UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31,
 2024

 TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from
to

 EON Resources, Inc

 (Exact name of registrant as specified in its
charter)

 Delaware

 001-41278

 85- 4359124

 (State or other jurisdiction of

incorporation or organization)

 (Commission File Number)

 (I.R.S. Employer

Identification Number)

 3730 Kirby Drive, Suite 1200

 Houston, TX

 77098

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including
area code: (713) 834-1145

 HNR Acquisition Corp.

 (Former name or former address, if changed since
last report)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of Each Class:

 Trading Symbol:

 Name of Each Exchange on Which Registered:

 Class A Common Stock, par value $0.0001 per share

 EONR

 NYSE American LLC

 Warrants, each whole warrant exercisable for three quarters of one share of Class A Common Stock at an exercise price of $11.50 per whole share

 EONR.WS

 NYSE American LLC

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See definition of "large accelerated filer," "accelerated filer, "smaller reporting company" and "emerging
growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that require a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of the voting and non-voting
common equity stock held by non-affiliates of the Registrant was approximately $ 8.3 million based on the last sale price on June 28, 2024.

 As of April 15, 2025, 18,312,626 shares of Class
A Common Stock, par value $0.0001 per share, and 0 shares of Class B Common Stock, par value $0.0001 per share, were issued and outstanding.

 PAGE

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 iii

 Item 1

 Business

 Item 1.A.

 Risk Factors

 Item 1.B.

 Unresolved Staff Comments

 Item 1.C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information.

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 i

 CERTAIN TERMS

 Unless otherwise stated in this Annual Report on Form 10-K (this
"Report"), or the context otherwise requires, references to:

 "Class A Common Stock" is to our Class A Common Stock, par value $0.0001 per share;

 "Class B Common Stock" is to our Class B Common Stock, par value $0.0001 per share;

 "founder shares" are to shares of our Class A Common Stock initially purchased by our sponsor in a private placement prior to our Initial Public Offering;

 "initial business combination" or "Purchase" refers to the completion of our initial business combination on November 15, 2023, pursuant to the closing of the transactions contemplated by the MIPA whereby we acquired (through our subsidiaries) 100% of the outstanding membership interests of EON Resources, LLC, a Texas limited liability company ("EON" or the "Target");

 "Initial Public Offering" refers to the Initial Public Offering closed on February 15, 2022;

 "initial stockholders" are to our holders of our founder shares prior to our Initial Public Offering (or their permitted transferees);

 "management" or our "management team" are to our officers and directors;

 "MIPA" means that that certain Amended and Restated Membership Interest Purchase Agreement, dated August 28, 2023, as amended (the "MIPA"), by and among us, HNRA Upstream, LLC, a newly formed Delaware limited liability company which is managed by us, and is a subsidiary of ours ("OpCo"), and HNRA Partner, Inc., a newly formed Delaware corporation and wholly owned subsidiary of ours ("SPAC Subsidiary", and together with us and OpCo, "Buyer" and each a "Buyer"), CIC EON LP, a Delaware limited partnership ("CIC"), DenCo Resources, LLC, a Texas limited liability company ("DenCo"), EON Resources Management, LLC, a Texas limited liability company ("EON Management"), 4400 Holdings, LLC, a Texas limited liability company ("4400" and, together with CIC, DenCo and EON Management, collectively, "Seller" and each a "Seller"), and, solely with respect to Section 6.20 of the MIPA, Sponsor.

 "Predecessor" refers to the historical business of EON prior to the Purchase on November 15, 2023.

 "private placement units" are to the units issued to our sponsor in a private placement simultaneously with the closing of our Initial Public Offering;

 "private placement warrants" are to the warrants sold as part of the private placement units, and to any private placement warrants or warrants issued in connection with working capital loans that were sold to third parties, our executive officers, or our directors (or permitted transferees).

 "public shares" are to shares of our Class A Common Stock sold as part of the units in our Initial Public Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market);

 "public stockholders" are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder's and member of our management team's status as a "public stockholder" shall only exist with respect to such public shares;

 "public warrants" are to our redeemable warrants sold as part of the units in our Initial Public Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market);

 "Sponsor" refers to HNRAC Sponsors, LLC, a Delaware limited liability company;

 "warrants" are to our redeemable warrants, which includes the public warrants as well as the private placement warrants to the extent they are no longer held by the initial purchasers of the private placement units or their permitted transferees;

 "HNR" and "HNRA" are to the Company
prior to the date of the Company's name change on September 17, 2024.

