Half Year Accounts and Appendix 4D
During the half year to 30 June 2019, the Company's principal activity was the exploration of new leasehold acreage in the Powder River Basin, Wyoming which was acquired in 2018.
Review of Operations
The Company's core objective is to expand its production, oil and gas reserves, cashflow and improve its profitability by focusing on oil and gas exploration and development activities. The acquisition of 15,000 acres of leases in the Powder River Basin ("PRB"), Wyoming in September 2018 provided an opportunity to discover new development opportunities that will enable these goals to be achieved.
Exploration activities are supported by cashflow generated by the Company's owned and operated producing fields in Wyoming and California.
The Company maintains a strong focus on fiscal management of corporate and field operating costs while ensuring that production decline is minimised. Exploration activities will improve reserve replacement for the business which is essential for maintaining sustainable growth.
Eon NRG is using the knowledge base and core skill-sets of its experienced management team to identify conventional drill targets that have the potential for strong economic returns.
Conventional oil and gas wells generally result in initial production (IP) rates than are lower than typical unconventional shale wells. These conventional wells typically have a lower upfront capital cost and flatter production decline curve which yields a superior return on investment. A successful new well generates strong cash flow with value created from an increase in long-life reserves.
The focus on conventional well prospects in areas with proven historic production but with less activity from some of the major E&P companies provides Eon NRG with niche development opportunities. Lower land costs minimise up-front capital requirements to participate in these opportunities.
Eon's Management has a disciplined approach to the geological and technical due diligence on potential prospects which mitigates execution risk at the time of drilling.
The PRB has become one of the most active oil and gas basins in North America. It has seen a significant increase in exploration and production in recent years from large E&P companies including Occidental Petroleum, Chesapeake Energy, EOG Resources, Anschutz and Devon Energy. Operators have targeted conventional and unconventional reservoirs with excellent results.
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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