Q3 2025 EON Resources Inc Earnings Call

Mitch, I couldn't make head or tail out of those shareholder list. It was, it was a mess hush. Good day, we're live. Welcome to the Aeon resources Inc, announces third quarter 2025 earnings call. 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. It is now my pleasure to turn the floor over to your host, David Smith. Sir, the floor is yours.

Representative of views as of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

Further information regarding these and other risks and uncertainties are included in the company's annual report on form 10K for the fiscal year. Ended December, 31st 2024 and in other documents filed with the US securities.

Exchange Commission.

Today, I would like to introduce our presenters, the executive management staff of the company.

Uh, you'll see on the slide. If you're participating in the webcast, Dante Caravaggio, he is our CEO.

Mitchell Trotter.

Our Chief Financial Officer, myself, and Jesse Allen, who is our Vice President of Operations, are here to get started and kick this off. I'd like to make a few points about the third quarter. It was a remarkable quarter; we had record numbers.

Come of 5.6 billion. We retired all 41 million of senior and seller debt. We retired all preferred shares that had a Redemption value of 27 million.

And we increase shareholder Equity by 22.7 million.

In addition, we acquired a 10% override with the original seller group, who had retained it when we purchased the Greyber Jackson Field and the company that owned it.

Additionally we were able to farm out the San Andreas formation for our horizontal. Well drilling program in which we retain a 35% working interest throughout that program.

This is, in addition to the retention and continued development of the formations other than the Sin address, which includes our current wells and producing programs. So those are unaffected by this drilling program that will kick off next year. The thing to really note is this was all done and closed on September 9th, and we took on absolutely no debt to achieve these results.

So, a remarkable time. The drilling program that I described will be over the next 5 years. We expect to drill as many as 92 wells under that program. We will continue to aim for a 35% working interest in that development, and there are multiple pay zones throughout our acreage, not just the San Andreas. So, we're going to continue to develop all that we can in that respect.

Our current production is typically out of the 7 River formation and our water flow. Uh we're seeing results already from our balance sheet, being cleaned up with those transaction. Our ability to raise Capital has really been enhanced. Uh, it's really the look of a new company. Uh, our phone has been ringing off the hook with opportunities. We're looking at Acquisitions. We're always looking at enhancing reserves. Uh, but of course, throughout all of this, our main focus is to get the stock price up. That's that drives us every day. Um, those are the highlights, that's what strike me. And my role here is general counsel as to what we're doing, I'm very excited about the future and really pleased to introduce Dante care now to, uh, to take it up from from where I've described. Dante, go ahead, perfect. Yeah, well, thank you David.

To our shareholders. And really, as David said on September 9th, we we really did that and, and we didn't leave a mess. So the balance sheet is clean. The, the, the debt story is is a good 1. So we're attractive for investors. That will help us uh, raise Capital, buy new properties and and kind of off we go and I I think the other thought I'll leave you with is is inventory. You know, this deal we did with vertex, we've got in there. The potential of drilling 92 horizontal Wells, you have to really look hard at a lot of oil companies, much larger than us to find 92 drillable wells, in inventory. Well, we've got them and these are going to be big Wells. The other thing we've got again I'll use that word inventory. We've got 30350 producers sitting there at greyber Jackson, waiting for us.

To stimulate them, perforate them and, and make them do better than they're doing. And we're we're we're now in a position where the cash is there. We can invest in these things and get that to go and our primary focus with regard to. That is conversion of another 150, svr water, flood patterns, and, and by way of History, this field at 1 point was down to 300 barrels a day. It made it up to over a thousand

Thousand barrels a day, primarily by converting current Wells to svr injectors and producers well we're going to continue doing that same thing. Uh, the other thing we added to I'll say, inventory of work, overs is the purchase of the South Justice field. So that field was down to 50 barrels a day. It's got 200 Wells on it. We're going to activate those Wells and those Wells on average, make double or triple on a per. Well basis, the oil per day that that greyber Jackson does.

