Q1 2025 EON Resources Inc Earnings Call
Good day, everyone and welcome to the E. On Resources, Inc. Announces first quarter 2025 earnings call on Thursday May 20, <unk> 2025.
Operator: Good day, everyone, and welcome to the Eon Resources, Inc.
Operator: announces first quarter 2025 earnings call on Thursday, May 22, 2025. At this time, all participants have been placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time, and we'll open the floor for your questions and comments after the presentation. If you're listening on webcast, you can submit a question by clicking on the Ask Question button on the left of your screen. Type your question into the box and hit the Send button to submit your question.
At this time, all participants have been placed on a listen only mode.
If you have any questions or comments during the presentation. You May press star one on your phone to enter the question queue at any time and we will open the floor for your questions and comments after the presentation.
If youre listening on webcast you can submit a question by clicking on the ask a question button on the left of your screen type your question into the box and hit the send button to submit your question.
Michael Porter: It is now my pleasure to turn the floor over to your host, Michael Porter. Sir, the floor is yours. Thank you, Matthew.
Speaker Change: It is now my pleasure to turn the floor over to your host Michael Porter, Sir the floor is yours.
Michael Porter: Thank you Matthew good afternoon, ladies and gentlemen, and welcome to the E on resources first quarter earnings call.
Dante Caravaggio: Good afternoon, ladies and gentlemen, and welcome to the EON Resources First Quarter Earnings Call.
Dante Caravaggio: This call comes under the forward-looking statements rules of the Private Securities Litigation Reform Act of 1995 that involves risks and uncertainties that could cause, affect, result, and to differ materially from what is expected, words such as expect, believe, anticipate, etc. Such forward-looking statements, but in the absence of these words, does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results.
Michael Porter: This call. It comes under the forward looking statements rules of the private Securities Litigation Reform Act of $19 95 that involves risks and uncertainties that could cause affect result to differ materially from what is expected words, such as expect believe anticipate et cetera.
Such forward looking statements, but the absence of these words does not mean that a statement is not forward looking such forward looking statements relate to future events or future results.
Dante Caravaggio: Any results and changes that are material, the company's expectations are disclosed and the company's documents filed from time to time with Edgar and with the Series and Exchange Commission.
Michael Porter: It results in changes that are material the company's expectations are disclosed in the company's documents filed from time to time with the Edgar and with the series and Exchange Commission and without further Ado I'd like to introduce Don take to you don't pay the floor is yours.
Dante Caravaggio: And without further ado, I'd like to introduce Dante to you. Dante, the floor is yours. Thank you, Mike. All of you, thank you for dialing in. It's a warm day in Houston here in the afternoon. I just got my air conditioner fixed, so I'm in a very nice way to be speaking with each of you.
Speaker Change: Thank you, Mike and all of you. Thank you for dialing in and it's a warm day in Houston here in the afternoon I just got my air Conditioner fixed so I'm I'm in a very nice nice way to be speaking with each of you. We just spoke to all of you 30 days ago for our year end financial results.
Dante Caravaggio: We just spoke to all of you 30 days ago for our year-end financial results. So the focus of this call is what's happened in Q1.
Speaker Change: So the focus of this call is what's happened in Q1.
Dante Caravaggio: And I'm going to do this as a good-bad-good sandwich here. So the good, of course, is we've got this wonderful asset. We all believe in it. This management team is committed to making this thing much bigger, much more profitable than it is today. And we've made a lot of progress on the things we mentioned a month ago, advancing the financing to retire all of our senior debt and our seller debt. We'll talk a little bit about that. We've made great advances to find a driller that will bring money and drill. And we put this out on our website, 50 San Andreas horizontal wells.
And I'm going to I'm going to do this as a good bad good sandwich here. So the good of course is we've got this wonderful asset. We we all believe that this management team is committed to making this thing much bigger much more profitable than it is today.
Michael Porter: And we've made a lot of progress on the things we mentioned a month ago advancing the financing to retire all of our senior debt and our seller that we'll talk a little bit about that we've made great advances to find a driller that will bring money and drill and we put this.
Michael Porter: Out on our website 50, San Andres horizontal wells and I was delighted to hear that one of our potential drilling partners at all no. It's not 50, it's 90 and these are big Wells. These are big wells, we're talking about 400 plus barrels a day per well.
Dante Caravaggio: And I was delighted to hear that one of our potential drilling partners said, oh no, it's not 50, it's 90. And these are big wells. These are big wells. We're talking about 400 plus barrels a day per well. So those kind of jump way up to the top of the list of the good.
Michael Porter: So those kind of jumped way up to the top of the list of the good on the bad side in the last quarter oil prices have been down our stock has been down our debt has stayed about the same we continue to pay down our debt, but we still have high debt.
Dante Caravaggio: On the bad side, in the last quarter, oil prices have been down. Our stock has been down. Our debt has stayed about the same. We continue to pay down our debt, but we still have high debt. We don't make money each month, but we've been reducing our costs to cut the amount of loss that we have each month.
Michael Porter: We don't make money each month, but we've been reducing our costs.
Cut the amount of loss that we have each month, that's kind of a good good story out of a bad story and we are short of capital we need to invest more money than we are in the field, but right now our priorities just pay our bills. So a lot of our cash goes to that.
Dante Caravaggio: That's kind of a good story out of a bad story. And we are short of capital. We need to invest more money than we are in the field. But right now, our priority is just pay our bills. So a lot of our cash goes to that.
Dante Caravaggio: So on to the slide that you have is slide one. We're trending in the right direction. If you compare what we did year end last year to what we did in Q1, we lowered our costs, and we lowered our loss per quarter. I'm figuring, and if you cut through all the, I'll say the accounting rules, and get to our cash loss per month, we're close to probably $400,000 right now is the run rate that we need to find, either through increased production or increased cost. I mean, sorry, reduced cost or increased production. There, now I got it right.
Michael Porter: So on to the slide that you have a slide one we're trying to get in the right direction. If you compare what we did you ran last year to what we did in Q1, we lowered our cost and we lowered our loss per quarter.
I'm figuring in and if you cut through all.
Michael Porter: All the I'll say, the accounting rules and get to our cash loss per months, where we're close to probably $400000 right. Now is the run rate that we need to find either through increased production or increased cost.
I mean, sorry reduced cost or increase production there now I got it right and that's that's that's almost twice as good as it was this time last year.
Dante Caravaggio: And that's almost twice as good as it was this time last year. And a lot of these cuts were responding to lower commodity pricing, even though we're hedged, we're hedged at 70 plus percent, meaning we get $70 a barrel, even if today oil prices are 55, or 60, or 62, or whatever they are, we get seven.
And a lot of these cuts were responding to lower commodity pricing, even though we're hedged we're hedged at 70 plus percent, meaning we get $70 a barrel even if today oil prices are 55, or 60 or 62 or whatever they are we get 70.
