Production and Reserves - EON Resources has 956 million barrels of Original Oil in Place (OOIP) and expects to triple proven reserves in the next 3-4 years[9]. - Production is projected to increase by 1,000 barrels per day within the next 24 months, with a target of 2.5 times increase in BOEPD by the end of 2028[18]. - The company has stabilized production at 900 BOEPD after acquisition and is now seeing an upward trend in production levels[18]. - The company operates 550 producing wells, tapping 40% of the reserves, with 85% of production being crude oil[50]. Cost Management - The company aims to reduce workover costs per well to approximately $150,000 from initial estimates of $250,000 through scientific and analytical approaches[19]. - The management team is focused on reducing general and administrative costs in 2025, with expected reductions in insurance costs by $500,000 and professional fees to a lower annualized run rate of $2 million[19]. - Lease operating expenses averaged $765,000 per month in Q1 and decreased to $700,000 for the remainder of 2024[52]. - General and administrative costs included $2.8 million in equity-based costs, primarily related to employee equity instruments and acquisition-related fees[57]. Strategic Initiatives - EON plans to utilize 550 existing wells in the Grayburg-Jackson oil field to recover proven reserves without new drilling, minimizing upfront capital expenditures[20]. - The company is actively exploring acquisition opportunities in the Permian Basin, which has seen over $100 billion in recent M&A activity[14]. - EON's operational strategy includes a horizontal drilling program in the San Andres expected to commence in Q1 of 2026[18]. - EON is implementing AI automation to enhance operational efficiencies and reduce costs as new wells are brought into production[19]. Financial Performance - The average oil price per barrel fluctuated, with Q3 reaching $83.80 and Q4 dropping to $67.05, resulting in total revenues of $19,418,919 for the year[52][53]. - Cash-based revenues averaged approximately $5 million per quarter, with total cash revenues of $19,863,367 for the year[53]. - The company has a Reserve Based Loan (RBL) of $28 million with a balance of $23 million, maturing in three years at an interest rate of 15%[61]. - The company has a hedging position of over 70% at $70 for 2024, which is considered responsible[54]. Share Structure - The company has 10 million shares of Class A common stock and 500,000 shares of Class B common stock outstanding, with 16.2 million warrants convertible to 12.5 million Class A shares at an exercise price of $11.50[63]. Market Insights - The Northwest Shelf of the Permian Basin is noted for having the largest recoverable reserves among all unconventional basins in the U.S.[32].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41278 EON Resources, Inc. (Exact name of registrant as specified in its charter) Delaware 85-4359124 (State or other jurisdiction o ...

Production and Revenue - Average daily production for the year ended December 31, 2024, was 798 BOE per day, a decrease of 22% from 1,022 BOE per day in 2023[333]. - Total revenues for the year ended December 31, 2024, were $19,418,919, a decrease of 15% from $24,238,482 in 2023[345]. - Oil production decreased by 28% from 349 MBbl in 2023 to 256 MBbl in 2024, while natural gas production decreased from 355 MMcf to 213 MMcf[347]. Pricing and Costs - The average realized oil price per barrel for the year ended December 31, 2024, was $73.61, compared to $69.06 in 2023, reflecting a 6% increase[340]. - The average NYMEX oil price for the year ended December 31, 2024, was $76.55 per barrel, a 1% decrease from $77.64 in 2023[339]. - Lease operating expenses for the year ended December 31, 2024, were $8,614,080, down from $10,146,119 in 2023, but per BOE increased by 19% to $29.59[351]. - Production taxes, transportation, and processing costs were $1,715,792 for the year ended December 31, 2024, representing 8.7% of oil and natural gas sales[352]. Financial Performance - The company recorded a loss on derivative contracts of $850,374 for the year ended December 31, 2024, compared to a gain of $392,765 in 2023[349]. - Depletion, depreciation and amortization (DD&A) increased to $2,407,098 for the year ended December 31, 2024, from $1,849,876 in 2023, with a DD&A rate of $8.27 per BOE, up 48% from $4.53 per BOE in 2023[353]. - Accretion expense decreased to $144,988 in 2024 from $859,102 in 2023, with a per BOE rate of $0.50 compared to $2.32 in 2023, driven by changes in inflation and discount rate assumptions[354]. - General and administrative expenses rose to $10,381,095 in 2024 from $7,253,384 in 2023, including stock-based compensation of $2,778,991[355]. - Interest expense increased significantly to $7,643,200 in 2024 from $1,043,312 in the Successor period of 2023, primarily due to the Senior Secured Term Loan[357]. - The company reported a positive cash flow from operations of $3,700,686 for the year ended December 31, 2024, compared to $484,474 