So if I recap this, yep, we raised 45 million, we cleaned up the balance sheet with that. We sold in interest to vertus to do some Drilling in the San Andreas included in. That is a 2d fund to do some experimental. Work overs to test their theory of, uh, completions in the San Andreas. So that's going to give us a near-term kick in production, um, the the farm out, I think we, we discuss, we discussed that.

And then um, going forward from that, we've got an awful lot of work, just to increase production, I Believe by 500 barrels a day without drilling over the next 6 to, to 9 months, not counting what virtus is going to be. And that includes completing the water injection line. You're going to hear, Jesse talked about.

Talk about that continuing to bring on Wells that are offline by using the 4S that are running and then through stimulations. So with that, I'm going to turn it over first to uh, Mitch droder to talk about the finances.

Alrighty, um, please advance to the financing highlights. Good. Well, thank you. Dante, and hello. I am Mitch Trotter. Let's see ifo, and I thank all of you for attending today. As Dante and David articulated, the September 9th funding resulted in major improvements to our Q3 financials. This highlight slot is the same one that's in the funding call deck. We've been through it before.

I have it there mainly for reference so that you have the deck um and it can help you understand as I go through the parts the financials

The sources of the 40.5 million of volumetric, or or refunding in the 5 million, uh, from the farm out agreement, they have many parts with different Gap treatments, so we'll kind of go through that a little bit and the same thing for the uses uh, where we retired, the senior debt and we acquired the seller or and we retire those preferred chairs.

All those major impacts flew through the balance sheet and some to the income statement. So let's uh move on to the balance sheet slide. And then let me uh,

Kind of show where some of the the big parts are on that.

You know, again, this is a major improvement. Can't say it more.

Times. Uh but the slide you have here is condensed version of what's actually in the queue uh the 10 q and it best illustrates the the impacts.

Again, we retired 21 million of senior debt.

And with that, we have a $1.5 million reduction in the debt that you will see come through the gain on the income statement, and I'll explain that in a little bit.

We also retired that senior debt of 15 million with the seller and it also eliminated a 5 million accrued interest. And we did all that for 7 million thus creating a 13 million gain that you'll also see when we go through the income statement in a minute.

Do note that the convertible notes are still there, but we've reduced them to $5.4 million from the original $9.8 million. That was for private loans and warrant obligations.

By the end of the quarter.

So, the end result of all of this cleaning up of debt is we only have $1 million left of current debt, and the other $4.4 million is long-term debt. Additionally, we have seen a significant drop in our crude liability, which is all good.

Now, shareholder Equity, that's also been transformed as well. The preferred shares as David stated that had a 27 million Redemption value. And it was retired for only 1 Point, 5 million common shares, uh, that we announced back on September 9th and this eliminated all the minority interests. So our Equity is cleaned up with respect to all the miscellaneous things.

The end result of our shareholder equity, the end result of the financing, elimination of the debt instruments, the related gains, and all of that flowing through our shareholder equity, went up by over $22 million from Q2 to Q3.

So with that, let's go ahead and move on to the income statement slide, please.

And then, uh, this 2 is a condensed version just like the balance sheet too. Hopefully, it lets you see things a little bit better. And this, again, is a reset of our P&L going forward. The Q3 net income was the highest level to date of $5.6 million for the quarter.

Well, most of that net income came from below the line. Those gains were definitely earned by all the hard work we did. Uh, and David did a really good job of articulating how we got there. So,

So, what does that mean? You blow the line, there's that $13.4 million of gain. That's a combination of the seller, note reduction, how the various ores and all the related costs relating to that are recorded for GAAP purposes.

And then there's that $1.8 million gain, which comes from the senior debt retirement, plus again from settling an old fee.

Now, offsetting these gains, there's $1.1 million of one-time expenses. The GAAP has us include this up in the GNA versus down below the line.