Michael Porter: The financing to retire our big debt is it worth talking about so that's occupying most of my time and a lot of our team's time.
Dante Caravaggio: The financing to retire our big debt is is worth talking about. So that's occupying most of my time and a lot of our team's time. So we we we met with on stream in Dallas this past week. We're on track to get the financing needed to retire our senior debt. So we've reported that to our bank. And the timing to get that all taken care of is end of June, middle of July. And that's about the best forecast I can give for that. Part of the on stream financing is to also give us nine and a half million to do workovers.
Michael Porter: We met with on stream in Dallas. This past week, we're on track to get the financing needed to retire our senior debt. So we reported that to our bank and the timing to get that all taken care of is ended June middle of July and that's it.
Michael Porter: The best forecast I can give for that part of the on stream financing is to also give us nine of half million to do Workovers and I. Previously mentioned, we have 45 Workovers approved it's a mixed bag of injectors and producers we are a waterflood are producing.
Dante Caravaggio: And I previously mentioned we have 45 workovers approved. It's a mixed bag of injectors and producers. We are a water flood producing field, which means we need producers that are completed in our in our water flood zone, which right now the seven rivers is our dominant zone. At the same time, we need water injectors injecting water in those same zones. So you're going to hear Jesse when he gets on talking about that.
Michael Porter: Field, which means we need producers that are completed and are in our waterflood zone, which right now seven rivers is our dominant zone at the same time, we need water injectors.
Michael Porter: Injecting water in those same zones, so you're going to hear Jesse when he gets all I'm talking about that.
Dante Caravaggio: In parallel with that, we accelerated our search for a drilling partner. And we've got we've got one in hand and we expect additional ones to come in. But the format of these things is a little bit of a leasehold payment, a sharing of production and a sharing of drilling costs. And we are looking for an experienced driller familiar with the formation in our area.
Michael Porter: In parallel with that we accelerated our search for a drilling partner and we've got we've got one LOI in hand, and we expect additional ones to come in but the format of these things is a little bit of a leasehold payment.
Michael Porter: A a sharing of production and a sharing of drilling costs and we are looking for an experienced driller familiar with the formation in our area and I'm delighted to report we've got keen interest in that regard and this is where we're going to make the big move to the upside.
Dante Caravaggio: And I'm delighted to report we've got keen interest in that regard. And this is where we're going to make the big move to the upside.
Dante Caravaggio: I already mentioned that New Mexico State OCD has approved 45 workovers for us.
Michael Porter: I already mentioned the new Mexico's state OCD is approved 45 workovers for us that's a milestone so that gives us a big backlog of work to do once the funding is in place.
Dante Caravaggio: That's a milestone. So that gives us a big backlog of work to do once the funding is in place. I'm also delighted to report that our acid stimulations, a new formulation cooked up by Jesse Allen, our VP of Ops, has doubled and tripled production. Now, we've done this before where we did simple acid, it doubled and tripled production but it was short-lived. So we had to go back to the drawing board to find a better formulation that would hold up.
Michael Porter: Also delighted to report that our asset stimulations of new formulation cooked up by Jessie Allen our VP of ops has doubled and tripled production now we we've done this before where we did simple asset it doubled and tripled production, but it was short lived so we had to go back to the drawing board.
Michael Porter: A better formulation that would hold up so in conclusion I believe all of this hard work that that hasn't put money in the bank for US yet has positioned us for a launch and as we continue to do these workovers and and refine our our formulas for sand Fracs.
Dante Caravaggio: So in conclusion, I believe all this hard work that hasn't put money in the bank for us yet has positioned us for launch. As we continue to do these workovers and refine our formulas for sand fracs, for acid jobs, for drilling, I believe we're in terrific position to take off in Q3 and Q4 of this year.
Michael Porter: For acid jobs for drilling I believe we're in terrific position to take off for in Q3, and Q4 of this year with that for the details I'm going to turn it over first to two Mitch Trotter.
Mitch Trotter: With that, for the details, I'm going to turn it over first to Mitch Trotter. Thanks, Dante. Hello, I'm Mitch Trotter, the CFO. Welcome the newcomers and those that we've talked to in the past. We thank you for attending today. In this call, I'll give you some insights into Q1 results.
Mitch Trotter: Thanks, Dante Hello, a mixture as CFO welcome newcomers and those that we've talked to in the past. We thank you for attending today and this call I'll give you some insights into Q1 results.
Mitch Trotter: The main takeaways from Q1 are two things, cost reductions are starting to materialize, efforts to clean up the balance sheet continue. On the cost reduction side, G&A cost reduction will be discussed on a later slide. The LOE, the leasehold, the field expenses have dropped to $683,000 per month in Q1. This is down from what we were talking about last year where it ranged from $700,000 to $750,000 per month average. Another area of reduction is interest expense has dropped $165,000 for the quarter, and that's due to note conversions in our efforts to clean up our balance.
Michael Porter: The main takeaways from Q1 or two things cost reductions are starting to materialize efforts to clean up the balance sheet continue.
Michael Porter: On the cost reduction said.
Michael Porter: G&A cost reduction will be discussed on later slide.
Michael Porter: The L O. The leasehold the field expenses have dropped to 683000 per month in Q1. This is down from what we were talking about last year, where it range from 700 to 750 per month average.
Michael Porter: Another area of reduction as interest expenses dropped 165000 for the quarter and that's due to note conversions and our efforts to clean up our balance sheet.
Michael Porter: Now when it hit on something else at the income statement you look at it it's all over the place and that's part of what they were saying it's due to.
Mitch Trotter: Now I want to hit on something else.
Mitch Trotter: The income statement, you look at it, it's all over the place. And that's part of what Dante was saying. It's due to non-cash items. don't really reflect the running of the business.
Michael Porter: All eyes on this.
Michael Porter: But don't really reflect the running of the business.
Mitch Trotter: So, in past calls, we've drilled down to all the puts and takes of these items. Those items are properly recorded, but When you strip them away, you can see a little bit more insight into the actual business. And there are two running the business numbers that's hard for you to see, but I like to see it. The first one is income from operations, which I've talked to about. And this is simply the cash driven revenues, less the field related expenses. And this is before G&A and all the other calls. We continue since day one to have consistent income from operations in the 1.8 million range per quarter.
Michael Porter: So in past calls we've drilled down to all the puts and takes of these items.
Michael Porter: Those items are properly recorded.
Michael Porter: But with when we strip them away you can see.
Michael Porter: Little bit more insight into the actual business.
Michael Porter: And there to running the business numbers, but it's hard for you to see but I like to see them.
Michael Porter: The first one is income from operations, which I've talked to about in the past.
Michael Porter: And this is simply the cash.
Michael Porter: Cash driven revenues less the field related expenses and this is before G&A and all the other cost.
