Financial Data and Key Metrics Changes - The average price of oil dropped from $70 to $61 per barrel, but hedging mitigated this drop, keeping overall revenues flat [17][18] - Revenues remained level as hedging efforts offset a temporary dip in production [16] - Interest expense decreased by $230,000 per quarter compared to 2024, reflecting ongoing balance sheet improvements [17][20] Business Line Data and Key Metrics Changes - Production at the Grayburg Jackson field increased from approximately 800 barrels per day to about 920 barrels per day, with a goal to reach 1,400 to 1,500 barrels per day by year-end [12][30] - The South Justice field's production rose from 88 barrels per day at acquisition to 117 barrels per day after reactivating idle wells [36][37] Market Data and Key Metrics Changes - The company is targeting funding between $40 million and $50 million to support operations and reduce debt [8][27] - The company anticipates being cash flow positive in Q4 2025, with a significant increase in cash flow expected from debt reduction [13][14] Company Strategy and Development Direction - The company is focused on increasing production through horizontal drilling, with plans to kick off a drilling program in late Q1 2026 [35][62] - Management aims to retire senior debt and seller obligations, which will significantly enhance cash flow [13][27] - The company is exploring overriding royalty interest (ORE) as a financing strategy to avoid dilution of shares and reduce financial risk [58][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about transitioning from a struggling company to a more successful entity, with significant potential for growth in 2026 [40][84] - The management team is confident in their ability to navigate the current oil market, despite potential price fluctuations [47][48] Other Important Information - The company has made significant progress in reducing general and administrative costs, with ongoing efforts to further decrease expenses [19][73] - The company has successfully reduced senior debt from $28 million to approximately $21 million [20] Q&A Session Summary Question: What are the expectations for oil prices going into winter? - Management indicated that oil prices may remain in the $60 range, with geopolitical factors influencing market conditions [46][48] Question: Will Chevron be purchasing the oil produced from new wells? - Management confirmed Chevron's interest in purchasing increased production, indicating a positive relationship with the buyer [52] Question: How important are the four rigs on both properties for the next two quarters? - Management emphasized the critical role of the rigs in boosting production, with plans to optimize their use across fields [69][70] Question: Is there a plan to reduce legal consulting expenses? - Management acknowledged ongoing discussions to reduce costs and improve efficiency in legal and consulting services [72][73] Question: What is the expected impact of horizontal drilling on production? - Management explained that horizontal drilling could significantly increase production rates, potentially yielding 400 to 600 barrels per day per well [63][64]

Financial Performance & Outlook - EON Resources anticipates reaching breakeven by the end of 2025[3] - Revenues increased from $3,283,099 in Q1 2024 to $4,583,148 in Q2 2025[5] - Lease operating expenses decreased from an average of $718,000 per month in 2024 to $665,000 per month in Q1 and Q2 2025[5,6] - Salaries and fees decreased by over $300,000 per quarter starting in Q1 2025[11] Operations & Production - Oil production experienced a temporary dip, but has recovered to 920 BOPD[17] - South Justis Field production increased from an initial rate of 88 BOPD to 117 BOPD after acquisition in June 2025[18] - 27 wells returned to production, resulting in an estimated increase of 60 BOPD[17] - The company plans to return an additional 40 idle/inactive wells to production[17] Debt & Equity Structure - Convertible Notes balance decreased from an original $9.8 million to $5.6 million[14] - The company is planning volumetric funding of $41 to $53 million to discharge a $20.5 million settlement with the Seller and retire $18.5 million in senior debt[16] - There are 34 million common stock shares outstanding[15]

[Form 8-K Current Report](index=1&type=section&id=Form%208-K%20Current%20Report) This report details the Form 8-K filing for EON Resources Inc., covering company information, preliminary Q2 2025 financial results, exhibits, and official signature [Report Overview and Company Information](index=1&type=section&id=Report%20Overview%20and%20Company%20Information) This section provides basic information about the Form 8-K filing for EON Resources Inc., dated July 24, 2025, including company details, stock trading symbols, and emerging growth company status - EON Resources Inc., a Delaware corporation, filed this Current Report on Form 8-K on July 24, 2025[1](index=1&type=chunk) - The company is identified as an emerging growth company[4](index=4&type=chunk) Securities Registered Pursuant to Section 12(b) of the Act | Title of each class | Trading symbol | Name of each exchange on which registered | | :--- | :--- | :--- | | Class A Common Stock, par value $0.0001 per share | EONR | NYSE American | | Redeemable warrants, exercisable for three quarters of one share of Class A Common Stock at an exercise price of $11.50 per share | EONR WS | NYSE American | [Item 2.02 Results of Operations and Financial Conditions](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Conditions) The company announced its preliminary financial results for the second quarter of 2025 through a press release issued on July 24, 2025, furnished as Exhibit 