Gap, retire require this grouping of the $1.1 million one-time charges and G&A, which personally I think is misleading, but that's where it is. The actual recurring G&A expenses continue to decline quarter over quarter, and that's a huge improvement. That's what we've been talking about all year long, and we're pleased to say that.

Another cost reduction as we stated on the funding call is a decrease of interest expense of up to 500 k a month.

Most of the interest for September was eliminated with the September 9th funding. You can see that in the reduction of about $1.7 million down to $1.2 million in interest expense for the quarter.

And as always, I will tell you we'll take questions at the end of this presentation and are willing to have individual discussions as well. With that, reach out to Michael Porter, our investor relations guy, and we'll do that. We've done that plenty of times with many of you.

So with that, I do want to move on to Jesse to review operations, so please advance to the Jesse slide. Thank you.

Uh yes, good afternoon. I'm Jesse Allen VP of operations. And today I'll talk about some of the uh third quarter highlights from uh operations Viewpoint. In other words, our daily operations and then I'll make a few comments about the St. Andrews Farm out to uh vertus and some of those details.

So with that safety, that's always a foremost.

One of the most important things that we can do is make sure that all our employees are safe.

Since we took over operations back in November of 2023, uh, combined production, uh remains uh, consistent above a thousand gross, barrels of oil per day in the 2 Fields, the grey bird Jackson Field, and our South Justice field.

Currently, we have 4 well service rigs operating across both fields. We have 3 rigs in the Grey Bird Jackson Field, which is just outside Loco, Hills, New Mexico, and then 1 rig in the South Justice Field area, which is just outside of Jaw, New Mexico.

1 of the big projects that has been ongoing is the installation of 2 miles of injection pipeline. We uh, we're in the pressure testing mode right now and and hooking up of the injection Wells and each of the injection. Well headers, and so that's ongoing currently

And then we get to the big, the biggie here, which is the San Andreas farm out to Vertus, which we can't say enough. It was a really good deal for both parties. We signed that on the 9th of September, 2025.

A few of the really big highlights are that horizontal drilling is scheduled to begin there in 2026. Depending on the length of time it takes to get the BLM permits—that would be the federal drilling permits—we think it will probably be in the second quarter of 2026.

Now, I need to let you all know that, um, on our website, which is EON.

R.com you can find our horizontal drilling uh, package or deck that details a little bit of what. I'm I'm going to talk about today. And on our site you go, of course, you're on the home page. You click on operations, then click the uh, Grabber Jacksonville. And then page down to the uh, horizontal operations, and then click on horizontal drilling. And that will get you that presentation. But a few of those highlights, um, we uh, as a result of our, our farm out to vertus, um, we got a cash consideration of 5 million, the post deal working interest will be 65% vertus and 35% for eon.

Um, the plan is to drill 10 to 20 wells per year for the next 5 years.

Initial production from those wells will be in the range of 300 to 500 barrels of oil per day per well, that's what we anticipate. The cost of each of those wells will be in the $3.5 to $4 million range.

So with that, I'll turn the call back over to Dante Caravaggio, our CEO and President.

Yeah, thanks Jesse. So, uh, what's next or you know some of you may ask is are we a onetick? Pony is a third quarter going to repeat was that a 1-time deal and the answer is no. We we have not rested on our lawyer lower lawyers Laurels since we got that deal done and maybe sometimes we got to get some stuff out of David so we would sit on them. So I have to work that out there. Uh, and we're not happy with our costs. We want to cut about 200,000 a month out of our lease operating expense, and another $200,000 a month out of the GNA. And as Mitch said, we have a lot of 1-time charges that hit us in Q3 that caused, uh, those costs to kind of go up and they're gone. And, and you, you might say what was it? Well, we had a lot of help. We had a lot of Brokers, we had a lot of attorneys and uh, and they did a fabulous job, but now they're gone. They're off the payroll.