Michael Porter: We continue since day, one to have consistent income from operations in the $1.8 million range per quarter. That's the good news and its still there maybe a slight uptick.
Mitch Trotter: That's the good news and it's still there, maybe a slight uptick.
Michael Porter: The second is kind of new to this call and I'm, calling it.
Mitch Trotter: The second is kind of new to this call, and I'm calling it the Ongoing Business Income or Loss. And it is the income from operations less than, or just talked about less than G&A, excluding all the non-cash equity-based type costs. and less interest expense if you remove all the rest of those non-cash items. Q1 was a loss of $1.2 million after the interest.
Michael Porter: Ongoing business income or loss and it is the income from operations less the.
Michael Porter: We've just talked about less the G&A, excluding all the noncash equity based type calls.
Michael Porter: And less of course interest expense.
Michael Porter: And if you remove if you remove all of the rest of those noncash items.
Michael Porter: Q1 was a loss of 1.2 million after the interest expense.
Mitch Trotter: last year, the loss was running more like 1.4, 1.5 million per quarter, average across the year. This is a 300k approvement, and that's driven by the cost reductions, and you'll hear a little bit more about that in the G&A.
Michael Porter: Last year the.
Michael Porter: The loss was running more like 1.4 $1.5 million per quarter average cross a year. This is a 300 K approval.
Michael Porter: And that's driven by cost reductions and you'll hear a little bit more about that in the G. Nice so let's get on with it and let's go to the revenue Slide. Please next slide.
Mitch Trotter: So let's get on with it, and let's go to the revenue slide, please. Next slide. As you can see, production remains stable for this quarter again. There was an uptick in oil revenue due to fluctuations in the market price oil.
Michael Porter: And as you can see production remained stable for this quarter again, there was an uptick in oil revenue do the fluctuations in the market price of oil.
Mitch Trotter: Dante noted. We know market price for the last couple of months has been up and down and all around. Good news is 70% of our oil is hedged at $70 a barrel. This mitigates these market fluctuations. And we've got our head position at this level all the way through the end of 2025.
Michael Porter: They noted.
Michael Porter: We know market price for the last couple of months, it's been up and down in all around good news is set.
Michael Porter: 70% of our oil is hedged at $70 a barrel.
Michael Porter: <unk> mitigates these market fluctuations and we've got their head positional.
Michael Porter: At this level all the way through the end of 2025.
Michael Porter: Last item I wanted to note on the revenue slide though is.
Mitch Trotter: Last item I want to do note on the revenue slide, though, is The gas revenues are up 50k for the quarter, and that's due to the higher price of gas.
Michael Porter: The gas revenues are up if it PK for the quarter and that's due to the higher price of gas.
Michael Porter: So let's go to the next slide please.
Mitch Trotter: So let's go to the next slide. I showed this slide on production impacts last call. I was not planning to include it, but the slide did stimulate a lot of good discussion in the Q&A. So, I've left the slide in the deck, which you all, I'm sure, got from the website. And it's for reference to help you understand some of the business better.
Michael Porter: Sure.
Michael Porter: And I showed this slide on production impacts last call.
Michael Porter: I was not in planning to include it.
Michael Porter: But the slide that stimulate a lot of good discussion in the Q&A. So I've left of slide in the deck, which shows all I'm sure got from the website and.
Michael Porter: For reference to help you understand some of the business better.
Mitch Trotter: And if needed, we're going to talk, if needed in the Q&A, I may refer back to it, but I'm not going to talk about it at this point in time. What I want to do is go to the next slide.
Michael Porter: And if needed we're gonna talk.
Michael Porter: If needed in the Q&A I may refer back to it but I'm not going to talk about it at this point in time, we don't want to do is go to like G&A Slide next slide please.
Mitch Trotter: Next slide, please. Now, we have a plan, we've stated, to reduce G&A costs across the entire year, and some reductions have started in Q1. First, the salaries and fees decreased by $225,000 in Q1, over last year, or this is approximately a million-dollar-a-year run rate for the year. Second area, Q1, Professional Fees, Legal, Audit, Consulting, they're slightly down from last year's average per quarter. Now a significant portion of these stem from acquisition filings, complicated instruments, balance sheets, settlement agreements, you know, trailing legal matters.
Michael Porter: Yeah.
Michael Porter: Now we have a plan, we stated to reduce G&A cost across the entire year and some reductions that started in Q1.
Michael Porter: First the salaries and fees decreased by 225000 in Q1.
Michael Porter: Over the last year or this is approximately a million dollar a year run rate for the year.
Michael Porter: Second area Q1 for professional fees legal audit consulting, they're slightly down from last year's average per quarter.
Michael Porter: A significant portion of these stem from acquisition.
Michael Porter: Acquisition filings complicated instruments balance sheets settlement agreements you know trailing legal matters.
Mitch Trotter: We do expect these to drop off dramatically after Q2. Third area cost reduction is the insurance costs are down 25, excuse me, 75,000 per quarter. And that's just due to renewal rates that we've negotiated.
Michael Porter: We do expect these to drop off dramatically after Q2.
Michael Porter: Third area of cost reduction as the insurance costs are down 25, excuse me 75000 per quarter and that's just due to renewal rates that we've negotiated.
Michael Porter: So let's move on to the balance sheet. Please next slide.
Mitch Trotter: So let's move on to the balance sheet, please. Next slide. Not going to spend a whole lot of time here, but I do want to mention the company has made and is continuing to make improvements to the balance sheet. reported before, the FPA liability went away in Q4 of last year.
Michael Porter: Not going to spend a whole lot of time here, but I do want to mention the company has made and is continuing to make improvements to the balance sheet.
Michael Porter: So reported before the F. P. A liability went away in Q4.
Michael Porter: Of last year.
Mitch Trotter: Now we'll discuss some other Q1 improvements, but I'm going to do that on the equity slide.
Michael Porter: Now we will discuss some other Q1 improvements, but I'm going to do that all the equity slot. So let's flip to the debt structure slide.
Mitch Trotter: So let's flip to the debt structure slide. Now, there's really nothing new here, so it's there for your reference.
Michael Porter: Yeah, there's really nothing new here.
Michael Porter: So it's there for your reference I don't want to go ahead and move forward to the equity slide please.
Mitch Trotter: I want to go ahead and move forward to the equity slide, please. Okay, now there are a couple of changes in equity as we clean up the balance sheet. First, there is no more Class B common stock. It's all Class A common stock, so that messiness is gone. The number of warrants outstanding, they have dropped by a couple of million with our exchanges to long-term convertible notes. Correspondingly, the warrant liability is also dropped by $1.6 million from the balance sheet.
Speaker Change: Okay. Now there are a couple of changes in equity as we clean up the balance sheet first there is no more class b common stock. It's all class a common stock so that and that CNS is gone.