99.1 - On July 24, 2025, EON Resources Inc. issued a press release providing preliminary financial results for the second quarter of 2025[5](index=5&type=chunk) - The information in the press release (Exhibit 99.1) is being "furnished" and not "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, meaning it has reduced legal liability under that section[6](index=6&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits filed with the Form 8-K, primarily identifying the press release containing the preliminary Q2 2025 financial results as Exhibit 99.1 Exhibits Filed | Exhibit Number | Description | | :--- | :--- | | 99.1 | Press Release of EON Resources, Inc. issued on July 24, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signature](index=3&type=section&id=Signature) The report is duly signed and authorized by Mitchell B. Trotter, the Chief Financial Officer of EON Resources Inc., on July 24, 2025 - The report was signed on behalf of EON Resources Inc. by Mitchell B. Trotter, its Chief Financial Officer, on July 24, 2025[10](index=10&type=chunk)

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, financial instruments, debt, equity, and related party transactions [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Balance Sheet Summary | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Total Assets | $105,963,996 | $102,705,017 | | Total Liabilities | $67,747,584 | $74,985,546 | | Total Stockholders' Equity | $38,216,412 | $27,719,471 | | Cash and cash equivalents | $3,060,971 | $2,971,558 | | Total current assets | $5,875,645 | $5,159,105 | | Total current liabilities | $27,607,625 | $36,390,779 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, presenting revenues, expenses, and net income or loss Statements of Operations Summary | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(2,873,155) | $(5,331,297) | | Total revenues | $9,147,746 | $8,343,894 | | Operating loss | $(299,487) | $(2,592,703) | | Net income (loss) per share – basic and diluted | $(0.15) | $(1.00) | | Gain (loss) on derivative instruments, net | $804,408 | $(2,080,725) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the changes in the company's equity accounts, reflecting transactions such as net income, share issuances, and other comprehensive income Stockholders' Equity Summary | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Total Stockholders' Equity | $38,216,412 | $27,719,471 | - Key Equity Changes (Six Months Ended June 30, 2025): * Shares issued under equity line of credit: **$7,024,332** * Shares issued for conversion of note payables: **$4,550,428** * Shares issued for acquisition of oil and gas leases: **$547,600** * Shares issued for acquisition of oil and gas equipment: **$547,600** * Net loss: **$(2,873,155)**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across its operating, investing, and financing activities over specific periods Cash Flow Summary | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net change in cash and cash equivalents | $89,413 | $(441,706) | | Net cash provided by (used in) operating activities | $(1,796,949) | $2,250,267 | | Net cash used in investing activities | $(2,638,532) | $(1,212,769) | | Net cash provided by (used in) financing activities | $4,524,894 | $(1,479,204) | | Proceeds from sale of common stock (H1 2025) | $7,024,332 | - | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the financial statements, covering accounting policies, financial instruments, debt, equity, and related party transactions [NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS](index=11&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) This note describes the company's core business, operational focus, and addresses the going concern assessment and management's plans to mitigate related risks - EON Resources, Inc. is an independent oil and natural gas company focused on the Permian Basin (Grayburg-Jackson Field in Eddy County, New Mexico)[21](index=21&type=chunk) - The company faces substantial doubt about its ability to continue as a going concern due to a working capital deficit of **$21,731,980** and negative cash flow from operations of **$1,796,949** for the six months ended June 30, 2025[22](index=22&type=chunk) - Management plans to alleviate going concern issues by improving profitability through cost streamlining, maintaining active hedge positions, and issuing additional Class A Common Stock under a **$150,000,000** Common Stock Purchase Agreement[22](index=22&type=chunk) Key Financial Metrics | Metric | June 30, 2025 | | :--------------------------------- | :------------ | | Cash | $3,060,971 | | Working Capital Deficit | $21,731,980 | | Negative Cash Flow from Operations (H1 2025) | $1,796,949 | | Cash Proceeds from Common Stock Purchase Agreement (through June 30, 2025) | $9,652,666 (from 13,000,000 shares) | [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods applied in preparing the financial statements, including revenue recognition, derivative accounting, and oil and gas property accounting - The company's unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC rules[24](index=24&type=chunk) - The company revised its previously issued financial statements for the three months ended March 31, 2025, due to an overstated asset retirement obligation liability and related accretion expense, which was deemed immaterial[26](index=26&type=chunk)[28](index=28&type=chunk) - Key accounting methods include the successful efforts method for crude oil and natural gas properties, fair value accounting for derivative instruments (without hedge accounting), and ASC 606 for revenue recognition[42](index=42&type=chunk)[52](index=52&type=chunk)[55](index=55&type=chunk) Income Tax Rate | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Effective Income Tax Rate | 29% | 23% | [NOTE 3 — DERIVATIVES](index=20&type=section&id=NOTE%203%20%E2%80%94%20DERIVATIVES) This note details the company's use of derivative instruments to manage commodity price risk, including their fair value and impact on financial performance - The company uses crude price differential swaps to manage commodity price risk for oil and natural gas, without applying hedge accounting[74](index=74&type=chunk)[78](index=78&type=chunk)[52](index=52&type=chunk) Derivative Instrument Performance | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net gain (loss) on derivatives | $804,408 | $(2,080,725) | | Net derivative asset (June 30, 2025 / Dec 31, 2024) | $674,314 | $106,397 | [NOTE 4 — LONG-TERM DEBT AND NOTES PAYABLE](index=22&type=section&id=NOTE%204%20%E2%80%94%20LONG-TERM%20DEBT%20AND%20NOTES%20PAYABLE) This note provides a breakdown of the company's long-term debt and notes payable, including terms, maturities, and significant changes during the period Debt Summary | Debt Instrument | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Total Debt | $43,405,137 | $44,093,512 | | Senior Secured Term Loan | $21,386,735 | $23,696,417 | | Seller Promissory Note | $15,000,000 | $15,000,000 | | Convertible Notes Payable | $5,650,000 | $891,363 | | Merchant Cash Advances | $1,368,402 | $948,982 | | Current portion of long term debt | $6,121,756 | $9,080,910 | - The company recognized a gain on extinguishment of liabilities of **$299,601** during the six months ended June 30, 2025, primarily from exchanging notes payable and warrant liabilities for convertible note agreements[209](index=209&type=chunk) - During H1 2025, the company issued **$9,166,500** in new convertible notes and converted **$3,516,500** principal and **$396** accrued interest into **8,956,383** Class A Common Stock shares[100](index=100&type=chunk)[101](index=101&type=chunk) Debt Maturity Schedule | Maturity Period | Principal Amount | | :--------------------------------- | :--------------- | | 12 months ended June 30, 2026 | $6,537,788 | | 12 months ended June 30, 2027 | $31,217,349 | | 12 months ended June 30, 2028 | $5,650,000 | | Total | $43,405,137 | [NOTE 5 — STOCKHOLDERS' EQUITY](index=26&type=section&id=NOTE%205%20%E2%80%94%20STOCKHOLDERS'%20EQUITY) This note details the components of stockholders' equity, including common stock issuances, conversions, and significant agreements affecting equity Stock Outstanding | Stock Class | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Class A Common Stock Outstanding | 34,345,107 shares | 10,323,205 shares | | Class B Common Stock Outstanding | 0 shares | 500,000 shares | - Significant share issuances during H1 2025 include **10,770,000** shares under the Common Stock Purchase Agreement for **$7,024,332** cash, **9,953,980** shares for convertible note conversions, and **2,000,000** shares for oil and gas asset acquisitions[140](index=140&type=chunk)[118](index=118&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) - The Purchase, Sale, Termination and Exchange Agreement (PSTE) was amended, extending the Outside Date to **September 15, 2025**, and adjusting the ORRI purchase price, Seller Note principal, and share consideration[117](index=117&type=chunk) [NOTE 6 — FAIR VALUE OF FINANCIAL INSTRUMENTS](index=30&type=section&id=NOTE%206%20%E2%80%94%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note describes the fair value measurement of the company's financial instruments, including derivatives and warrant liabilities, and the valuation inputs used - Derivative instruments are measured at fair value using Level 2 inputs, resulting in a net derivative asset of **$674,314** as of June 30, 2025 (vs. **$106,397** at Dec 31, 2024)[147](index=147&type=chunk) - Warrant liabilities, due to redemption rights, are accounted for as liabilities and measured at fair value using Level 3 inputs; the estimated fair value was **$0** as of June 30, 2025, as all such warrants were exchanged into convertible notes (vs. **$5,681,849** at Dec 31, 2024)[149](index=149&type=chunk) [NOTE 7 — RELATED PARTY TRANSACTIONS](index=31&type=section&id=NOTE%207%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions and balances with related parties, including officers and entities under common control Related Party Transactions | Related Party | Transaction Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :----------------- | :------------ | :------------------ | | Alexandria VMA Capital, LLC (CEO-controlled) | Referral Fee Payable | $233,000 | $403,000 | | Mr. Caravaggio (CEO) | Private Notes Payable exchanged for Convertible Note | $268,500 (principal of new note) | - | | Donald Orr (Former President) | Settlement Agreement (cash & Class A shares) | $75,000 cash, 200,000 shares | - | [NOTE 8 — COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=NOTE%208%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's commitments and potential liabilities, including legal actions and environmental remediation obligations - The company accrues reserves for probable and estimable loss contingencies related to legal actions, but is not currently involved in litigation expected to have a material adverse effect[155](index=155&type=chunk)[241](index=241&type=chunk) Environmental Liabilities | Liability Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Environmental Remediation Liability | $675,000 | $675,000 | [NOTE 9 — SUBSEQUENT EVENTS](index=32&type=section&id=NOTE%209%20%E2%80%94%20SUBSEQUENT%20EVENTS) This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - Subsequent to June 30, 2025, the company issued **2,800,000** shares under the Common Stock Purchase Agreement for **$973,440** cash and **156,250** shares from the conversion of **$50,000** in convertible notes[158](index=158&type=chunk) - On July 11, 2025, the company entered into a Note Purchase Agreement with White Lion for up to **$1,200,000** in convertible promissory notes, with an initial closing of **$600,000** for **$564,000** cash[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook. It details the operational results for the three and six months ended June 30, 2025, compared to 2024, highlighting changes in revenues, expenses, and profitability. It also discusses market conditions, liquidity, capital resources, and critical accounting estimates, reiterating the going concern uncertainty and management's plans to address it [Overview](index=33&type=section&id=Overview) This section provides a general description of the company's business, operational focus, and key performance metrics, including production volumes - EON Resources, Inc. is an independent oil and natural gas company focused on the Permian Basin (Grayburg-Jackson Field and South Justice Field), primarily using waterflooding recovery methods[162](index=162&type=chunk) Average Daily Production | Metric | Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Average Daily Production (BOE/day) | 708 | 798 | | Change (YoY) | -11.3% | - | - The decrease in production is attributed to increased well downtime, water injection flowline repairs/replacements, and the conveyance of a **10%** Override royalty interest[164](index=164&type=chunk) [Selected Factors That Affect Our Operating Results](index=34&type=section&id=Selected%20Factors%20That%20Affect%20Our%20Operating%20Results) This section identifies the primary internal and external factors influencing the company's financial performance, such as commodity prices, production volumes, and regional market conditions - Operating results are substantially dependent on commodity prices, production volumes, success of development activities, fair value changes in derivative instruments, and operating expenses[165](index=165&type=chunk) - Regional factors in the Permian Basin, such as weather, infrastructure limitations, transportation capacity, and regulatory matters, also affect operations[165](index=165&type=chunk) Price Differentials | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Oil Price Differential (per Bbl) | $0.84 (premium) | $(4.57) (discount) | | Natural Gas Price Differential (per Mcf) | $(0.05) (discount) | $0.34 (premium) | [Market Conditions](index=34&type=section&id=Market%20Conditions) This section analyzes the prevailing market conditions for crude oil and natural gas, including price trends and their impact on the company's realized prices Commodity Prices and Realized Prices | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Average NYMEX Oil Price (per Bbl) | $68.23 | $79.64 | | Average NYMEX Natural Gas Price (per Mcf) | $3.67 | $2.11 | | Effect of Settled Derivatives on Realized Oil Price (per Bbl) | +$2.00 | -$3.16 | | Average Realized Oil Price (after derivatives & differentials, per Bbl) | $69.07 | $75.07 | - Average NYMEX oil prices decreased by **14%** YoY, while natural gas prices increased by **74%** YoY for the six months ended June 30, 2025[171](index=171&type=chunk)[172](index=172&type=chunk) [Results of Operations (Three months ended June 30, 2025 Compared to Three months ended June 30, 2024)](index=35&type=section&id=Results%20of%20Operations%20(Three%20months%20ended%20June%2030,%202025%20Compared%20to%20Three%20months%20ended%20June%2030,%202024)) This section provides a detailed comparison of the company's financial performance for the three-month periods, highlighting changes in revenues, expenses, and profitability drivers Three-Month Operating Results | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Total Revenues | $4,583,148 | $5,060,795 | | Oil and Natural Gas Sales (excluding derivatives) | $3,588,580 | $5,014,043 | | Production Volumes (MBOE) | 60 | 71 | | Net Gain (Loss) on Derivatives | $889,479 | $(83,478) | | Total Expenses | $4,790,860 | $5,389,896 | | General and Administrative Expenses | $1,941,044 | $2,323,662 | | Interest Expense | $1,678,538 | $2,030,317 | - Total revenues decreased by **9.4%** due to a **28%** decrease in oil and natural gas sales and a **15%** decrease in production volumes, partially offset by a significant gain on derivative contracts[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Total expenses decreased by **11.1%**, driven by lower general and administrative expenses (down **16.5%**) and reduced DD&A[174](index=174&type=chunk)[184](index=184&type=chunk)[182](index=182&type=chunk) [Results of Operations (Six months ended June 30, 2025 Compared to Six months ended June 30, 2024)](index=39&type=section&id=Results%20of%20Operations%20(Six%20months%20ended%20June%2030,%202025%20Compared%20to%20Six%20months%20ended%20June%2030,%202024)) This section provides a detailed comparison of the company's financial performance for the six-month periods, highlighting changes in revenues, expenses, and profitability drivers Six-Month Operating Results | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $9,147,746 | $8,343,894 | | Oil and Natural Gas Sales (excluding derivatives) | $8,120,717 | $10,163,801 | | Production Volumes (MBOE) | 128 | 147 | | Net Gain (Loss) on Derivatives | $804,408 | $(2,080,725) | | Total Expenses | $9,447,233 | $10,936,597 | | Lease Operating Expenses | $3,914,775 | $4,393,699 | | Depletion, Depreciation and Amortization | $555,265 | $998,616 | | General and Administrative Expenses | $4,025,589 | $4,633,486 | | Interest Expense | $3,422,784 | $3,890,899 | - Total revenues increased by **9.6%** despite a **20%** decrease in oil and natural