So um, back to what's next. And it it's it's back to the inventories that I talked about before. We got 92 Wells, we believe we can drill between the 2 Fields. We've got, we've got 500 producers that we can do work overs on and we can't get that all done in a year or even 2 years but over 3 years we're going to be busy. And what that does is increase

Is production and a lot of oil fields.

Through 2026. Well, we can see all the way to 2030. The these numbers are just going to keep going up. Well, beyond 2030, you know, that's the magic, I think of what we've got uh near-term production increase, we got to get the waterline energized, Jesse talked about that. We think that within 90 days, we're going to get a kick in oil production because our water flood is water star because this 4-inch supply lines not running. And it's been that way for for a year. And, and frankly, you haven't seen the effect of it because Jesse's been so good with stimulating Wells, keeping them all going. You just haven't seen that effect. When we kick that thing in its going to be a, it's going to be a real, a real boost.

Um, I've got here, we're going to do a material acquisition in the first half of next year. I'm just going to say we see big, big numbers without taking on debt and without selling any shares, where we can be creative to buy properties. We are looking at these, but we cannot tell you about it because it's top, top secret. However, I can't tell you; we're working on it diligently to the point of how are we going to operate? How are we going to raise the funds? How do we do this without diluting shares? How do we do this without taking on debt? We've got most of those questions answered, so it's really going to be fun when we can talk about it.

Uh, the horizontal drilling should commence the second quarter of next year. That's going to be a blast. You're going to get a glimpse of that when when vertus does some work overs and we expect those work overs to happen in the next 60 days. And we'll do our best to report that although, that might be kept secret, if it's too good because you know, these guys are, you know, they've got they've got something good and they're under our Hood. So, um, it's actually a battle to share much of that with everybody. The downside oil prices are weak, we'd like them to stay above 60 and we're we're encouraging everybody out there to, you know, drive to your destination, you know, put fill it up with premium and uh, stay under the speed limit and be safe.

Uh, we're mostly debt free with that. Helps us whether the storm. If we've got, uh, low oil prices and lower income. Uh, we can we can offset that with a savings of close to 400,000 dollars a month that we don't pay an interest so that that that expense is gone. Uh we also can help that by just increasing production so we're in a good position if the worst happens in oil prices drop gas, prices are increasing. So that's a good thing but we struggle to sell, all our gas, the Midstream buyer has struggled keeping their plant running

And we're looking at options and we've got some shareholders reaching out to us which we thank with regard to using uh, gas fire turbines to generate power. That could save us 70,000 a month. We could also use uh, the same turbines to power up uh, data centers or to power up a Bitcoin mining. So all those things are being done by our competitors and we're not, we really don't have the funds to experiment, but we are going to pick piggyback a proven solution. So with that, I'm going to just wrap it up and say we're we're we're we're excited about where we're at. We're no melting Ice Cube and we got great inventory to certainly carry us through the rest of this decade. And with that, I'll turn it back over to David and Matt and this is David here back to you. If you will go forward with a question and answer period that we've arranged

Certainly, everyone at this time will be conducting a question-and-answer session. If you have any questions or comments, please press *1 on your phone at this time.

We do ask that while posing a question, please pick up your handset if you're listening on speaker phones to provide optimum sound quality.

We do ask that participants please ask one question and one follow-up, then re-enter the queue.

And once again, if you have any questions or comments, please press *1 on your phone.

Thank you. Your first question is coming from William Peters. Your line is live.

Hi mining, Etc. Um,

It seems like, uh, a great future for the company if they could form some type of, uh, affiliation with somebody. I know you said money was tight, but to have that correlation would be great, um, for the future. Um, that's it. Thank you very much. Good holiday. Thank you, William. Yeah, thank you. The only note I'd say there is we just don't know enough yet; we're dabbling in it. You know, we don't have a proposal, but we're asking for proposals from people who know how to take our gas and monetize it.

So, thank you for bringing that up.

Okay, good luck. Thank you very much. Bye. Thank you. And once again, everyone, if you have any questions or comments, please press star, then 1 on your phone at this time. Please hold while I pull for questions.

