EON Resources (EONR, Financial) has announced a strategic acquisition through its subsidiary, EON Energy, by signing a Purchase and Sale Agreement to secure significant interests in the South Justis Field in Lea County, New Mexico. The deal involves EON Energy obtaining a 94% working interest in the field by exchanging 1 million Class A common shares, without involving any cash or debt. The acquisition is set to enhance EON Energy's cash flow by an estimated $1.2 million annually.
The effective date for the acquisition is June 1, with closure anticipated on June 20. Currently, the South Justis Field yields 108 barrels of oil daily from 19 active wells, contributing an annual net cash flow of approximately $1.2 million with negligible impact on general and administrative costs. The field holds the potential to significantly increase production, possibly doubling or tripling within a year, by reactivating idle wells.
The South Justis Field encompasses 5,360 leasehold acres and features 208 wells, split evenly between oil-producing and water injection wells. EON Energy aims to develop 15 million barrels of recoverable reserves through existing and new well drilling. The anticipated 94% working interest comes with an 82% net revenue interest. EON Energy plans to reinstate 30 wells within the year, targeting a production rise to 250-400 BOPD, leveraging insights from their operations in the Grayburg-Jackson Field. Initially, the seller will continue managing operations, ensuring a smooth transition as existing employees join EON Energy.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for EON Resources Inc (EONR, Financial) is $6.00 with a high estimate of $6.00 and a low estimate of $6.00. The average target implies an upside of 1,053.18% from the current price of $0.52. More detailed estimate data can be found on the EON Resources Inc (EONR) Forecast page.
Based on the consensus recommendation from 1 brokerage firms, EON Resources Inc's (EONR, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