gas sales and a **13%** decrease in production volumes, primarily due to a significant shift from a derivative loss to a gain[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - Total expenses decreased by **13.6%**, driven by lower lease operating expenses (down **10.9%**), DD&A (down **44.4%**), and general and administrative expenses (down **13.1%**)[193](index=193&type=chunk)[199](index=199&type=chunk)[201](index=201&type=chunk)[203](index=203&type=chunk) [Liquidity, Capital Resources and Going Concern](index=43&type=section&id=Liquidity,%20Capital%20Resources%20and%20Going%20Concern) This section assesses the company's ability to meet its short-term and long-term obligations, discusses capital resources, and addresses the going concern uncertainty and management's mitigation strategies - As of June 30, 2025, the company had **$3,060,971** in cash (including **$2,600,000** restricted) and a working capital deficit of **$21,731,979**, raising substantial doubt about its ability to continue as a going concern[211](index=211&type=chunk) Cash Flow from Operations | Metric | Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Cash Flow from Operations | $(1,796,949) | $3,700,686 | - Management plans to address the going concern by streamlining costs, maintaining active hedge positions, and utilizing its **$150 million** Common Stock Purchase Agreement, which has provided **$10,435,066** in cash proceeds to date[212](index=212&type=chunk) [Cash Flows](index=44&type=section&id=Cash%20Flows) This section analyzes the company's cash generation and usage from operating, investing, and financing activities, explaining significant changes between periods Cash Flow Activities | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(1,796,949) | $3,435,257 | | Net cash used in investing activities | $(2,638,532) | $(3,430,552) | | Net cash (used in) provided by financing activities | $4,524,894 | $(670,924) | | Net change in cash and cash equivalents | $89,413 | $(666,219) | - Net cash provided by financing activities (**$4,524,894**) primarily from common stock sales (**$7,024,332**) offset negative cash flows from operating and investing activities, resulting in a net increase in cash[217](index=217&type=chunk) [Off-Balance Sheet Arrangements](index=44&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet arrangements that could impact the company's financial condition or results of operations - The company did not have any off-balance sheet arrangements as of June 30, 2025[218](index=218&type=chunk) [Contractual obligations](index=44&type=section&id=Contractual%20obligations) This section outlines the company's significant contractual commitments, including debt obligations and other liabilities with determinable or estimable settlement amounts - The company has contractual commitments under its Senior Secured Term Loan, Seller Note, Private Notes Payable, and commodity derivative contracts[219](index=219&type=chunk) - Other liabilities include environmental contingencies and asset retirement obligations, for which settlement amounts and timings are not precisely determinable[220](index=220&type=chunk) [Critical Accounting Estimates](index=44&type=section&id=Critical%20Accounting%20Estimates) This section discusses the accounting estimates that require significant judgment and are crucial to understanding the company's financial position and results - Key critical accounting estimates include proved reserve estimates (impacting depletion and impairment), impairment of proved oil and gas properties, and asset retirement obligations[222](index=222&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - These estimates involve significant judgment and assumptions, and are subject to revision based on new data, changing economic conditions, and evolving regulations[222](index=222&type=chunk)[227](index=227&type=chunk) [New Accounting Pronouncements](index=46&type=section&id=New%20Accounting%20Pronouncements) This section refers to the discussion of recently issued accounting standards and their potential impact on the company's financial statements - The effects of new accounting pronouncements are discussed in Note 2 to the consolidated financial statements[231](index=231&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk) As a smaller reporting company, EON Resources, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[232](index=232&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting. This weakness stems from insufficient accounting personnel, lack of segregation of duties, issues with complex financial instrument accounting, and inadequate controls for oil and gas activities. Management plans to remediate this by hiring additional staff, improving access to accounting literature, and enhancing communication [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents the conclusions of management's evaluation of the effectiveness of the company's disclosure controls and procedures - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025[234](index=234&type=chunk) - A material weakness was identified in internal control over financial reporting, related to insufficient accounting personnel, lack of segregation of duties, proper accounting for complex financial instruments, and inadequate controls for oil and gas activities[234](index=234&type=chunk)[235](index=235&type=chunk) [Changes in Internal Control over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section describes any material changes in the company's internal control over financial reporting and management's plans for remediation - Management determined that the company did not maintain effective internal control over financial reporting as of June 30, 2025, due to the identified material weakness[237](index=237&type=chunk) - Remediation plans include hiring additional accounting staff, providing enhanced access to accounting literature and research materials, and increasing communication among personnel and third-party professionals[238](index=238&type=chunk) [Part II. Other Information](index=48&type=section&id=Part%20II.