Thank you, that concludes our verbal Q&A for those listening on 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 send to submit your question. I will now turn the call over to Mitch Trotter for the remaining questions.

Alrighty, thank you. Matthew, the, uh, first 2 questions are very similar, and I think we've answered, but I am going to, uh, read through them or paraphrase them. So, Dante can, uh, answer a little bit more if needed the just to the questions or to you Dante, uh, when do you expect the first horizontal drilling to start up, and

You know, with respect to the new opportunities in the future and exploring the reserves that we've identified in the past, as well as opportunities with this driller.

So we got, yeah, so once a month, I, Jesse, or I are meeting with Lance Taylor and his team. They’ve pretty much picked out the locations where they want to go. I’ll say the first dozen. So the steps they have to go through are to go ahead and get those permitted. And there’s a lot of folks who know the BLM was shut down and, um,

And the Trump administration is saying he's going to put the pedal to the metal to get drilling permits approved. But my best guess, and I base it on the feedback I have from my colleagues at Vertus, is that the permit meeting should get into the feds this year, and then hopefully it gets approved by the end of the first quarter and maybe by the end of the second quarter next year. We're drilling, and we should see results. We think in...

June or July of '26.

And by the way, the plan is to drill 10 to 20 wells a year, starting out with maybe 6 wells, something like that.

And, uh, these things are not decided yet. We do want to help the oil price above $60 a barrel; it's a no-brainer. Below $60, we have to do some hard thinking. So that's the best indication I can give you.

Thank you, Dante. The next question I will say is for me and the question is the Aeon warrants. They have 2 different expiration dates at 2 separate brokerage accounts. Uh, any idea. Why? Well, there is only 1 expiration date and that's 5 Years From when we became the public company in November.

The we have found that more than 2, Brokers have whatever they keep in the wrong date and the people's accounts as to, when the expirations of the warrants go. So it is, uh, November of 28th. So, what we can't control the Brokers, but, but that's, uh, what they've, what they've done. We we've reached out to them, why don't we do this on that 1 Mitchell? That that I want to run that question by Matt.

Our our SEC attorney and just double-check that. Because and I'm just saying this from memory, and I apologize guys for thinking on a call like this. But the, you know, some warrants were available by investors before we went public. And I don't know if the if the dates did Cascade in there depending where you bought them before before we went public, they're they're all gone. This is the the IPO warrants all from uh

The initial IPO, the brokerage accounts have admitted that, they've got it wrong.

Confused and I think it's an excellent question. Let's just put it on the website so everybody knows, you know, including me because I

I I yeah I it's not clear in my head so I apologize guys that I don't know. No that's that's fair and just so everyone knows, you know, we have an FAQ under our uh uh website on the investor page. I think it's under the governance or the documents, it's up on the right. We will um we'll just add that FAQ to it and so that we can then uh answer it there. So people can go look at it. Uh,

Okay, good point. So, okay. Um,

I think, Dante, you've answered this one, but I'll give it to you again. At what price? What barrel price is on resources? Start making money, and um...

Well, we we we we make we make money now. I mean, really, if you look at what we're doing the, we're we're, we're in the red about a 100 Grand, uh, you know, Mitch and I look at this, you know, today we're we're in the red about 100 Grand and I've asked that Mitch who controls gnas and Jesse, who controls lease operating expense to each cut 200,000. So, if we and, and they've got a plan. So I, I believe we're we're profitable right now at today's oil price. Certainly if we can get oil prices to go up to 65 or 70, then we don't have to work so hard and certainly, if we buy

Some additional Acquisitions, especially ones that don't cause the gnas to go up, which is what we believe is the case, and what we're looking at, then we we really get a shot in the arm. So I'm looking at really uh, high quality highly profitable properties, that will help us, but we don't really need anything to be profitable today. We just need to be a little better at controlling our costs and it's, well within our range. Remember, we got rid of a 700,000 principal and interest payment. So, we, we've got lots of room to work and, uh, you know, we, we, we were still paying down debt but sadly we leaned too hard on the ELO which created more shares in circulation. So we are doing our best to not do that at all and and make a go of it with just the production coming out of the ground, controlling our costs and adding what

1 or 2 Acquisitions. Hopefully in the next uh 6 to 6, to 9 months, something like that. I hope that answers the question.