in the Successor period of 2023[368]. Debt and Liabilities - As of December 31, 2024, the company had outstanding debt of $23,641,517 under the Senior Secured Term Loan and a working capital deficit of $31,213,674[365]. - The company recognized a gain on extinguishment of liabilities of $1,638,138 in 2024, including a gain of $1,720,000 related to the settlement of royalties payable[360][361]. - The change in fair value of warrant liabilities resulted in a loss of $804,004 in 2024, compared to a gain of $187,704 in the Successor period of 2023[362]. Investments and Equity - Net cash used in investing activities for 2024 was primarily due to the development of crude oil and gas properties, with significant cash paid for oil and gas property costs in the Predecessor period[370]. - The company has a three-year equity line with a maximum funding limit of $150,000,000, having received $6,992,906 in cash proceeds from the sale of 7,000,000 shares of common stock under this agreement[367]. Risk Management - Derivative financial instruments are used to mitigate commodity price risk, recorded at fair value, with changes recognized in consolidated statements of operations[386]. - Realized and unrealized gains and losses from derivative instruments are reported as a component of revenues in the consolidated statements of operations[386]. - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[386]. - The Company records liabilities for ongoing litigation and environmental remediation, with actual costs potentially varying from estimates due to legal interpretations and regulatory changes[384]. - The fair value of the Forward Purchase Agreement liability was estimated using a Monte-Carlo Simulation, considering future stock price simulations and contractual terms[385]. - The Company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[388].

Production and Reserves - EON Resources Inc. has 956 million barrels of Original Oil in Place (OOIP) and expects to triple proven reserves in the next 3-4 years[5]. - Production is projected to increase by 1,000 barrels per day (bbl/day) over the next 24 months[5]. - EON has identified an additional 34 million barrels of oil in unperforated legacy zones, with plans for infield drilling to optimize recovery[15]. - The Grayburg-Jackson oil field has 550 existing wells that can be utilized to recover proven reserves without significant new capital expenditures[17]. - The company plans to develop an additional 158 waterflood patterns, which includes 95 producing patterns and 63 planned for development (PDNP + PUD)[29]. - The total Original Oil in Place (OOIP) for the 158 patterns is estimated at 50 million barrels of oil (MMBO)[29]. - The company expects full waterflood development to raise gross plateau oil rates to approximately 3,700 BOPD[43]. - The EON field has proven reserves of approximately 20 million barrels of crude oil and 5 billion cubic feet of natural gas[41]. - The company operates 550 producing wells and has 95 active patterns, tapping into 40% of the reserves[41]. Financial Performance - The company reported revenues of $15,708,239 year-to-date, with Q3 revenues reaching $7,364,346, marking a significant increase from previous quarters[47]. - The financial results were impacted by non-cash expenses, with net income for Q3 reported at $(3,841,171)[47]. - Total revenues for the year-to-date (YTD) reached $15,708,239, with Q3 revenues at $7,364,346[56]. - Net loss for the year-to-date (YTD) was $9,172,468, with Q3 net loss at $3,841,171[56]. - Total expenses for YTD were $16,316,136, with Q3 expenses at $5,379,540[56]. - General and administrative expenses for YTD totaled $6,868,748, with Q3 at $2,235,263[56]. - The company reported a one-time gain of $1.7 million from extinguishment of liabilities in Q2[56]. Operational Strategy - The company aims to reduce workover costs per well from $250,000 to approximately $150,000 through scientific and analytical approaches[16]. - EON's operational strategy includes responsible hedging and leveraging existing wells to minimize capital expenditures[5]. - The company has implemented a chemical acid treatment program to clean wells and recover production, which had previously stabilized and dropped[14]. - The company is rolling out an AI application for operators to improve efficiencies and increase production[15]. Capital Structure - The company has a Reserve Based Loan (RBL) balance of $25.1 million with a 15% interest rate and a five-year amortization schedule[59]. - There are 14.9 million warrants outstanding convertible to 11.2 million Class A shares at an exercise price of $11.50[58]. - The company has $15 million of preferred units at a subsidiary level, which will convert to common stock after two years[58]. Market Context - The Permian Basin contributes 62% of the total oil output in the U.S. and is expected to remain resource-rich until approximately 2040[22]. - EON's first acquisition was a waterflood property in the Permian Basin, with ongoing exploration for further expansion opportunities[18].