%20Other%20Information) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and a list of exhibits [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that are expected to have a materially adverse effect on its financial condition or results of operations - The company is not currently involved in litigation that is expected to have a materially adverse effect on its financial condition or results of operations[241](index=241&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) As of the date of this Quarterly Report, there have been no material changes to the risk factors previously disclosed in the company's annual report on Form 10-K filed on April 16, 2025 - No material changes to risk factors have occurred since the annual report on Form 10-K filed April 16, 2025[242](index=242&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - None[243](index=243&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - None[244](index=244&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not Applicable[245](index=245&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - None of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[246](index=246&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including amendments to agreements, organizational documents, and certifications - The section lists various exhibits, including amendments to the Purchase, Sale, Termination and Exchange Agreement, organizational documents, and certifications[249](index=249&type=chunk) [Part III. Signatures](index=50&type=section&id=Part%20III.%20Signatures) This part contains the required signatures of the company's authorized officers, certifying the accuracy and completeness of the report [Signatures](index=50&type=section&id=Signatures) This section contains the required signatures of the company's authorized officers, including the Chief Executive Officer and Chief Financial Officer, certifying the report - The report was signed by Dante Caravaggio (Chief Executive Officer) and Mitchell B. Trotter (Chief Financial Officer) on August 14, 2025[255](index=255&type=chunk)

Summary of EON Resources Inc. Special Conference Call Company and Industry - **Company**: EON Resources Inc. - **Industry**: Oil and Gas, specifically focusing on the Permian Basin Key Points and Arguments 1. **Acquisition Announcement**: EON Resources has acquired the South Justice Field in the Permian Basin, New Mexico, for a total of 1 million shares of Class A common stock, valued at approximately $500,000 in cash [5][7][20]. 2. **Current Production and Cash Flow**: The field is currently cash flowing $100,000 per month, translating to an annual net cash flow of $1.2 million [8][20]. 3. **Production Potential**: The field had a production of 50 barrels per day before acquisition, which was doubled to 100 barrels per day through minor repairs. EON aims to increase production to between 250 to 400 barrels per day within a quarter [9][11][19][66]. 4. **Field Characteristics**: The South Justice Field consists of approximately 5,400 acres with 208 producing and injection wells. The field has a history of low decline rates and significant oil reserves, with an estimated 15 million barrels recoverable through reactivation and drilling [13][14][18][26]. 5. **Comparison with Existing Assets**: The acquisition increases EON's oil in place by 20% and acreage in the Permian by 33%, enhancing overall production by 10% immediately and 20% in the near term [27][26]. 6. **Operational Strategy**: EON plans to reactivate idle wells and utilize existing infrastructure to minimize costs. The company expects minimal impact on general and administrative expenses [8][24][27]. 7. **Market Valuation**: The purchase price is considered reasonable compared to market values for similar fields, with estimates of $20,000 to $50,000 per flowing barrel for more developed fields [20][21]. 8. **Future Drilling Potential**: EON sees potential for horizontal drilling in the South Justice Field, similar to their existing Grayburg Jackson Field, which could further enhance production [14][26]. 9. **Economic Outlook**: The company anticipates needing oil prices around $60 per barrel to be attractive for drilling, with a potential range of $60 to $80 in the future [64][66]. 10. **Funding and Financial Health**: EON is optimistic about securing funding to support operations and retire existing debts, with ongoing discussions with multiple investors [49][52][66]. Other Important Content 1. **Regulatory Compliance**: The acquisition included assurances regarding compliance with state regulations for plugging and abandonment of non-productive wells [85]. 2. **Market Dynamics**: The call highlighted the impact of external factors, such as geopolitical events and U.S. oil policy, on oil prices and drilling activity [60][66]. 3. **Investor Sentiment**: There is a noted concern among investors regarding stock performance, with management emphasizing the long-term value of the acquisition and operational strategy [50][66]. 4. **Chevron Relationship**: EON has a strong relationship with Chevron, which is beneficial for pricing and sales of oil produced from the South Justice Field [96][102]. This summary encapsulates the key discussions and insights from the conference call, providing a comprehensive overview of EON Resources Inc.'s strategic acquisition and operational plans in the oil and gas sector.