Thank you, and let me uh, give this 1 to Jesse.

What issues are you facing selling the gas?

Well, let's see. Um, we're currently making about, uh, 6 to 700 mcf per day or 700,000 standard cubic feet per day to a plant. That's, uh, it's an older plant. The mimar plant and they've been doing a lot of Maintenance recently, uh, on their, uh, gas treating trains. And then they've been putting in some new lines. So it's not only us that, uh, are being curtailed. It's also all the other operators that produce into that plant. They uh, uh, the operator of the mouse from our plant. They've actually got another plant that they just got online and they're lining that out now.

And so we anticipate that in the not too distant future. We shouldn't have this issue of getting rid of all our gas. And um I'm sure that the Genesis of that question probably came from. Well once you start drilling the horizontal Wells and you're making a lot more gas, what are you going to do with that gas? Well, that gas will go to that same plant but by that time they should have worked out all the maintenance, uh, issues that they're having to perform and then some of that gas will go to the, uh, the new plant. And so we don't anticipate in the future having any gas sales issues uh, and getting rid of our gas.

I hope that answers the question right there.

Sounds like it does. Okay, this is when Dante is for you.

Congratulations on the great third quarter. With regards to the first three wells by Vertice.

Will be drilling by mid 26 in your agreement with them. Are they required to drill? At least these first 3 Wells regardless of the oil price at the time

We don't have to pay a dime. They've they've front all that money, but I believe they're going to drill, you know, as long as oil prices are, you know, as as long as oil prices don't collapse, I believe they're going to drill. So I mean, is it is 55? Okay is 50? Okay, is 45. Okay, I don't know the answer to that, but they have 5 years to drill 18, Wells, to hold the rights to our to our

San Andreas formation and we we just feel confident, you know? I mean, I mean, I'll just have to give my Outlook on oil prices if oil prices decline, much below, 60, it's not attractive for anybody to drill. And and so what happens is the Drillers and the the oil producers all shut down and then what happens? The the the fields just start declining and so oil prices, uh, will start going up as oil production drops. So now, oil production drops oil prices. Go up, drilling starts picking up, so it's, it's kind of a, you know, a, a, a self-controlling, uh, loop. If oil prices go down drilling slows down, it decreases in production, uh, increases us slows down producing oil oil prices. Go back up. Then as it goes up, drilling picks back up. You know, production goes back up, oil prices come down. So,

So I I think the, the search for equilibrium, you know, is what everybody's guessing. The number is probably going to be slightly above where people would drill and and people, frankly they're reluctant to drill at 60, our formation is pretty good. So we feel we have healthy economics at 60. A lot of people can't drill without 70. So if, if you said, where will this sort of level out and where will it be? And, and how does all this stuff kind of work? I mean, I, I feel like oil prices are going to hang in there 60 to 70 with, some excursions below, that range, and above that range. And that's the best I can tell you. I hope that hope that answers your question.

Okay. Uh, we have time for a few more questions—just a couple more. But let me, uh, this one's for me.

The uh what convertible notes were redeemed and which have not been redeemed and how did you decide which in the order to redeem uh going back in time, we've talked about the uh converting the private loans and the warrant obligations and the convertible notes all the way back into the end of 24. And as we have been stating really every quarter. Our intent is to try to clean up, uh, all of this by the end of this year, at least, with respect to the uh, the non-insured. And that's what we've just about done. Uh,

The all of these private loans came from people that were close to us when we were a spa uh and had no source of income. So that's what got us the line to begin with.

