact oil exploration wells, supported by its 100% owned and operated long life oil and gas production assets and associated cashflow. The company also has a battery minerals division with prospective leases in Nevada which are at the early stages of low cost exploration.
EON NRG Ltd