EON Strikes Deal to Launch New Drilling Program Targeting 40M Barrels in New Mexico

EON Resources Inc. (NYSE:EONR) ("EON" or the "Company") is an independent upstream energy company with 20,000 leasehold acres comprising two fields in the Permian Basin in southeast New Mexico. Today, the Company announces it has: (i) received multiple non-binding offers to fund the $41 to $53 million needed for the previously announced Purchase, Sale, Termination and Exchange Agreement with the Seller ("Seller Agreement") that will result in (a) the restructure of the Company's balance sheet by eliminating all current and future obligations to the Seller in a discounted manner, and (b) re-purchase of an overriding royalty interest ("ORRI") equal to ten percent (10%) in the Grayburg-Jackson Field (Press Release on Seller Agreement as amended); and (ii) a farmout to an industry leader with a proven team for the previously announced San Andres horizontal drilling program (Press Release on horizontal drilling program) in the Grayburg-Jackson Field.

Funding offers: Subject to execution of definitive documents, we expect to fund the $41 to $53 million using volumetric funding ("VMA") via the sale of one or more ORRI packages. The schedule is to close and fund in approximately four weeks. The funding is to discharge our $20.5 million settlement with Seller and to retire the Company's senior debt for $18.5 million. As disclosed in previous press releases, we expect the benefits to include:

Completion of our $20.5 million cash settlement with Seller that returns to EON the 10% ORRI; retirement of the $22 million Seller note ($15 million principal plus accrued interest); and return to treasury of the Seller preferred shares with redemption value of $24 million. This would create over $40 million in net value to the Company and its shareholders.

Retirement of its senior debt eliminating a $700,000 per month note payment with a payment substitution of an estimated incremental ORRI payment of $100,000 to $300,000 per month. A positive cash flow impact of $400,000 to $600,000 per month is expected.

Funds raised by the VMA and farm-in proceeds in excess of $41 million would be used to develop 45 in field waterflood patterns out of a remaining 150 waterflood patterns in our Seven Rivers formation.

Farmout with Horizontal Drilling Program: In a separate farmout and drilling commitment transaction, EON has reached an agreement in principle with a private company with a proven team to develop reserves estimated to be up to 40 million barrels in the San Andres formation using a horizontal drilling program. We are targeting commencement of the initial San Andres horizontal drilling in the first quarter of 2026. EON expects that this will add over $100 million in PV-10 value to the Company. Details of this transaction are being withheld until the private company completes due diligence and closing occurs.