Michael Porter: The number of warrants outstanding they have dropped a couple of million with our exchanges to long term convertible notes correspondingly. The warrant liability has also dropped by $1.6 million from the balance sheet.
Michael Porter: Yeah.
Mitch Trotter: Now, next slide, please. Now, just like the. production impact slide. I showed it on the last call. I wasn't going to include it. But it did stimulate a lot of good discussion. So people wanted to review it. So I've left it in there for help to help you understand our business better.
Michael Porter: Now next slide please.
Michael Porter: Yeah, just like the <unk>.
Michael Porter: Production impacts slide I showed on the last call I wasn't going to include it but it did stimulate a lot of good discussions so people wanted to review it.
Michael Porter: So I've left it in there for help to help you understand our business better.
Mitch Trotter: Again, in Q&A, I can may refer back to it, but it's there in the deck for you to look at.
Michael Porter: And in Q&A I can may refer back to it but it's there in the deck for you to look at.
Mitch Trotter: So for the financial section starting to wrap it up, I want to repeat, we have a key focus on reducing costs, which have started to materialize, and efforts to clean up the balance sheet continues and will continue in the future.
Michael Porter: So for the financial section starting to wrap it up on where peak we have a key focus on reducing costs, which has started to materialize and efforts to clean up the balance sheet continues and will continue in the future.
Jesse Allen: So now we'll move it on to Jesse to review operations. Thank you. Yes, thank you, Mitch.
Jesse: So now I want to move a move it onto Jesse for to review operations. Thank you.
Michael Porter: Yeah.
Jesse: Yes, Thank you Mitch.
Jesse Allen: I'm Jesse Allen, the VP of Operations, and today I will briefly discuss some of the highlights of 2024. Some of them are very important and just want to jog everybody's memory on those. But more importantly, I'll talk about what we're doing currently in Q1 of 2025 to increase our production.
Speaker Change: Jesse Alan the VP of operations and today I will briefly discuss some of the highlights of 2024.
Speaker Change: Some of them are very important and just want to read.
Speaker Change: Jog everybody's memory on those but more importantly, I'll talk about a what we're doing currently in Q1 of 2025 to increase our production.
Jesse Allen: So, first though, I want to start with safety. For 2024 and into our first quarter, 2025, we've had no reportable incidents. So our field operating personnel are doing an excellent job of their daily work routine, noting any possible near misses, et cetera, and so on. So they're doing a great job there.
Speaker Change: So first though I want to start with safety.
Speaker Change: For 'twenty 'twenty, four and into our first quarter 2025, we've had no reportable incidents. So our field operating personnel are doing an excellent job of.
Speaker Change: Their daily work routine, noting any possible near misses et cetera, and so on and so they're doing a great job there.
Jesse Allen: So for 2024, when we took over the operations of the Grayburg-Jackson Field, the daily production was in a free fall. So we had to stabilize that production, and we were able to do that with a well-serviced work-over rig that we ran throughout the year. And we were able to stabilize production in the 9-25. barrel oil per day.
Speaker Change: So for 2024.
Speaker Change: When we took over the.
Speaker Change: Operations of the greater objection field. The daily production was in a free fall. So we had to stabilize that production and we were able to do that with a well service workover rig that we ran throughout the year and we were able to stabilize production in the 925 to 950 barrels of oil per day range, but.
Jesse Allen: But. And so that was a good thing. And we continue those efforts, of course. And then in order to stabilize that production, we did several upgrades throughout the field, flowline repairs, electrical repairs, purchased some key equipment that helped us reduce LOE.
Speaker Change:
Speaker Change: And so that was a good thing and and we continue those efforts of course and then in in order to stabilize that production. We did several upgrades throughout the field flow line repairs electrical repairs purchased some key equipment that helped us reduce L O E and so that's a good segue.
Jesse Allen: And so that's a good segue into the LOE, which both Mitch and Dante have mentioned. At the beginning of 2024, we were in the $780,000 range, $750,000 to $780,000. Slowly, we were able to reduce it to $700,000 per month for our lease operating expense. And currently, here in Quarter 1, we're at $683,000.
Mitch Trotter: <unk> way into the L O U which are both Mitch and Anne downtown mentioned.
Speaker Change: At the beginning of 'twenty 'twenty four we were in the $780000 range $7 50 to 780 slowly are we were able to reduce it to $700000 per month for our lease operating expense currently given quarter, one we're at $683000 per month.
Speaker Change: So let's move on to the more important stuff. So next slide please.
Jesse Allen: So next slide, please. What are we going to do to increase production? And we've already initiated several programs and concentrating our effort on doing that. We did several sand frac treatments using low-temperature resin-coated sand, which will help keep the sand in place and not cause us operational problems, having to pull down whole pumps, et cetera. So that's been successful. And the first couple wells, one came in a little over 20 barrels all a day, and the other one we're still in the process of testing. In addition, we've initiated an acid treatment program, new formulation, a little bit larger jobs to sustain the production.
Speaker Change: Yes.
Speaker Change: What are we going to do to increase production.
Speaker Change: And we've already initiated several programs and and concentrating our effort I'm doing that we did several sanford.
Speaker Change: San Frac treatments, using low temperature resin coated sand, which will help keep the sand in place and not caused this operational problems having to pull downhole pumps et cetera. So that's been successful and are the first couple of wells one came in a little over 20 barrels all the day and the other one we're still in the process of testing.
Speaker Change: In addition, we've initiated the acid treatment program.
Speaker Change: New formulation little bit larger jobs are to sustain the production and as Dante mentioned.
Jesse Allen: And as Dante mentioned, we basically doubled and tripled production on the first two wells we did. And as a matter of fact, we are doing two additional jobs today.
Speaker Change: We basically doubled and tripled production on the first two wells, we did and as a matter of fact, we are doing two additional jobs today and so there'll be some news. The next time that I'm on on those wells that we acidize.
Jesse Allen: And so there'll be some news the next time that I'm on on those wells that we acidized. In addition, we always have a continuing effort of bringing down producing wells and down injection wells back online. And so that effort continues.
Speaker Change: In addition, we always have a continuing effort of bringing down producing wells and down injection wells back online and so that effort continues.
Jesse Allen: We're contemplating adding another rig to accelerate that program.
Speaker Change: We're contemplating.
Speaker Change: Contemplating adding another rig to accelerate that program and then finally, the really big highlight is gonna be our horizontal drilling program in the scent Andrus as Dante said, our own analysis, which of course is on our website. We indicated we had a 50 locations, but as a.
Jesse Allen: And then finally, the really big highlight is going to be our Horizontal Drilling Program in the St. Andrews. As Dante said, our own analysis, which, of course, is on our website, we indicated we had 50 locations. But, as a... As one of our partners who looked over the data, they feel like it's more like 90. And that's mainly because there's additional intervals within the San Andreas that have a potential. So there's just different intervals within that San Andreas that we're going to be able to exploit, thus the reason for increased potential well count of horizontal wells.