Production and Sales - Average daily production for the nine months ended September 30, 2024, was 814 BOE per day, down from 1,022 BOE per day for the year ended December 31, 2023[184] - For the three months ended September 30, 2024, oil and natural gas sales decreased by 18% compared to the same period in 2023, driven by a 6% increase in realized prices and a 17% decrease in production volumes[202] - Average daily production of oil decreased from 855 Bbl in September 2023 to 746 Bbl in September 2024, while natural gas production fell from 1,007 Mcf to 647 Mcf[203] - The company experienced a 24% decrease in oil and natural gas sales for the nine months ended September 30, 2024, driven by a 2% increase in realized prices and a 25% decrease in production volumes[218] Revenue - Total revenues for the three months ended September 30, 2024, were $7,364,346, compared to $5,278,459 for the same period in 2023, representing a 39.5% increase[200] - For the nine months ended September 30, 2024, total revenues were $15,708,240, a decrease of 23% from $20,322,608 in the same period of 2023[218] - Other revenue related to providing water services decreased to $359,270 for the nine months ended September 30, 2024, from $461,435 in the same period of 2023[222] Pricing - Average realized oil price per barrel for the three months ended September 30, 2024, was $68.57, compared to $64.83 for the same period in 2023, reflecting a 5.3% increase[200] - Average realized oil price per barrel for the nine months ended September 30, 2024, was $73.87, compared to $73.03 for the same period in 2023[221] - Average NYMEX oil pricing for the nine months ended September 30, 2024, was $78.50 per barrel, which is 7% lower than the average price of $84.30 per barrel for the same period in 2023[195] - Average NYMEX natural gas pricing for the nine months ended September 30, 2024, was $2.11 per Mcf, a 14% decrease from $2.47 per Mcf for the same period in 2023[196] - The average sales price of natural gas for the three months ended September 30, 2024, was $1.55 per Mcf, down from $2.83 per Mcf for the same period in 2023[200] - Average realized oil price per barrel after reflecting settled derivatives was $77.12 for the three months ended September 30, 2024, compared to $74.23 for the same period in 2023[205] Expenses - Total expenses for the three months ended September 30, 2024, were $5,379,540, compared to $4,660,967 for the same period in 2023, indicating a 15.4% increase[200] - Lease operating expenses decreased to $2,136,732 for the three months ended September 30, 2024, from $2,449,140 in the same period of 2023, although per unit expenses increased by 4.8%[207] - Lease operating expenses decreased to $6,530,431 for the nine months ended September 30, 2024, from $7,354,304 in the same period of 2023, while production expenses per BOE increased by 18% to $28.54[223] - General and administrative expenses rose significantly to $2,235,263 for the three months ended September 30, 2024, compared to $981,751 for the same period in 2023, primarily due to increased costs associated with being a public company[212] - General and administrative expenses surged to $6,868,749 for the nine months ended September 30, 2024, from $3,111,130 in 2023, largely due to increased legal and professional service costs and stock-based compensation of $1,516,933[228] - Interest expense increased significantly to $5,732,747 for the nine months ended September 30, 2024, from $1,429,200 in 2023, driven by the Senior Secured Term Loan and Private Notes Payable[228] Derivative Instruments - The company uses derivative financial instruments to mitigate exposure to commodity price risk associated with oil prices[255] - Derivative financial instruments are recorded at fair value on the consolidated balance sheets as either an asset or a liability[255] - The company does not apply hedge accounting for existing derivative financial instruments, recognizing changes in fair value in the consolidated statements of operations[255] - Realized and unrealized gains and losses from derivative financial instruments are reported as a single line item in revenues[255] - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[255] Debt and Cash Flow - As of September 30, 