Financial Data and Key Metrics Changes - The company reported a stabilization in production, achieving approximately 950 barrels of oil per day, with expectations to increase this by 50% by the end of the year [10][15] - Lease operating expenses (LOE) were reduced from over 765,000 in 2024, with a target of around 700,000 per month for 2025 [54][55] - The company aims to cut general and administrative (G&A) expenses significantly in 2025, with a focus on reducing costs related to equity-based compensation and professional fees [31][32] Business Line Data and Key Metrics Changes - The company is focusing on the development of the 7 Rivers waterflood, with plans to add 150 waterflood patterns, which are expected to produce an average of 20 barrels of oil per day per pattern [11][15] - Horizontal drilling potential in the San Andreas formation has been identified, with 50 wells expected to yield 300 to 500 barrels of oil per day [13][30] Market Data and Key Metrics Changes - The company is hedged through 2025 at prices of 70 per barrel or greater, which provides some stability against market fluctuations [25][26] - Oil price volatility and tariffs are highlighted as significant market concerns that could impact the company's performance [6][68] Company Strategy and Development Direction - The company plans to acquire a 10% royalty from the seller for approximately 15 million, which is expected to be the most accretive transaction for the company [8][16] - Future strategies include focusing on workovers, waterflood expansions, and drilling, with a cautious approach to ensure cost-effectiveness [15][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by market volatility but expresses optimism about the company's ability to weather these challenges and achieve profitability in 2026 [62][100] - The company is committed to improving operational efficiency and reducing costs to enhance profitability [17][64] Other Important Information - The company has made significant infrastructure repairs and upgrades, which have contributed to a reduced decline rate in production [16][49] - A focus on safety was emphasized, with no reportable incidents in 2024 [48] Q&A Session Summary Question: What are your largest concerns that might negatively impact your plans? - The largest concern is market volatility, particularly fluctuations in oil prices and tariffs [68][69] Question: What are your plans regarding future use of stock in lieu of cash for accounts payable and other liabilities? - The company plans to use stock sparingly for settling debts and ongoing services [69][70] Question: Are you still working on the workovers wells or is this less of a priority? - Workovers are a top priority and are tied to the development of the 7 Rivers project [77][78] Question: What are you doing to negotiate and benchmark parts, pumps, and other goods necessary for productivity savings? - The company conducts thorough bidding processes to ensure cost-effectiveness in procurement [81][83] Question: If oil prices recover significantly, will you increase production faster? - The company would accelerate workovers and drilling if funding allows, but will proceed cautiously [85][86] Question: Is the 52,800,000 revenue sharing arrangement with Onstream Capital still on track for June 2025 closing? - The lender has indicated that the deal is still on track, but the company remains cautious [90][91] Question: What is your relationship with drilling permits in New Mexico? - The regulatory environment is improving, potentially reducing the time required for drilling permits [96][97]
EON Resources Inc.(EONR) - 2024 Q4 - Earnings Call Transcript