Speaker Change: That's one of our partners, who looked over the data they feel like it's more like 90, and that's mainly because of there's additional intervals within the San Andros that has a potential. So there's just different intervals within that San Angeles that we're going to be able to exploit thus the reason for.
Speaker Change: Increased potential well count of horizontal wells.
Dante Caravaggio: So, with that, I'll turn it back over to you, Dante, for the wrap-up. Dante, are you there? I'm here.
Speaker Change: So with that I'll turn it back over to you to Dante for the wrap up.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: I'm sorry are you there.
Speaker Change: All lines I'm here I was trying to I apologize I was on sorry.
Dante Caravaggio: I was talking to you. I apologize. I was on. Sorry about that.
Speaker Change: Sorry about that.
Dante Caravaggio: Guys, I'm giving our walkaway points, our takeaway points from this quarter. We're positioned for big, big time debt reduction. You know, this includes the RBL, and it's standing close to $20 million, and also includes a seller note that stands close to $18, $19 million. We're going to retire both those in the next quarter, along with the preferred shares that are also standing in our capital stack. All three of those are going to go away. We're going to have Workover Madness next quarter because we've already got a solid backlog of approved workovers. This is going to increase our water injection, going to increase our oil production.
Speaker Change: I'm, given our walk away point, so our takeaway points from this quarter.
Speaker Change: We're positioned for big Big time debt reduction.
Speaker Change: This includes the the R B L.
Speaker Change: Standing close to 20 million and also includes a seller note that stands close to 18 19 million, we're going to retire both of those in the next quarter along with the preferred shares there. There's also standing in our capital stack all three of those we're going to go away.
Speaker Change: We're gonna have Workover Badness next next quarter, because we've already got a solid backlog of approved Workovers. This is going to increase our water injection going to increase our oil production.
Dante Caravaggio: The last quarter of this year, we're gonna have You know, I'm just going to say, we're going to be going great guns in drilling preparation, not drilling, but drilling preparation.
Speaker Change: The last quarter of this year, we're gonna have.
Speaker Change: No I'm just going to say, we're gonna be gone, great gods and drilling preparation not drilling but drilling preparation Q1 of next year and 26, we should be drilling up to up to six wells three to six wells. We're also gonna be doing some low cost acquisitions, which we can't help RC.
Dante Caravaggio: Q1 of next year, in 26, we should be drilling up to six wells, three to six wells.
Dante Caravaggio: We're also going to be doing some low-cost acquisitions, which we can't help ourselves because of these low oil prices.
Speaker Change: <unk>.
Speaker Change: Are these low oil prices frankly, our phone is ringing so even though our stock is quite low we can do so I'm very very low cost acquisitions, it will be accretive to our stock and where we're in the midst of looking at too.
Dante Caravaggio: Frankly, our phone is ringing. So even though our stock is quite low, we can do some very, very low-cost acquisitions that will be accretive to our stock, and we're in the midst of looking at two.
Dante Caravaggio: So when will this stock ever go up? You're gonna ask. And I've got my family and friends in the stock and they're asking me, how low can it go?
Speaker Change: So what will the stock ever go up Youre going to ask I've got my family and friends in the stock and they're asking me how low can it go and I told them as of today I can't go any lower than 37 cents.
Dante Caravaggio: And I told them as of today, it can't go any lower than 37 cents. So, but I believe that the stock is really attractive. I'm in it at a much higher price. I'm more optimistic now than ever. And with the upside that I just mentioned, I just can't help feeling very optimistic on our future.
Speaker Change: But I believe that the stock is is really attractive I'm in it at a much higher price are more optimistic now than ever and are with the upside that I. Just mentioned I just can't help feeling very optimistic on our future with that I'm going to turn it back over to Mike.
Michael Porter: With that, I'm gonna turn it back over to Mike Porter and our Q&A, please. Matt, would you give them the instructions, please?
Mike: Water and our our Q&A. Please.
Speaker Change: Matt would you give them the instructions please.
Matt: Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.
Operator: Certainly, everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. We do ask that participants please ask one question and one follow-up, then re-enter the queue. Once again, if you have any questions or comments, please press star one on your phone.
Speaker Change: We do ask that while posing your question. Please pick up your handset if you're listening on speaker phone to provide optimum sound quality.
Speaker Change: We do ask that participants. Please ask one question and one follow up then reenter the queue.
Speaker Change: Once again, if you have any questions or comments. Please press star one on your phone.
Operator: Please hold Wallypole for questions.
Speaker Change: Please hold while we poll for questions.
Speaker Change: Thank you once again, everyone. If you have any questions or comments. Please press star then one on your phone please hold while it over for questions.
Operator: Thank you.
Operator: Once again, everyone, if you have any questions or comments, please press star, then one on your phone. Please hold lollipop for questions.
Speaker Change: Thank you that concludes our dial and Q&A for those listening on the webcast you can submit a question at this time by clicking on the ask a question button on the left of your screen type your question into the box and hit the send button to submit your question.
Operator: Thank you. That concludes our dial-in Q&A.
Michael Porter: For those listening on the webcast, you can submit a question at this time by clicking on the Ask Question button on the left of your screen. Type your question into the box and hit the Send button to submit your question.
Michael Porter: I will now turn the call over to Michael Porter for remaining questions. Thank you, Matt.
Speaker Change: I'll now turn the call over to Michael Porter for remaining questions.
Speaker Change: Thank you Matt dice up the first question that came over the Internet just can you give us some color on your gas operations and what you think the future and gas will be for the company.
Dante Caravaggio: Guys, the first question that came over the Internet is, can you give us some color on your gas operations and what you think the future in gas will be for the company? Yeah, let me let me feel that one guys, if I could. So first off, gas prices have behaved much better than oil prices and our gas revenue is up. So we're happy about that and it's a very good question because we're looking at gas, we're looking at gas opportunities and I'll just say we're looking at gas opportunities in the US and we're also looking at unconventional gas.
Speaker Change: Yeah, Let me, let me field that one guys if I could.
Speaker Change: So our first off gas prices have behaved much better than oil prices in our gas revenue is up so we're happy about that and it's a it's a very good question because we're looking at gas, we're looking at gas opportunities and Oh, I'll just I'll just say.
Speaker Change: We're looking at gas opportunities in the U S and we're also looking at unconventional gas.
Dante Caravaggio: We like the specialty gas where the price of gas is much higher than I'll say Permian gas. So just as a for example, helium costs closer to four or $500 per MCF. If we can pick up a property or a plant that generates a helium revenue line, we're then tapping into deep, I'll call it deep value for our company. The gas we get and sell to Kinetics out there, that's our midstream provider that bought out Durango, we don't get a whole lot for that gas.