2024, the company had outstanding debt totaling $24,735,391 under the Senior Secured Term Loan, $15,000,000 under the Seller Promissory Note, and $3,875,750 in private notes payable, with a working capital deficit of $38,801,444[233] - Positive cash flow from operations was $3,346,362 for the nine months ended September 30, 2024, compared to $8,675,037 for the year ended December 31, 2023[234] - Net cash used in investing activities for the nine months ended September 30, 2024, was primarily related to $3,275,667 in development costs for reserves[238] - 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, having received $2,464,688 in cash proceeds from the sale of 1,885,000 shares under this agreement[234] Fair Value Changes - The change in fair value of forward purchase agreements resulted in a loss of $4,534,766 for the nine months ended September 30, 2024, primarily due to a decline in stock price[229] Company Operations - The company operates 100% of its net acreage, which consists of approximately 13,700 gross acres[183] - The average depth of the vertical wells operated by the company is approximately 3,810 feet[183]

Insider Transactions Summary - HNR Acquisition Corp's Director Joseph V Salvucci Sr purchased 10,000 shares at an average price of $1.56, totaling approximately $15,636, following a second-quarter loss of 12 cents per share reported on August 20 [2] - ThredUp Inc's Director Jack R Lazar acquired 20,000 shares at an average price of $0.94, costing around $18,844, after the company reported worse-than-expected second-quarter results and issued FY24 revenue guidance below estimates on August 5 [2] - System1, Inc's 10% owner Cee Holdings Trust bought 25,353 shares at an average price of $1.24, spending about $31,422, after the company posted upbeat quarterly earnings on August 8 [3]

Production and Sales - Average daily production for the six months ended June 30, 2024, was 814 BOE per day, down from 1,022 BOE per day for the year ended December 31, 2023, due to increased well downtime and repairs [165] - For the three months ended June 30, 2024, oil and natural gas sales decreased by 26% to $X, driven by a 34% decrease in production volumes and $83,478 in derivative instrument losses [180] - Average daily production for oil decreased from 1,002 Bbl in June 2023 to 674 Bbl in June 2024, while natural gas production decreased from 1,089 Mcf to 663 Mcf [181] Revenue - Total revenues for the three months ended June 30, 2024, were $5,060,795, a decrease from $7,284,959 for the same period in 2023 [178] - For the six months ended June 30, 2024, total revenues decreased by 44% to $8,343,894, primarily due to a 27% decrease in oil and natural gas sales [195] - Other revenue related to providing water services decreased to $260,818 for the six months ended June 30, 2024, from $317,721 in the same period of 2023 [199] Expenses - Total expenses for the three months ended June 30, 2024, were $5,389,896, compared to $4,139,346 for the same period in 2023 [178] - General and administrative expenses for the three months ended June 30, 2024, were $2,323,662, significantly higher than $857,963 for the same period in 2023 [178] - Lease operating expenses increased by 59% from $18.60 per BOE in June 2023 to $29.50 per BOE in June 2024, totaling $2,094,181 [185] - General and administrative expenses rose significantly to $2,323,662 for the three months ended June 30, 2024, compared to $857,963 in the same period of 2023 [189] - Lease operating expenses decreased to $4,393,699 for the six months ended June 30, 2024, from $4,905,164 in the same period of 2023, while production expenses per BOE increased by 16% to $29.92 [200] - Production taxes, transportation, and processing costs were $837,265 for the six months ended June 30, 2024, down from $1,171,861 in 2023, maintaining a consistent 8% of oil and natural gas sales [201] - Depletion, depreciation, and amortization (DD&A) increased to $998,616 for the six months ended June 30, 2024, compared to $858,992 in 2023, with DD&A per BOE rising from $4.04 to $6.80 [202] - General and administrative expenses surged to $4,633,486 for the six months ended June 30, 2024, from $2,129,379 in 2023, largely due to increased costs associated with being a