 "Registrant," "we," "us," "company",
"our company", "EON", "EON Resources" and "Successor" are to EON Resources, Inc. (and
the business of EON which became the business of the Company after giving effect to the Purchase).

 ii

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 Some statements contained in this Report may constitute
"forward-looking statements" for purposes of United States federal securities laws. Our forward-looking statements
include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies
regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intends," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should,"
"would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean
that a statement is not forward-looking. Forward-looking statements in this report may include, for example, statements about:

 our expectations around the performance of our business;

 our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

 our potential ability to obtain additional financing;

 the level of production on our properties;

 overall and regional supply and demand factors, delays, or interruptions of production;

 our public securities' potential liquidity and trading;

 the lack of a market for our securities;

 competition in the oil and natural gas industry;

 the trust account not being subject to claims of third parties; or

 future operating results.

 The forward-looking statements contained
in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There
can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties
include, but are not limited to, those factors described under the heading " Risk Factors." Should one or more of these
risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These
risks and others described under "Risk Factors" may not be exhaustive.

 By their nature, forward-looking statements involve
risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution
you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition
and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking
statements contained in this Report. In addition, even if our results or operations, financial condition and liquidity, and developments
in the industry in which we operate are consistent with the forward-looking statements contained in this Report, those results or developments
may not be indicative of results or developments in subsequent periods.

 iii

 SUMMARY OF SIGNIFICANT RISKS AFFECTING OUR COMPANY

 Our business is subject to multiple risks and uncertainties, as more
fully described in "Risk Factors" and elsewhere in this Annual Report on Form 10-K. We urge you to read the disclosures under
the caption "Risk Factors" and this Annual Report in full. Our significant risks may be summarized as follows:

 Our independent registered public accounting firm's
 report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a "going concern."

 EON

 The Company's producing properties are located in the Permian Basin, making it vulnerable to risks associated with operating in a single geographic area.

 Title to the properties in which EON is acquiring an interest may be impaired by title defects.

 EON depends on various services for the development and production activities on the properties it operates. Substantially all EON's revenue is derived from these producing properties. A reduction in the expected number of wells to be developed on EON's acreage by or the failure of EON to develop and operate the wells on its acreage could have an adverse effect on its results of operations and cash flows adequately and efficiently.

 EON's identified development activities are susceptible to uncertainties that could materially alter the occurrence or timing of their development activities.

 Acquisitions and EON's development of EON's leases will require substantial capital, and our company may be unable to obtain needed capital or financing on satisfactory terms or at all.

 EON currently plans to enter hedging arrangements with respect to the production of crude oil, and possibly natural gas which is a smaller portion of the reserves. EON will mitigate the exposure to the impact of decreases in the prices by establishing a hedging plan and structure that protects the earnings to a reasonable level, and the debt service requirements.

 EON's estimated reserves are based on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of its reserves.

 We believe EON currently has ineffective internal control over its financial reporting.

 iv

 A substantial majority of EON's revenues from crude oil and gas producing activities are derived from its operating properties that are based on the price at which crude oil and natural gas produced from the acreage underlying its interests are sold. Prices of crude oil and natural gas are volatile due to factors beyond EON's control. A substantial or extended decline in commodity prices may adversely affect EON's business, financial condition, results of operations and cash flows.

 If commodity prices decrease to a level such that EON's future undiscounted cash flows from its properties are less than their carrying value, EON may be required to take write-downs of the carrying values of its properties.

 The unavailability, high cost or shortages of rigs, equipment, raw materials, supplies or personnel may restrict or result in increased costs to develop and operate EON's properties.

 The marketability of crude oil and natural gas production is dependent upon transportation and processing and refining facilities, which EON cannot control. Any limitation in the availability of those facilities could interfere with EON's ability to market its production and could harm EON's business.

 Drilling for and producing crude oil and natural gas are high-risk activities with many uncertainties that may materially adversely affect EON's business, financial condition, results of operations and cash flows.

 Crude oil and natural gas operations are subject to various governmental laws and regulations. Compliance with these laws and regulations can be burdensome and expensive for EON, and failure to comply could result in EON incurring significant liabilities, either of which may impact its willingness to develop EON's interests.

 Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could cause EON to incur increased costs, additional operating restrictions or delays and have fewer potential development locations.