Speaker Change: We like the specialty gas, where the price of gas is much higher than I'll say Permian gas. So you know just as a for example, helium costs are closer to four or $500 per Mcf, if we can pick up a property or plan.
Speaker Change: That that generates a helium revenue line. We're then tapping into deep I'll call. It deep value for our company the gas, we get and sell two kinetics out there that's our midstream provider that bought out Durango, we don't get a whole lot for them.
Speaker Change: That gas so if we can monetize that gas that we produce which is about 900 Mcf per day by either doing a datacenter bitcoin mining or one of those things and we were we're investigating it now, but we don't know how to do it yet so we're looking at help from others, we'd be very excited.
Dante Caravaggio: So if we can monetize that gas that we produce, which is about 900 MCF per day, by either doing a data center, Bitcoin mining or one of those things and we're investigating it now but we don't know how to do it yet. So we're looking at help from others. We'd be very excited to do that. But at the moment, we are enjoying a little more income because the gas prices for just, I'll say methane loaded with C2, C3, C4 and C5 is on the upswing, just the opposite of oil and gas. Let me ask, poll my team, if they have anything they wanna add to that.
Speaker Change: To do that but at the moment, we are enjoying a little more income.
Speaker Change: Does the gas prices for Jess I'll say methane loaded with a C to C. Three D C. Four and C. Five is is on the upswing just the opposite of oil and gas let me ask Paul My team if they have anything they want to add to that.
Dante Caravaggio: Jesse or Mitch? No, I'm fine. Well, let's see, I'm fine in that regard, yeah. Okay, we'll go back to you then, Mike. Okay.
Speaker Change: Jesse.
Speaker Change: Yet announce on well, let's say, yeah, I'm fine in that regard yeah.
Speaker Change: Okay. We'll go back to you then bye okay.
Dante Caravaggio: The next question is, how was your relationship with Chevron? I'll feel that one too. All of us when we first bought this property, wanted to make sure we had a good relationship with Durango and Chevron. They're, they're really our client because they buy, they buy the gas now kinetics and, and Mitch and I are not sorry, Mitch and I and Jesse all have had chats with Chevron as well as with with Kinetics. And I'd like to say our relationship is excellent. In the case of Chevron, they've said if you quadruple your oil production, we'll take it off.
Speaker Change: The next question is how is your relationship with Chevron.
Mitch Trotter: I'll field that one to all of US when we first bought this property wanted to make sure. We had a good relationship with Durango and Chevron there, they're really our client because they buy they buy the gas now kinetics, and and Mitch and I am sorry, Mitch and I.
Speaker Change: And Jesse all have had chats with chevron as well as with.
Mitch Trotter: With kinetics and I liked to say our relationship is excellent in the case of Chevron they've said if U quadruple your oil production will take it all so at the moment, we don't see any issues there.
Dante Caravaggio: So at the moment, we don't see any issues there. In the case of Kinetics, the Permian is a wash in gas. So we have to be very careful and we're curtailed about 20% of our gas production in a rolling curtailment because the midstream guys have to catch up to what the producers are producing. So they have a big gas plant due to come online. I think The end of this year, Jesse, you're more familiar with that. When would their next trains come on that would relieve some of this? should be the end of July is what they've indicated, but I'm taking that with a grain of salt because they keep pushing it.
Mitch Trotter: In the case of kinetics, the Permian is a wash and gas. So we have to be very careful in where were curtailed.
Mitch Trotter: 20% of our gas production.
Mitch Trotter: Rowling curtailment, because the midstream guys have to catch up to what the producers are producing so they have a big gas plants due to come on line I think.
Mitch Trotter: At the end of this year, Jesse you're more familiar with that what when where their next trains come off that would relieve some of this.
Mitch Trotter: Should be the end of July is what they've indicated but.
Mitch Trotter: I've taken that with a grain of salt because they keep pushing it but hopefully the end of July.
Dante Caravaggio: But hopefully the end of July. Yeah, the date slip. Okay, that's the best answer we can give you there.
Speaker Change: Yeah the date slip.
Speaker Change: That's the best answer we can give you there back to you Mike.
Dante Caravaggio: Back to you, Mike. Okay, the next question, hang on, it's coming over right now.
Speaker Change: Okay. Then the next question hanging on it's coming over right now.
Speaker Change: Would the entire deal with Oncor will it close in June or can you do it in pieces.
Dante Caravaggio: Would the entire deal with Encore, will it close in June or can you do it in PC? It looks like it's going to be an all, all at once. And the latest I've got is, we were trying to hold a June 23 date. And it's, it's, it's complicated, because we're involving the bank, the seller, a very large investor, that is the backer for on stream.
Speaker Change: It looks like it's gonna be at all all at once and the latest Ive got is we were trying to hold a June.
Speaker Change: 23rd date, and it's it's it's complicated because we're involving the bay the seller.
Speaker Change: A a very large investor that has the back or for on stream and I believe to be say for this audience I I'd say well, we'll get it done by the end of July although we're pushing like Hell to get it done in June that's the best I can guidance I can give.
Dante Caravaggio: And I believe to be safe for this audience, I'd say, we'll, we'll, we'll get it done by the end of July. Although we're pushing like hell to get it done in June. That's the best I can guidance I can give. It's not that the funding's not there. The funding is there. The issue is getting all the paperwork together to everyone's satisfaction. It's a complicated transaction.
Speaker Change: It's not that the funding is not there. The funding is there the issue is getting all the paperwork together to everyone's satisfaction, it's a complicated transaction.
Speaker Change: Thank you niche. This question is for you can you explain to me exactly how the French.
Mitch Trotter: Thank you.
Mitch Trotter: Mitch, this question is for you. Can you explain to me exactly how the hedging program operates? And do you make any money off of? Sure. Well, first off, the hedging program that we have is our hedges are SWOT. where we basically have gone in and our range is a little over $70. Actually, there are three or four hedges, blocks that are between $70 and 10 cents and $70 and 50 cents, where would ever in their 15,000 barrels per month hedged, which is 70% of our production. And no matter what the oil price sells, market is if it's at $60, we collect the $10 at the end of the month, actually the 25th.
Speaker Change: French hedging program operates and do you make any money off of it.
Speaker Change: Sure.
Speaker Change: Well first off the hedging program that we have.
Speaker Change: As our hedges or swaps, where we basically trip com and in our range is a little over $70 actually there are three or four hedges are blocks that are between $70.10 and $70.50 where would ever.
Speaker Change: And their 15000.
Speaker Change: Barrels per month hedged, which is 70% of our production.
Speaker Change: And no matter, what the oil price self or market as if it's at $60.
Speaker Change: We collect the $10 at the end of the month actually the 25th of the month.