public company and stock-based compensation of $1,189,968 [203] - Interest expense rose significantly to $3,890,899 for the six months ended June 30, 2024, compared to $874,938 in 2023, driven by the Senior Secured Term Loan and Private Notes Payable [204] Financial Performance - The company recorded a loss of $816,011 due to the conveyance of a 10% overriding royalty interest to Pogo Royalty, which also decreased reserve balance and current net production volumes [176] - The company recorded a loss on derivative contracts of $2,080,725 for the six months ended June 30, 2024, compared to a gain of $763,043 for the same period in 2023 [197] - The company reported a positive cash flow from operations of $2,250,267 for the six months ended June 30, 2024, down from $5,594,971 in the same period of 2023 [209] Debt and Liquidity - As of June 30, 2024, the company had outstanding debt totaling $44,671,000, with a working capital deficit of $32,552,654, raising substantial doubt about its ability to continue as a going concern [207] - The company plans to improve profitability through cost streamlining and maintaining active hedge positions, alongside a three-year Common Stock Purchase Agreement with a maximum funding limit of $150,000,000 [208] Market Conditions - The average NYMEX oil pricing for the six months ended June 30, 2024, was $79.64 per barrel, which is 6% higher than the average price of $74.92 for the same period in 2023 [175] - The average NYMEX natural gas pricing for the six months ended June 30, 2024, was $2.11 per Mcf, which is 13% lower than the average price of $2.41 for the same period in 2023 [175] - The oil price differential to the NYMEX benchmark price during the six months ended June 30, 2024, was $(1.41) per barrel, compared to $(0.76) per barrel for the same period in 2023 [172] Accounting and Reporting - The company has no off-balance sheet arrangements as of June 30, 2024 [212] - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act, thus not required to provide extensive market risk disclosures [227] - New accounting pronouncements are discussed in Note 2 of the consolidated financial statements, indicating potential impacts on financial reporting [227]

Production and Revenue - Average daily production for Q1 2024 was 880 BOE per day, down from 1,022 BOE per day in 2023, reflecting a 14% decrease [165]. - Total revenues for Q1 2024 were $3,283,099, a 58% decrease from $7,759,190 in Q1 2023 [180]. - Oil production decreased from 92 MBbl in Q1 2023 to 69 MBbl in Q1 2024, a 25% decline [182]. - Natural gas production fell from 87 MMcf in Q1 2023 to 67 MMcf in Q1 2024, a 23% decrease [182]. - The average realized price on a BOE basis including settled commodity derivatives was $62.53 in Q1 2024, down from $65.88 in Q1 2023 [180]. Pricing - Average realized oil price per barrel in Q1 2024 was $70.06, down from $73.45 in Q1 2023, representing a 5% decrease [176]. - The average realized oil price per barrel for the three months ended March 31, 2024, was $70.06, down from $73.45 in the same period of 2023, reflecting a decrease of approximately 3.26% [184]. - The average NYMEX oil price for Q1 2024 was $77.56 per barrel, a 2% increase from $76.08 in Q1 2023 [175]. Expenses - Lease operating expenses increased by 6.8% to $3,123,525 for the three months ended March 31, 2024, compared to $2,923,802 for the same period in 2023, with production expenses per BOE rising 42% from $27.50 to $38.96 [186]. - General and administrative expenses rose significantly to $2,309,824 for the three months ended March 31, 2024, compared to $1,271,416 in the same period of 2023, primarily due to increased costs associated with being a public company [190]. - Interest expense surged to $1,860,582 for the three months ended March 31, 2024, compared to $315,092 for the same period in 2023, driven by the Senior Secured Term Loan and Private Notes Payable [191]. Derivative Instruments - The company recorded a loss of $1,997,247 on derivative instruments in Q1 2024, compared to a gain of $417,034 in Q1 2023 [180]. - For the three months ended March 31, 2024, the company recorded a loss on derivative contracts of $1,997,247, compared to a gain of $417,034 for the same period in 2023, indicating a significant