 The unaudited pro forma condensed consolidated combined financial information and EON's respective unaudited forecasted financial information included in this report may not be indicative of what the actual financial position or results of operations would have been or will be. Our future results following the Purchase may differ, possibly materially, from the unaudited pro forma condensed consolidated combined financial information and EON's respective unaudited forecasted financial information presented in this report.

 The historical financial results of EON and the unaudited pro forma condensed consolidated combined financial information included elsewhere in this report may not be indicative of what EON's actual financial position or results of operations would have been if it were a public company.

 v

 ITEM 1. BUSINESS

 Overview

 EON Resources, Inc. (formerly HNR Acquisition
Corp) (the "Company" or "EON"), was incorporated in Delaware as a blank check company formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one
or more businesses or entities. Prior to closing the Purchase, our efforts were limited to organizational activities, completion of an
initial public offering and the evaluation of possible business combinations. On February 15, 2022, we consummated the Initial Public
Offering of 7,500,000 units (the "Units"), at $10.00 per Unit, generating proceeds of $75,000,000. Additionally, the underwriter
fully exercised its option to purchase 1,125,000 additional Units, for which we received cash proceeds of $11,250,000. Simultaneously
with the closing of the Initial Public Offering, we consummated the sale of 505,000 private placement units at a price of $10.00 per unit
generating proceeds of $5,050,000 in a private placement to our Sponsor and EF Hutton (formerly Kingswood Capital Markets) ("EF
Hutton"). On April 4, 2022, the Units separated into Class A Common Stock and warrants, and ceased trading. On April 4, 2022, the
Class A Common Stock and warrants commenced trading on the NYSE American. On September 16, 2024, the Company filed a Certificate of Amendment
(the "Certificate of Amendment") to its Amended and Restated Certificate of Incorporation with the Secretary of State of the
State of Delaware to change the Company's name from "HNR Acquisition Corp" to "EON Resources Inc.", effective
on September 17, 2024.

 We identified as the initial target for our initial
business combination. Our efforts to identify a prospective target business were limited to a particular industry or geographic region.
While we were permitted to pursue an acquisition opportunity in any industry or sector, we focused on assets used in exploring, developing,
producing, transporting, storing, gathering, processing, fractionating, refining, distributing or marketing of natural gas, natural gas
liquids, crude oil or refined products in North America.

 Purchase

 On December 27, 2022, we, entered into a
Membership Interest Purchase Agreement (the "Original MIPA") with CIC Pogo LP, a Delaware limited partnership ("CIC"),
DenCo Resources, LLC, a Texas limited liability company ("DenCo"), Pogo Resources Management, LLC, a Texas limited liability
company ("Pogo Management"), 4400 Holdings, LLC, a Texas limited liability company ("4400" and, together with
CIC, DenCo and Pogo Management, collectively, "Seller" and each a "Seller"), and, solely with respect to Section 7.20
of the Original MIPA, HNRAC Sponsors LLC, a Delaware limited liability company ("Sponsor"). On August 28, 2023, we, HNRA
Upstream, LLC, a newly formed Delaware limited liability company which is managed by us, and is a subsidiary of ours ("OpCo"),
and HNRA Partner, Inc., a newly formed Delaware corporation and wholly owned subsidiary of ours ("SPAC Subsidiary", and together
with us and OpCo, "Buyer" and each a "Buyer"), entered into an Amended and Restated Membership Interest Purchase
Agreement (the "A&R MIPA") with Seller, and, solely with respect to Section 6.20 of the A&R MIPA, the Sponsor,
which amended and restated the Original MIPA in its entirety (as amended and restated, the "MIPA"). Our stockholders approved
the transactions contemplated by the MIPA at a special meeting of stockholders that was originally convened October 30, 2023, adjourned,
and then reconvened on November 13, 2023 (the "Special Meeting").

 On November 15, 2023 (the "Closing Date"),
as contemplated by the MIPA:

 We filed a Second Amended and Restated Certificate of Incorporation (the "Second A&R Charter") with the Secretary of State of the State of Delaware, pursuant to which the number of authorized shares of our capital stock, par value $0.0001 per share, was increased to 121,000,000 shares, consisting of (i) 100,000,000 shares of Class A Common Stock, (ii) 20,000,000 shares of Class B Common Stock, and (iii) 1,000,000 shares of preferred stock, par value $0.0001 per share;

 Our shares of common stock were reclassified as Class A Common Stock; the Class B Common Stock has no economic rights but entitles its holder to one vote on all matters to be voted on by stockholders generally; holders of shares of Class A Common Stock and shares of Class B Common Stock will vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by the Second A&R Charter;