So we have redeemed the day off now uh all but 250,000 of non Insider and the last under 2 million is insiders and we can't do them right now anyway so that's kind of how we picked them and whose redeemed and there's not redeemed. So

Yeah, I, you know, I want to add something to that, you know, as a management team.

We take great pride that nobody who has invested with us, has lost a dime and and you know and we view that as a as a sacred trust with our investors and shareholders and for those that hold the shares. Trust me. I'm 1 of those that paid north of 2 bucks. You know, for these shares and I'm not going to rest until this stock is really, you know, Joe and I talked about it, a hundred bucks, a share. Now am I going to get that done? You know this year, probably not. In fact, I almost bet I won't get that done this year, but I I think before um, before the end of the day, that's my goal. I'm just going to say that.

Okay, the, um, you know, I've got about three more questions, and I think we have time for this next one. Actually, the next two will be for me, but the first one is very late. Close to that. What is the dilution risk, either from the current notes converting or other things?

On the 250,000 of shares, you know, that's excuse me, uh, convertible notes. You know, that's a 50 cents a day. That's about a half million

So, it's not huge in the grand scheme of things. Um, so we are trying to and as Dante had alluded to, you know, we have the ELO that we've talked about for since October of 22. Um, and we use it. Very sparingly, uh, and small amounts, uh, not to drive anything. And and so that's kind of the delusion risk. And when we look at these Acquisitions and this is the anything else. Uh, we look at Acquisitions. We're looking at the proper balance of debt, or this biometric funding, or Equity, if it's creative if it makes sense. Um, you know, so like the mean 5 shares that we took out the preferred shares that made sense, uh, because it took out 27 million of, uh, Redemption value. Uh, for a really, a minor amount of the number of shares that could have been converted, I mean, so that's

Uh, how we address that the next one is also for me.

What is the 26th crude oil? Price of values that you plan and anticipate to a hedge? We have hedge a quarter of our production through the first quarter of 26 at, uh, 62.50

And we watch it, and, you know, we'll probably get up into the 50%, maximum 70%. Now, if it goes crazy, we'll get closer to 70% oil price. But we watch it. I check it every day, and if the price goes up enough to lock in more over 6, 2, 5, 0.

I met, uh, but I really want it to be much higher than that, uh, but we're going to have to watch the market, what's going on at the time, what we've got going on at the time, and, uh, to make certain that we are properly covered. We don't have any bank covenants or anything like that requiring it, and so that's where we are with respect.

To the hedging, and I will, this will be a good one for you to finish, Dante. Uh, so this will be the last question, I believe, and it's an acquisition by a big player.

Can that be considered?

So, I don't understand the question an acquisition by a big play. Can we be acquired by big player? I'm guessing that's what it's saying. But are are we willing? I take it both ways or we could be swallowed. Or would we swallow somebody else? Yeah, okay I'll I'll handle that. I mean for for 1 trillion dollars will sell for 1 trillion dollars. Um the the the issue is the marketplace is very sophisticated.

Ated. They're, they're not going to give us what we're worth and almost very few. People will pay us what the value is of the oil in the ground. They will pay us for the value of the oil. Barrels coming out of the ground that have been doing so for the last say year or 2. So with us, where we have a huge inventory of drilling and work overs, nobody's going to pay us what we're worth. So I don't think, you know, and we're not going to sell unless somebody paid us what we're worth. So I think the answer is um for Bargain Basement Hunter. We're not for sale for somebody that that wants 92 Wells to drill and wants 500 Wells to work over, um, in a management team that knows how to do things without selling much stock and without, uh, taking on debt. Yeah, for the right price. Sure, but

I think we're way better off serving our shareholders by doing what we've been doing: keeping our promise. By acquiring more quality assets, with a lot of inventory baked in, paying them—nothing for the inventory, paying them a fair price for their PDP (producing developed producing) proven reserves. And, uh, you know, getting a crazy good return on our money for our shareholders.

And everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day.

Thank you for your participation.