decline in performance [183]. - The Company uses derivative financial instruments to mitigate exposure to commodity price risk, with fair value determined using industry-standard models [213]. - Realized and unrealized gains and losses from derivative financial instruments are reported as a component of revenues in the consolidated statements of operations [213]. Financial Position - The company reported a working capital deficit of $24,263,954 as of March 31, 2024, raising substantial doubt about its ability to continue as a going concern within one year [195]. - Net cash provided by operating activities was $1,526,558 for the three months ended March 31, 2024, a decrease from $3,207,922 in the same period of 2023, primarily due to decreased production volumes [197]. - Net cash used in investing activities for the three months ended March 31, 2024, was $997,716, primarily related to development costs for the company's reserves [199]. - As of March 31, 2024, the company had outstanding debt totaling $45,388,029, with $13,098,952 due within one year, including a $5,000,000 estimated excess cash flow payment [195]. Other Information - The company operates 100% of its net acreage, totaling approximately 13,700 gross acres [164]. - The conveyance of a 10% Override royalty interest to Pogo Royalty resulted in a loss of $816,011 [178]. - 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, pending SEC approval [196]. - The fair value of the Forward Purchase Agreement liability was estimated using a Monte-Carlo Simulation, considering future stock price simulations based on Geometric Brownian Motion [212].

Production and Revenue - Average daily production for the year ended December 31, 2023, was 1,022 BOE per day, a decrease of 21% from 1,296 BOE per day in 2022[359] - Total revenues for the year ended December 31, 2023, were $2,975,661, a decrease of 34% from $35,403,940 in 2022[376] - Production of oil for the year ended December 31, 2023, was 349 MBbl, down from 397 MBbl in 2022, representing a decrease of 12%[378] - The average sales price for crude oil was $65.11 per barrel for the Successor period, compared to $73.58 for the Predecessor period[376] - The average NYMEX oil pricing for the year ended December 31, 2023, was $77.64 per barrel, which is 18% lower than the average price of $94.79 per barrel in 2022[370] - The average realized oil price per barrel after reflecting settled derivatives was $69.06 for the year ended December 31, 2023, compared to $78.09 in 2022[370] - The average NYMEX natural gas pricing for the year ended December 31, 2023, was $2.54 per Mcf, which is 60% lower than the average price of $6.42 per Mcf in 2022[371] - Other revenue increased to $571,189 for the year ended December 31, 2023, up from $255,952 in 2022, attributed to a new contract for water services[382] Expenses and Costs - Lease operating expenses rose to $10,146,119 in 2023, compared to $8,418,739 in 2022, with production expenses per BOE increasing by 53% from $17.79 to $27.20[383] - Production taxes, transportation, and processing costs decreased to $2,343,862 in 2023 from $3,484,477 in 2022, maintaining 9% of oil and natural gas sales[385] - Depletion, depreciation, and amortization (DD&A) increased to $1,849,876 in 2023 from $1,613,402 in 2022, with DD&A per BOE rising from $3.41 to $4.53[386] - General and administrative expenses surged to $7,253,384 in 2023 from $2,953,202 in 2022, primarily due to increased legal and professional service costs[388] - Interest expense for the Successor period was $1,043,312, while the Predecessor period saw $1,834,208, reflecting increased borrowing costs[391] Financial Position and Cash Flow - The company reported a liquidity position with $27,680,703 in outstanding debt and a working capital deficit of $13,300,601 as of December 31, 2023[398] - Positive cash flow from operations was $8,675,037 for the year ended December 31, 2023, on a pro forma basis[399] - Net cash provided by investing activities in the Successor period was primarily due to Trust Account withdrawals of $49,362,479, offset by cash paid to sellers of $30,827,804[402] Derivative Contracts and Liabilities - The company recorded a gain on derivative contracts of $392,675 for the year ended