Acquisition Highlights - EON Resources Inc acquired South Justis Field (SJF) in Lea County, New Mexico on June 20, 2025[4] - The purchase price was 1 million shares of Class A Common Stock[4] - The acquisition is estimated to generate $1.2 million in net annual cash flow[4] - The working interest is 94% and the net revenue interest is 82%[4] South Justis Field Profile - The field spans 5,360 acres with 208 producing and injection wells[5] - Current production is 108 barrels of oil per day (BOPD) from 19 actively producing wells[5] - Original Oil in Place (OOIP) was 210 million barrels of oil, with 30 million barrels produced to date[5] - EON believes there are 15 million barrels of recoverable reserves[5] Economics and Development Plans - Reactivation of 30 additional wells is planned, with an expected average production of 5-10 BOPD per well[8] - The target is to yield field-wide production of 250 to 400 BOPD[8] - At a stock price of $0.50, the price per flowing barrel is $5,000[10] - Reactivating half of the targeted 30 wells is projected to increase net monthly production by 2,494 barrels, resulting in incremental cash flow of $89,751[10] Summary - The acquisition increases Oil in Place by 20% and acreage in the Permian by 33%[12] - It also increases production by 10%[12]

Financial Data and Key Metrics Changes - The company reported a cash loss per month of approximately $400,000, which is nearly half of what it was a year ago, indicating improved cost management [10][11] - General and administrative (G&A) costs have decreased, with salaries and fees down by $225,000 in Q1 compared to the previous year, translating to an annual run rate reduction of about $1 million [25][70] - Interest expenses dropped by $165,000 for the quarter due to note conversions as part of balance sheet cleanup efforts [19] Business Line Data and Key Metrics Changes - Oil production remained stable, with an uptick in oil revenue attributed to market price fluctuations, while gas revenues increased by $50,000 for the quarter due to higher gas prices [23][24] - The company has hedged 70% of its oil production at $70 per barrel, which mitigates the impact of current lower market prices [11][23] Market Data and Key Metrics Changes - Oil prices have been volatile, affecting stock performance, but the company is hedged to protect against these fluctuations [8][12] - The company is exploring gas opportunities, particularly in specialty gases like helium, which command higher prices compared to conventional gas [47] Company Strategy and Development Direction - The company is focused on reducing debt, with plans to retire approximately $20 million in senior debt and $1.8 million in seller notes in the upcoming quarter [39] - There is a strong emphasis on workovers and drilling preparations, with expectations to drill 3 to 6 wells in Q1 of 2026 [40][75] - The management is optimistic about future acquisitions due to low oil prices, which could be accretive to the company's stock [40] Management's Comments on Operating Environment and Future Outlook - Management believes the oil market has peaked, with expectations of trading between $60 and $80 per barrel, and anticipates that production will not be able to meet increasing demand indefinitely [61][62] - The company is positioned for significant growth in Q3 and Q4 of 2025, with a focus on cost control and smart hedging strategies [76] Other Important Information - The company has received approval for 45 workovers, which will enhance oil production and water injection capabilities [15] - The management team is committed to improving operational safety, reporting no incidents in 2024 and Q1 of 2025 [32] Q&A Session Summary Question: Can you give us some color on your gas operations and what you think the future in gas will be for the company? - Management noted that gas prices have performed better than oil prices, leading to increased gas revenue, and they are exploring gas opportunities, including specialty gases like helium [46][47] Question: How was your relationship with Chevron? - The relationship with Chevron is described as excellent, with Chevron expressing willingness to purchase increased oil production [52] Question: Will the entire deal with Encore close in June, or can it be done in pieces? - The management indicated that the deal is likely to close all at once, with a target date in June but possibly extending to July due to paperwork complexities [56] Question: Can you explain how the hedging program operates and if it generates profit? - The hedging program involves swaps that lock in prices for 70% of production, providing a safety net against market fluctuations [58] Question: What are your thoughts on the oil and gas business in '25? - Management believes the oil market has peaked and anticipates a trading range of $60 to $80 per barrel, with a focus on workovers and better drilling practices [61][62] Question: Do you see an opportunity to acquire rigs at a cheaper price? - The management does not anticipate purchasing a drilling rig but may consider acquiring workover rigs due to favorable market conditions [67] Question: How do you look at 2025, especially with the industry under pressure? - The company is focused on reducing costs and leveraging acquisitions without significantly increasing G&A expenses [70][71]

Financial Data and Key Metrics Changes - The company reported a cash loss per month of approximately $400,000, which is nearly half of what it was a year ago, indicating improved cost management [10][12] - Interest expenses decreased by $165,000 for the quarter due to note conversions as part of balance sheet cleanup efforts [19] - The company has maintained consistent income from operations in the range of $1,800,000 per quarter, with a slight uptick noted [21] Business Line Data and Key Metrics Changes - Oil production remained stable, with an uptick in oil revenue attributed to market price fluctuations, while gas revenues increased by $50,000 for the quarter due to higher gas prices [23] - Lease operating expenses (LOE) decreased to $683,000 per month in Q1, down from $700,000 to $750,000 in the previous year [19][33] - The company has approved 45 workovers, which are expected to significantly increase production once funding is secured [15] Market Data and Key Metrics Changes - The company hedged 70% of its oil production at $70 per barrel, which mitigates the impact of current market price fluctuations [11][23] - Gas prices have performed better than oil prices, leading to increased gas revenue [46] Company Strategy and Development Direction - The company is focused on reducing debt and improving its balance sheet by retiring senior debt