Houston-based EON Resources said this week it reached agreement with Pogo Royalty to eliminate $40 million in EON debt and add to the company’s interests in Grayburg-Jackson oilfield in Permian Basin. EON called the deal “a balance sheet restructuring.” EON will pay a combination of cash and equity to Pogo which will reduce certain liabilities and obligations owed to it by EON. EON will pay $22 million in cash and issue 3 million Class A common stock shares.
EON will acquire a 10 percent overriding royalty interest in Grayburg-Jackson oilfield in northwest shelf in Eddy County, N.M., from Pogo. EON bought assets in Grayburg-Jackson in 2023, including 13,700 contiguous leasehold acres, 342 producing wells and 207 injection wells on 20 federal and 3 state leases.
Hart Energy said the agreement gives EON “an offramp from a constrained balance sheet.” Dante Caravaggio, president and CEO, said Tuesday, “The overhang from our De-SPAC transaction in terms of one-time expenses and a very complicated and burdened balance sheet have restricted our ability to really unlock the underlying potential and value of our assets.”