Mitch Trotter: And if it's 80, we got to give the $10 back and the rest of it, the other 30% new production floats with Mark. So it's pretty simple. We don't have collars and all that. Now we may in the future, but a little bit more complicated. We actually had that at the beginning of last year, collars and stuff, but we're not paying for hedges just to get it to one number. We're locking in hedge price. We're not in the business of a hedge fund. We de-risk, mitigate our risk by doing that. And it's set up to cover our basic.
Speaker Change: And if it's 80, we gotta gave the $10 back and the rest of it the other 30% new production floats with market.
Speaker Change: So it's a pretty simple we don't have collars and all that and then we may in the future, but a little bit more complicated we actually had that at the beginning of last year colors and stuff, but we're not paying for hedges just to get it to one number where we're locking in hedge price we're not in the business.
Speaker Change: Hedge, but we we are we de risk mitigate our risk by doing that and it's set up to cover our basic.
Mitch Trotter: Loan Needs and Basic Operating that answer the question.
Speaker Change: Loan needs and basic operating expenses so.
Mike: I hope that answered the question back to you Mike.
Michael Porter: Back to you, Mike. Thank you, Dante.
Mike: Thank you Dante are the question is can you give us your thoughts on the oil and gas business in 'twenty five and how do you feel about what's been going on worldwide.
Dante Caravaggio: The question is, can you give us your thoughts on the oil and gas business in 25? And how do you feel about what's been going on worldwide? Wow, yeah, the There's a lot of opinions on that.
Mike: Wow Yeah.
Mike: The.
Mike: There's there's a lot of opinions on that yeah, you know for us the the mines. They put together the New York strip oil pricing is probably the best collection of mines, but by my own observation that I've been in this field a long time since our since I got out of school and 79.
Dante Caravaggio: You know, for us, the mines that put together the New York Strip oil pricing is probably the best collection of mines, but my own observation, and I've been in this field a long time since I got out of school in 79, The Permian, I do believe, has peaked. You're seeing the rig count falling off at these oil prices. We have an unusually good Permian rock. I don't believe that we're going to be phased, even if oil prices are in the low 60s or high 50s. Certainly, if we're in the low 50s, that'll... re-adjust our focus to be just workovers, which are lower capital costs and faster payouts.
Mike: The.
Mike: The Permian I I do believe has peaked out you're seeing the rig count falling off at these oil prices, we have an unusually good Permian rock I don't believe that we're gonna be phased even if oil prices are in the low sixty's or high fifty's.
Mike: Certainly if we're in the low fifties battle.
Mike: Readjust, our focus to be just workovers, which are lower capital cost and faster payouts, but I think the world.
Dante Caravaggio: But I think the world... can't can't produce 100 million barrels a day infinitely. And, and the world continues to increase in demand. So my my own belief is we're going to trade in this. It's pretty easy to say 60 to kind of 80 range, and we're at the bottom of that range. And if we go below 60, it won't be for long, because you'll see the drilling rigs all dry up. And right now, more productions coming out of the Permian than any other oil field. So if the Permian continues to drop, and every new well drilled, almost everywhere in the world, it's almost like this, other than, oh, there's one field off of Northern South America that's doing quite well.
Mike:
Mike: It can't produce 100 million barrels a day incidentally and and the world continues to increase and demand. So my my own belief is we're going to trade in this.
Mike: It's pretty easy to say 60 to 80 range and we're at the bottom of that range and if we go below 60, it won't be for long because you'll see the drilling rigs all dry up and right now more production coming out of the Permian than any other oilfield. So.
Mike: If if the Permian continues to drop.
Mike: And in every new well drilled almost everywhere in the world. It's almost like this other than Oh, there's one field.
Mike: Off of.
Mike: Northern South America, that's doing quite well, but other than that every new well does worse than the previous well. So if you drill a new Permian well it does worse than than the older. Good Permian wells, a decade ago or 20 years ago. So we're we're going to fight that we're going to fight that and drill.
Dante Caravaggio: But other than that, every new well does worse than the previous well. So if we drill a new Permian well, it does worse than the older good Permian wells a decade ago or 20 years ago. So we're gonna fight that. We're gonna fight that and drill better wells. We're gonna have better work overs. And we're gonna enjoy, we believe, $70 a barrel. And as oil goes up, and it will go over 70, we'll look to hedge the 26 production at 70 again. So I think 70 is a fair price. It's gonna go up and down from there.
Mike: Wells, we're going to have better Workovers and we're gonna enjoy we believe 70 barrel $70, a barrel and as oil goes up and it will go over 70, we'll look to hedge our the 26 production at 70 again. So I think 70 is a fair price it is.
Speaker Change: Gotta go up and down from there, but I think generally it's it's got a it's going to level out around 70 and on bucking the trend with that statement, because New York strip pricing is forecasting low sixties.
Dante Caravaggio: But I think generally it's gonna level out around 70.
Dante Caravaggio: And I'm bucking the trend with that statement because New York strip pricing is forecasting low 60s. And I'm just basing that on my own insight on people can't easily just turn the spigots up to make oil come out. It just doesn't work like that. And that includes Saudi Arabia. Their largest oil field, the South Kavar field that I worked on is a water flood. And it's a carbonate water flood.
Mike: Just basing that on my own insight on you know.
Mike: People can easily just turned the spigot shop to make oil come out it just doesn't work like that.
Mike: And that includes Saudi Arabia, the largest oil field the south Guevara field that I worked on is a waterflood and it's a carbonate waterflood died I would trade that carbonate for our carbonate, but it. It. It just reflects that we're dealing with a finite resource and that finite resources Gotta eventually run out.
Dante Caravaggio: Now I would trade that carbonate for our carbonate, but it just reflects that we're dealing with a finite resource. And that finite resource is gonna eventually run out.
Dante Caravaggio: So I'll turn it back over to you. Thank you.
Mike: So I'll turn it back over to you Mike.
Mike: Thank you Jessy next to the last question do you see an opportunity for you guys on as far as the rig count going down where you'll be able to get rigs at a cheaper price and would you buy a rig rather than rent it or lease it.
Jesse Allen: Jesse, next to the last question. Do you see an opportunity for you guys on as far as the rig count going down where you'll be able to get rigs at a cheaper price? And would you buy a rig rather than rent it or lease it? I assume they're talking about a drilling rig, and so, yeah. Now, typically, as an operating company, we don't want to have that additional liability of a drilling rig. But right now, it is a good market to go out and get a drilling rig at a fair market value or a fair market daily rig rate.
Speaker Change: I assume they're talking about a drilling rig.
Mike: And so.
Mike: So yeah.
Mike: Now typically.
Mike: As an operating company, we we don't want to have that additional liability of a drilling rig.