 (A) We contributed to OpCo (i) all of our assets (excluding our interests in OpCo and the aggregate amount of cash required to satisfy any exercise by our stockholders of their Redemption Rights (as defined below)) and (ii) 2,000,000 newly issued shares of Class B Common Stock (such shares, the "Seller Class B Shares") and (B) in exchange therefor, OpCo issued to us a number of Class A common units of OpCo (the "OpCo Class A Units") equal to the number of total shares of Class A Common Stock issued and outstanding immediately after the closing (the "Closing") of the transactions contemplated by the MIPA (following the exercise by EON stockholders of their Redemption Rights) (such transactions, the "SPAC Contribution"); and

 Immediately following the SPAC Contribution, OpCo contributed $900,000 to SPAC Subsidiary in exchange for 100% of the outstanding common stock of SPAC Subsidiary (the "SPAC Subsidiary Contribution");

 Immediately following the SPAC Subsidiary Contribution, Seller sold, contributed, assigned, and conveyed to (A) OpCo, and OpCo acquired and accepted from Seller, ninety-nine percent (99.0%) of the outstanding membership interests of Pogo Resources, LLC, a Texas limited liability company ("Pogo" or the "Target"), and (B) SPAC Subsidiary, and SPAC Subsidiary purchased and accepted from Seller, one percent (1.0%) of the outstanding membership interest of Target (together with the ninety-nine percent (99.0%) interest, the "Target Interests"), in each case, in exchange for (x) $900,000 of the Cash Consideration (as defined below) in the case of SPAC Subsidiary and (y) the remainder of the Aggregate Consideration (as defined below) in the case of OpCo (such transactions, together with the SPAC Contribution and SPAC Subsidiary Contribution and the other transactions contemplated by the MIPA, the "Purchase").

 The "Aggregate Consideration" for
the Target Interests was: (a) cash in the amount of $31,074,127 in immediately available funds (the "Cash Consideration"),
(b) 2,000,000 Class B common units of OpCo ("OpCo Class B Units") valued at $10.00 per unit (the "Common Unit Consideration"),
which will be equal to and exchangeable into 2,000,000 shares of Class A Common Stock issuable upon exercise of the OpCo Exchange Right
(as defined below), as reflected in the amended and restated limited liability company agreement of OpCo that became effective at Closing
(the "A&R OpCo LLC Agreement"), (c) the Seller Class B Shares, (d) $15,000,000 payable through a promissory note to Seller
(the "Seller Promissory Note"), (e) 1,500,000 preferred units (the "OpCo Preferred Units" and together with the
Opco Class A Units and the OpCo Class B Units, the "OpCo Units") of OpCo (the "Preferred Unit Consideration",
and, together with the Common Unit Consideration, the "Unit Consideration"), and (f) an agreement for Buyer, on or before
November 21, 2023, to settle and pay to Seller $1,925,873 from sales proceeds received from oil and gas production attributable to Pogo,
including pursuant to its third party contract with affiliates of Chevron. At Closing, 500,000 Seller Class B Shares (the "Escrowed
Share Consideration") were placed in escrow for the benefit of Buyer pursuant to an escrow agreement and the indemnity provisions
in the MIPA. The Aggregate Consideration is subject to adjustment in accordance with the MIPA.

 In connection with the Purchase, holders of 3,323,707
shares of common stock sold in EON's initial public offering (the "public shares") properly exercised their right to
have their public shares redeemed (the "Redemption Rights") for a pro rata portion of the trust account (the "Trust
Account") which held the proceeds from EON's initial public offering, funds from EON's payments to extend the time to
consummate a business combination and interest earned, calculated as of two business days prior to the Closing, which was approximately
$10.95 per share, or $49,362,479 in the aggregate. The remaining balance in the Trust Account (after giving effect to the Redemption Rights)
was $12,979,300.

 Immediately upon the Closing, Pogo Royalty exercised
the OpCo Exchange Right as it relates to 200,000 OpCo Class B units (and 200,000 shares of Class B Common Stock). After giving effect
to the Purchase, the redemption of public shares as described above and the exchange mentioned in the preceding sentence, were (i) 5,097,009
shares of Class A Common Stock issued and outstanding, (ii) 1,800,000 shares of Class B Common Stock issued and outstanding and (iii)
no shares of preferred stock issued and outstanding.