and preferred shares [39][78] - There is a strategic emphasis on workovers to increase production in the near term, with plans for drilling in the longer term [39][78] - The company is exploring low-cost acquisitions to enhance its asset base amid low oil prices [40][78] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, stating that the stock is undervalued and that they are positioned for significant growth in the coming quarters [41][78] - The management believes that oil prices will stabilize around $70 per barrel, despite current market forecasts suggesting lower prices [62][66] - The company is actively seeking gas opportunities, including unconventional gas and specialty gas, to enhance revenue streams [46] Other Important Information - The company has made significant progress in reducing general and administrative (G&A) costs, with a target of a million-dollar reduction over the year [25][71] - The company is not planning to purchase its own drilling rig but may consider acquiring workover rigs as market conditions allow [68][69] Q&A Session Summary Question: Can you give us some color on your gas operations and what you think the future in gas will be for the company? - Management noted that gas prices have been more favorable than oil prices, and they are exploring gas opportunities, including specialty gas like helium [46][47] Question: How was your relationship with Chevron? - The company reported an excellent relationship with Chevron, which is interested in increasing oil production from the company [52][53] Question: Will the entire deal with Encore close in June, or can it be done in pieces? - Management indicated that the deal is likely to close all at once, with a target date in late June or early July [56] Question: Can you explain how the hedging program operates and do you make any money off of it? - The hedging program involves swaps that lock in prices for 70% of production, providing a safety net against market fluctuations [58] Question: Can you give your thoughts on the oil and gas business in '25 and how do you feel about what's been going on worldwide? - Management believes the Permian has peaked but expects oil prices to stabilize around $70, with a focus on workovers and better drilling practices [62][66] Question: Do you see an opportunity for you guys on as far as the rig count going down where you'll be able to get rigs at a cheaper price? - Management indicated that while they do not plan to buy a drilling rig, they may consider acquiring workover rigs if market conditions are favorable [68][69] Question: How do you look at 2025, especially with the industry under pressure? - Management is focused on further reducing costs and leveraging acquisitions to maintain a lean operation while expanding growth opportunities [70][73]

Production and Revenue - Average daily production for Q1 2025 was 749 BOE per day, down from 848 BOE per day in Q1 2024, representing a 12% decrease [145][157]. - Total revenues for Q1 2025 were $4,564,598, an increase of 39% compared to $3,283,099 in Q1 2024 [156]. - Average realized oil price per barrel after reflecting settled derivatives was $65.12 in Q1 2025, compared to $62.53 in Q1 2024, indicating an increase of 8.5% [160]. - The average NYMEX oil price for Q1 2025 was $71.84 per barrel, which is 7% lower than the average price of $77.56 in Q1 2024 [151][152]. - The average NYMEX natural gas price for Q1 2025 was $4.94 per Mcf, a 95% increase from $2.67 per Mcf in Q1 2024 [154]. Expenses and Costs - Lease operating expenses decreased to $1,921,321 in Q1 2025 from $2,299,518 in Q1 2024, a reduction of approximately 16.5% [162]. - Depletion, depreciation, and amortization (DD&A) expenses were $97,075 in Q1 2025, significantly lower than $476,074 in Q1 2024, reflecting a decrease of 79.7% [164]. - Production taxes, transportation, and processing costs were $397,216 in Q1 2025, down from $428,280 in Q1 2024, maintaining a consistent 9% of oil and natural gas sales [163]. - General and administrative expenses decreased to $2,084,545 for the three months ended March 31, 2025, down from $2,309,824 in 2024, primarily due to reduced stock-based compensation [166]. - Interest expense decreased to $1,744,246 for the three months ended March 31, 2025, compared to $1,860,582 in 2024, driven by reductions in Senior Secured term loan and Private Notes Payable [167]. Financial Performance - The company recorded a loss on derivative contracts of $85,071 in Q1 2025, compared to a loss of $1,997,247 in Q1 2024, indicating improved management of price risk [159]. - Other revenue related to water services was $117,532 in Q1 2025, down from $130,588 in Q1 2024, reflecting a decrease of 10% [161]. - Accretion expense increased to $335,771 for the three months ended March 31, 2025, from $33,005 in the same period of 2024, with a per BOE increase from $0.43 to $4.98 [165]. - The company recorded a gain on extinguishment of liabilities of $92,294 during the three months ended March 31, 2025, related to the exchange of certain notes payable and warrant liabilities [172]. Cash Flow and Financing - The company reported negative cash flow from operations of $1,827,355 for the three months ended March 31, 2025, compared to positive cash flow of $3,700,686 for the year ended December 31, 2024 [175]. - Net cash used in investing activities for the three months ended March 31, 2025, was $1,117,540, primarily for development costs, compared to $591,003 in 2024 [178]. - Net cash provided by financing activities was $3,047,431 for the three months ended March 31, 2025, mainly from the sale of common stock under the Common Stock Purchase agreement [179]. - The company has a three-year Common Stock Purchase Agreement with a maximum funding limit of $150,000,000 to support operations and production growth [175]. - The company had no off-balance sheet arrangements as of March 31, 2025 [180]. Debt and Liabilities - As of March 31, 2025, the company had outstanding debt totaling $22,563,093 under the Senior Secured Term Loan, $15,000,000 under the Seller Promissory Note, and $2,900,000 of private notes payable, with a working capital deficit of $27,937,557 [174].

EON Resources Inc. Conference Call – April 2025 NYSE American: EONR https://www.EON-R.com/ Presenters 2 • Michael J. Porter – Investor Relations • Dante V. Caravaggio – CEO • Mitchell B. Trotter – CFO • Jesse J. Allen – VP of Operations Why Invest in EON Resources? 3 • World class Permian asset with 1 billion original barrels in place • Repaired and upgraded most of the field condition issues in 2024 • Agreement with Seller has huge benefits (see press release on Feb 11th) • Reduced the original $120 millio ...