EON NRG Ltd (ICRMF) Permitting on First New Well in PRB

Highlights

- The Govt Kaehne #9-29 will be the first well drilled by Eon in the PRB

- High initial production rates in offset wells

- Drilling cost is fully funded

- Additional multiple high impact drilling prospects identified

- Development pipeline of new drilling opportunities

The Govt Kaehne #9-29 is considered to be a low risk conventional well targeting production of light sweet crude oil from the Sandstone reservoirs of the Dakota Formation (Lower Cretaceous Age) at a depth of ~6,200'. The directionally drilled well will penetrate the Muddy Formation as a secondary target at a depth of ~6,000'.

This well will target high quality, oil saturated reservoir, in a structurally high position relative to offset wells. Offset well initial production (IP) rates are prolific (refer map below) and this new well could add significantly to the Company's existing 530 boepd production. The Company holds 100% ownership in all the PRB leases with a 12.5% mineral interest royalty burden delivering an 87.5% net revenue interest to Eon. The estimated dry hole cost of the well is $1.2M. The well location has good access for transportation and is near the town of Gillette, a major oil service center for the PRB.

The Dakota formation is a Lower Cretaceous fluvial point bar sandstone. Reservoir characteristics from published core data in the offset wells show an average porosity of ~21% (15-30% range), average permeability of 99 millidarcy (max 237 MD) and an average net pay thickness of 21'. The well is positioned to penetrate between 30' and 40' of Dakota pay. The Dakota formation has a strong water-drive which results in higher recovery factors versus depletion-drive reservoirs. The water-drive provides pressure support with minimal pressure drop at the wellbore resulting in consistent oil production and wells with higher ultimate recoveries (EUR).

Management is continuing with further engineering and detailed planning for this well, which includes well design, equipment selection, infrastructure planning and costing. A development timeline and further details regarding the well will be provided in due course.

Additional multiple high impact drilling prospects identified

The detailed geological review of part of the 15,000 acres of the company's PRB leases has identified multiple drilling prospects. A further two of these prospects are anticipated to be drilled in 2020. Both wells will target the Minnelusa, a Permian Age eolian dune reservoir capable of high production rates from a conventional vertical well drilled to depths of ~5,800 feet. Further analysis on ranking of wells will determine the drilling order for future drilling programs. The Company plans to begin permitting 2-5 additional wells in 2019 for future drilling in 2020 and beyond.

Glossary:

BOEPD -Barrels of Oil equivalent per day (gas usually converted at 6:1 on energy basis)

BOPD - Barrels of Oil per day

EUR - Economic Ultimate Recovery

MD -Millidarcy

PRB- Powder River Basin Wy USA

All reference to dollars or $ mean US$ unless otherwise stated.

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About EON NRG Ltd:

EON NRG Ltd (ASX:E2E) is an USA onshore focused energy exploration and production company. The Company's growth path is through drilling of high impact oil exploration wells, supported by its 100% owned and operated long life oil and gas production assets and associated cashflow. The company also has a battery minerals division with prospective leases in Nevada which are at the early stages of low cost exploration.

Source:

EON NRG Ltd

Contact:

Australia -
Simon Adams
CFO/Company Secretary
Email: sadams@i-og.net
Phone: +61-8-6144-0590

USA -
John Whisler 
Managing Director
Email: jwhisler@i-og.net
Phone: +1-720-763-3183

Website: www.eonnrg.com 
Twitter: @EonNRG