December 31, 2023, compared to a loss of $4,793,790 in 2022[380] - The company uses derivative financial instruments to mitigate commodity price risk associated with oil prices, with changes in fair value recognized in the consolidated statements of operations[420] - Realized and unrealized gains and losses from derivative financial instruments are reported as a component of revenues in the consolidated statements of operations[420] - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[420] Asset Retirement Obligations and Legal Liabilities - The company has significant asset retirement obligations primarily related to plugging and abandoning wells, with future restoration and removal costs being difficult to estimate due to changing technologies and regulations[415] - The present value calculation of asset retirement obligations involves numerous assumptions, including credit-adjusted discount rates and timing of settlement, which can impact the property and equipment balance[416] - The company records liabilities for ongoing litigation and environmental remediation, with actual costs potentially varying from estimates due to changes in laws and regulations[417] Accounting and Reporting - The effects of new accounting pronouncements are discussed in the consolidated financial statements[421] - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[422]

Financial Position - As of September 30, 2023, the company had cash of $638,736 and marketable securities in the Trust Account totaling $48,974,196[156]. - As of September 30, 2023, the Company had $638,736 in cash and a working capital deficit of $4,606,920[162]. - The Company has incurred significant costs in pursuit of its financing and acquisition plans, with a total of $3,584,000 in unsecured promissory notes issued to existing investors[174]. Financial Performance - For the three months ended September 30, 2023, the company reported a net loss of $5,358, with operating costs of $658,742 and interest income of $627,932 from marketable securities[152]. - For the nine months ended September 30, 2023, the company had a net loss of $415,775, which included operating costs of $1,927,221 and interest income of $2,417,604 from marketable securities[153]. - The company has not generated any revenues to date and does not expect to do so until after completing a business combination[151]. - The Company’s net loss per share is calculated without considering the effect of warrants, resulting in diluted loss per share being the same as basic loss per share[179]. Capital Raising and Costs - The company raised gross proceeds of $86,250,000 from its Initial Public Offering on February 15, 2022, with an additional $5,050,000 from the sale of private placement Units[154]. - The company incurred offering costs of $4,793,698, which included $1,725,000 in underwriting discounts and $2,587,500 in deferred underwriting fees[155]. - The Company may need to raise additional funds to meet operational expenditures and complete its business combination[165]. Shareholder Actions - A total of 4,115,597 Public Shares were redeemed for an aggregate amount of $43,318,207 from the Trust Account on May 11, 2023[156]. - The Company is obligated to redeem public shares if a Business Combination is not completed by November 15, 2023[163]. Business Strategy and Management - The management team has an average of over 40 years of experience in the energy industry, positioning the company to identify attractive acquisition opportunities[146]. - The Sponsor has extended the Combination period multiple times, with the latest extension to November 15, 2023, involving deposits of $120,000 each time[162]. - The Company has entered into a Common Stock Purchase Agreement with White Lion Capital, allowing for the purchase of up to $150,000,000 in common stock[166]. - The purchase price for shares sold to White Lion will be 96% of the lowest daily volume-weighted average price during a two-day period following the notice date[169]. Administrative Expenses - The Company has paid $169,250 to the Sponsor for administrative support services through September 30, 2023, and owes an additional $50,000[173]. - The Company has not had any off-balance sheet arrangements as of September 30, 2023[172].