EON Resources Inc.(EONR) - 2024 Q2 - Quarterly Report

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 [182]. - For the three months ended June 30, 2024, oil and natural gas sales decreased by 26% to $X, driven by a 34$83,478 in derivative instrument losses [200]. - 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 [201]. Revenue and Pricing - 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 [198]. - For the six months ended June 30, 2024, total revenues decreased by 44% to $8,343,894 compared to$15,044,149 for the same period in 2023 [215]. - Average realized oil price per barrel after reflecting settled derivatives and location differentials was $75.81 for the three months ended June 30, 2024, compared to$71.57 for the same period in 2023, representing a 6.3% increase [194]. - The average NYMEX oil pricing for the six months ended June 30, 2024, was $79.64 per barrel, which is 6$74.92 for the same period in 2023 [194]. - 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 [190]. Expenses and Losses - 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, indicating an increase in operational costs [198]. - The company recorded a loss of $816,011 due to the conveyance of a 10$18.60 in June 2023 to $29.50 in June 2024, totaling$2,094,181 [205]. - General and administrative expenses surged to $2,323,662 for the three months ended June 30, 2024, compared to$857,963 in the same period of 2023 [210]. - 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 [224]. Asset and Liability Management - The company reported a net derivative liability of $1,214,436 as of June 30, 2024, compared to a net asset of$467,687 as of December 31, 2023 [218]. - 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 [228]. - 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 [229]. Cash Flow and Investments - 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 [230]. - Net cash used in investing activities for the six months ended June 30, 2024, was primarily related to$1,192,769 in development costs for reserves [231]. Derivative Instruments - The Company utilizes derivative financial instruments to manage commodity price risk related to oil prices, recorded at fair value on the balance sheet [249]. - The Company has opted not to apply hedge accounting for its derivative financial instruments, leading to recognition of fair value changes in the consolidated statements of operations [249]. - Realized and unrealized gains and losses from derivative instruments are reported as a single line item in revenues [249]. - Cash flows from derivative contract settlements are included in operating activities in the consolidated statements of cash flows [249]. Other Considerations - The company continues to assess the impact of the COVID-19 pandemic on operations and may modify its response as the situation evolves [186]. - The company operates 100% of its net acreage across approximately 13,700 gross acres in the Grayburg-Jackson Field in Eddy County, New Mexico [181]. - The effects of new accounting pronouncements are discussed in Note 2 of the consolidated financial statements [250]. - The Company qualifies as a smaller reporting company and is not required to provide certain market risk disclosures [250].