Mike: So we will but right now it is a good market to go out and get a drilling rig at a fair market value of our favorite market daily rig rate. So don't anticipate repurchasing our own rig if we end up doing anything with the rig it'll be a workover rig and a little.
Jesse Allen: So I don't anticipate we purchasing our own rig. If we end up doing anything with the rig, it'll be a workover rig and a little less liability there. And so. To answer that question, I'm saying rig rates are good right now, based on the information talking to consultants and other operators out there, and so don't anticipate buying our own drilling rig, but there could be the potential for us to buy a workover rig. I hope that answers the question.
Mike: A little less liability there and so.
Mike: To answer that question I'm, saying rig rates are good right now based on the information talking to consultants and other operators out there and so don't anticipate buying our own drilling rig, but there could be the potential for us to buy a workover rig or two.
Mike: I hope that answers the question.
Jesse Allen: Thank you.
Mike: Thank you.
Jesse Allen: Next, the last question. Good job on cost controls. How do you look at 2025, especially with the industry under pressure? And do you think that you can bring your costs down somewhat lower? Oh, yes, we certainly are looking at a couple things, obviously. Jesse hit on some lease operating expenses, field expenses.
Mike: Next the last question good job on cost controls how do you look at 2025, especially with the end industry under pressure and do you think that you can bring your costs down somewhat lower.
Mike: Oh, yes, we certainly are looking at a couple of things obviously, Jesse you hit on some lease operating expenses field expenses.
Jesse Allen: Unknown Attendee, Jesse Sobelson, Dante Caravaggio, We already started and we expect that to be a full million reduction this year or last year. legal professional fees will be dropping and as I said after Q2, you know, if we do some of these acquisitions, those will obviously, they'll be expenditures, but they may or may not be, you know, capitalized as far as acquisition costs and amortized. So those are the areas of the biggest areas that we have. We don't have a whole bunch of buildings and stuff around. We have a really nice, small, uh, engineering. Design Center.
Mike: It's that we're aligned in that will dropped 30000, a month the insurance cost or what they are but we may be able to drive those down.
Mike: The labor and piece of you know, we already started and we expect that to be a hold million reduction this.
Mike: This year over last year.
Mike: Hum.
Mike: E.
Speaker Change: Legal and professional fees will be dropping and as I said after Q2.
Mike: If we do some of these acquisitions and social are obviously.
Mike: There'll be expenditures, but they may or may not be you know capitalize as far as acquisition costs and amortized, but so those are the areas of the biggest areas that we have we don't have a whole bunch of buildings and stuff around we have a really nice small engineering.
Mike: Design sooner, but we don't have a lot of we're not into a lot of big excess of stuff. We don't have a whole lot of staff, where we outsource it at very good reasonable rate. So.
Jesse Allen: But we don't have a lot of, we're not into a lot of big excessive stuff. We don't have a whole lot of staff, we outsource it at very good reasonable rates. So we're fairly lean and mean as it is, and these acquisitions will not increase our core base GNA, obviously, you have an acquisition, it has its own. insurance costs for that operation. We may, we're not going to add, you know, staff or a whole bunch of stuff. We can leverage our accounting firms or the payroll provider. legal firms. So we're not We're looking to spread the costs of the GNAs across multiple growth opportunities this year.
Mike: We're fairly lean and mean as it is in these acquisitions will not.
Mike: Increase our.
Mike: Core base G&A, obviously, you have an acquisition it has its own.
Mike: Insurance cost for that operation Yeah. We may we're not gonna add you know staff for a whole bunch of stuff, we can leverage our accounting firms or payroll provider.
Mike: Legal firms so we're not a.
Mike: When we're looking to spread the cost of the G and the news across multiple growth opportunities. This.
Mike: This year and you said this year, but obviously the future years, that's that's where we're were designed to do.
Jesse Allen: And you said this year, but obviously the future years, that's what we're designed to do.
Mike: So.
Michael Porter: So I think I hopefully answered that person's question, so I'll go back to you, Michael.
Mike: Hopefully I answered that person's question. So I'll go back to you Mike.
Michael Porter: Thank you.
Mike: Thank you if anybody else has any questions. Please feel free to give me a call and I'll arrange for one of the management people to call you Dante that's the end of the questions I'm, turning the meeting back over to you.
Michael Porter: If anybody else has any questions, please feel free to give me a call and I'll arrange for one of the management people to call you.
Dante Caravaggio: Dante, that's the end of the questions. I'm turning the meeting back over to you. Yeah, I'm just going to repeat the takeaways.
Speaker Change: Yeah, I I'm, just going to repeat the takeaways guys. We we put a theme on this discussion that we're we're ready for launch and it really the foundation to take this company to a whole another level and we're talking about achieving what the analysts said that we should be a four or $5 stock.
Dante Caravaggio: Guys, we put a theme on this discussion that we're ready for launch. And it really the foundation to take this company to a whole nother level. And we're talking about achieving what the analyst said, that we should be a four or $5 stock. To get there, we got to get our balance sheet in order. And that's by retiring debt, retiring these preferred shares, retiring the seller note. That's kind of step one. Step two is we got to get the production way higher than where it is. Near term, it's going to be done with workovers. Longer term, it's going to be done with drilling.
Mike: To get there we got to get our our balance sheet in order and that's why retiring debt retiring these preferred shares retiring the seller note. That's that's kind of step one step two is we got to get the production way higher than where it is near term, it's gonna be done with workovers longer term, it's gonna be.
Mike: Done with drilling and then smart hedging, which we're already doing smart cost control, which we're already doing well we're going to continue that focus so that we think that by Q3 and Q4, our shareholders and finally, you know stand up and cheer right now we're just grateful for all of you.
Dante Caravaggio: And then smart hedging, which we're already doing. Smart cost control, which we're already doing. We're going to continue that focus so that we think that by Q3 and Q4, our shareholders can finally, you know, stand up and cheer. Right now, we're just grateful for all of you for sticking it out with us, because we know this is painful. It's painful for us in the management team to see this stock down at this level. And we are doing everything behind the scenes to position this thing to take off. So soon. And if you have questions, we're very accessible.
Mike: You for sticking it out with us because we know this is painful it's painful for us and the management team to see this stock down at this level and we are doing everything behind the scenes to position. This thing to take off so with that I. Thank all of you for dialing in and look forward to talking to you again soon and if you.
Mike: I have questions were very accessible you can reach out to Mike you can call us where we're happy to just tell you everything we're doing so with that I turn it back over to Mike and Matt.
Dante Caravaggio: You can reach out to Mike, you can call us. We're happy to just tell you everything we're doing.
Operator: So with that, I turn it back over to Mike and Matt. Matt, you can finish off the meeting. Certainly.
Speaker Change: Matt you can finish off the meeting.
Speaker Change: Certainly everyone. This concludes today's event you may disconnect at this time and have a wonderful day. Thank you for your participation.
Operator: Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.