EON Resources Inc. (NYSE American:EONR) reported higher operating revenue before derivative adjustments for the first quarter of 2026 and provided an update on its San Andres horizontal development in the Permian Basin. The company said its first two San Andres horizontal wells had entered initial flowback operations and frac-load recovery, with permanent production facilities installed and operational.
#Q1 operating revenue rises
EON Resources said operating revenue before derivative adjustments increased approximately 19% to $4.22 million in Q1 2026, compared with $3.54 million in Q4 2025. The company attributed the increase to operating activity.
EON filed its 10-Q for the first quarter of 2026 and released an analysis of those results on October 13, 2026. Management believes operating performance and development milestones could support meaningful revenue growth over the coming quarters.
#San Andres wells advance to flowback
The first two San Andres horizontal wells are being developed with EON Resources retaining a 35% working interest. The wells have begun initial flowback operations and recovery of frac load, while all permanent production infrastructure is installed and operational.
EON said the San Andres interval is not hedged. It also cautioned that, because the development is exploratory and novel, the timing of first oil and later production performance cannot yet be reliably predicted.
The company said additional milestones and interpretations will depend on sufficient production data, technical evaluation and coordination among the working-interest parties. EON expects significant revenue growth from the Grayburg-Jackson horizontal drilling programme in the San Andres interval, but its comments on timing and production remain subject to those limitations.
#Hedged and unhedged revenue sources
EON Resources describes its revenue structure in three categories: hedged revenue, revenue from production that is not hedged and the non-cash derivative impact.
The company said its current hedge position on the Grayburg-Jackson Field provides $950,000 per month of protection. Grayburg-Jackson Field lease operating expenses are approximately $700,000 per month, leaving $250,000 per month for overhead cost coverage, according to EON.
EON also identified unhedged production from the South Justis Unit and the Grayburg-Jackson Field waterflood programme. The South Justis Unit, which the company purchased in June 2025, adds an average of 1,600 net oil barrels of production per month. The Grayburg-Jackson waterflood programme contributes an average of 3,000 net oil barrels per month.
#Derivative adjustments affect reported revenue
EON said non-cash derivative adjustments do not represent its operating activity. The company described the calculation as a hypothetical quarter-end scenario that assumes all hedges were cancelled at the end of the quarter. It said the impact moves inversely to the oil price: higher prices can reduce reported revenue through the adjustment, while lower prices can increase it.
For Q1 2026, EON reported a non-cash revenue reduction of ($3.3) million. The company linked the adjustment to the benchmark oil price moving from $57 per barrel on December 31, 2025, to $101 per barrel on March 31, 2026.
EON said Q2 2026 performance was expected to include a $2.2 million increase to revenue from the derivative impact because the oil price on June 30, 2026, was $69 per barrel. The company also said the oil price on September 30, 2026, was $90 per barrel, resulting in another non-cash derivative impact on revenue.
#Permian Basin asset base
EON Resources has approximately 20,000 leasehold acres in the Permian Basin and approximately 1.2 billion barrels of original oil in place.
The Grayburg-Jackson Field spans 13,700 contiguous leasehold acres in Eddy County, New Mexico. It includes stacked pay zones and almost 1 billion barrels of estimated original oil in place, of which less than 7% has been produced to date. The San Andres horizontal development programme commenced in August 2026.
The South Justis Unit covers 5,360 contiguous acres in Lea County, New Mexico, and has approximately 207 million barrels of original oil in place. EON said its geological and reservoir work on the Blinebry zone indicates development potential that management believes is similar in character to the opportunity identified in the Grayburg-Jackson Field.
#Forward-looking statements and risks
EON said its expectations regarding revenue, development activity and future operating results are forward-looking statements. The company warned that actual events and results could differ materially because of factors including the availability of funds, the results of financing efforts and risks related to its business.
The company cautioned readers not to place undue reliance on these statements, which speak only as of the date of the press release. EON also said it does not undertake to update or revise them unless required by applicable securities law.
#Key Takeaways
- Operating revenue before derivative adjustments rose approximately 19% to $4.22 million in Q1 2026 from $3.54 million in Q4 2025.
- The first two San Andres horizontal wells, in which EON holds a 35% working interest, began initial flowback and frac-load recovery.
- The San Andres production is not hedged, and EON said first oil timing and later production performance cannot yet be reliably predicted.
- The Grayburg-Jackson Field hedge position provides $950,000 per month of protection against approximately $700,000 per month of lease operating expenses.
- EON said derivative adjustments reduced Q1 2026 revenue by ($3.3) million on a non-cash basis.
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