 The Class A Common Stock and EON warrants continue
to trade, but now as an operating company, on the NYSE American under the symbols "EONR" and "EONR.WS".

 First Amendment to Amended and Restated
Membership Interest Purchase Agreement

 On November 15, 2023, Buyer, Seller, and Sponsor
entered into the MIPA Amendment, whereby the Parties agreed to extend the outside date for the transaction to November 30, 2023, and to
place 500,000 shares of Seller Class B Shares into escrow instead of 500,000 OpCo Class B Units.

 Settle Up Letter Agreement

 On November 15, 2023, Buyer and Seller entered
into the Settle Up Letter Agreement, whereby Seller agreed to accept a minimum amount of cash at Closing less than $33,000,000, provided
that, on or before November 21, 2023, Buyer must settle and pay to Seller $1,925,873 from sales proceeds received from oil and gas production
attributable to Pogo, including pursuant to its third party contract with affiliates of Chevron.

 OpCo A&R LLC Agreement

 In connection with the Closing, EON and Pogo Royalty,
LLC, a Texas limited liability company, an affiliate of Seller and Seller's designated recipient of the Aggregate Consideration
("Pogo Royalty"), entered into an amended and restated limited liability company agreement of OpCo (the "OpCo A&R
LLC Agreement"). Pursuant to the A&R OpCo LLC Agreement, each OpCo unitholder (excluding EON) will, subject to certain timing
procedures and other conditions set forth therein, have the right (the "OpCo Exchange Right") to exchange all or a portion
of its OpCo Class B Units for, at OpCo's election, (i) shares of Class A Common Stock at an exchange ratio of
one share of Class A Common Stock for each OpCo Class B Unit exchanged, subject to conversion rate adjustments for stock splits,
stock dividends and reclassifications and other similar transactions, or (ii) an equivalent amount of cash. Additionally, the holders
of OpCo Class B Units will be required to exchange all of their OpCo Class B Units (a "Mandatory Exchange")
upon the occurrence of the following: (i) upon the direction of EON with the consent of at least fifty percent (50%) of the holders
of OpCo Class B Units; or (ii) upon the one-year anniversary of the Mandatory Conversion Trigger Date. In connection with
any exchange of OpCo Class B Units pursuant to the OpCo Exchange Right or acquisition of OpCo Class B Units pursuant to
a Mandatory Exchange, a corresponding number of shares of Class B Common Stock held by the relevant OpCo unitholder will be cancelled.

 The OpCo Preferred Units will be automatically
converted into OpCo Class B Units on the two-year anniversary of the issuance date of such OpCo Preferred Units (the
"Mandatory Conversion Trigger Date") at a rate determined by dividing (i) $20.00 per unit (the "Stated Conversion
Value"), by (ii) the Market Price of the Class A Common Stock (the "Conversion Price"). The "Market
Price" means the simple average of the daily VWAP of the Class A Common Stock during the five (5) trading days prior to
the date of conversion. On the Mandatory Conversion Trigger Date, EON will issue a number of shares of Class B Common Stock to Pogo
Royalty equivalent to the number of OpCo Class B Units issued to Pogo Royalty. If not exchanged sooner, such newly issued OpCo
Class B Units shall automatically exchange into Class A Common Stock on the one-year anniversary of the Mandatory
Conversion Trigger Date at a ratio of one OpCo Class B Unit for one share of Class Common Stock. An equivalent number of shares
of Class B Common Stock must be surrendered with the OpCo Class B Units to us in exchange for the Class A Common Stock.
As noted above, the OpCo Class B Units must be exchanged upon the one-year anniversary of the Mandatory Conversion Trigger Date.

 Promissory Note

 In connection with the Closing, OpCo issued the
Seller Promissory Note to Pogo Royalty in the principal amount of $15,000,000. The Seller Promissory Note provides for a maturity
date that is six (6) months from the Closing Date, bears an interest rate equal to 12% per annum, and contains no penalty for prepayment.
If the Seller Promissory Note is not repaid in full on or prior to its stated maturity date, OpCo will owe interest from and after default
equal to the lesser of 18% per annum and the highest amount permissible under law, compounded monthly. The Seller Promissory Note is subordinated
to the Term Loan (as defined herein).

 Registration Rights Agreement

 In connection with the Closing, EON and Pogo Royalty
entered into a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to which EON has agreed to provide
Pogo Royalty with certain registration rights with respect to the shares of Class A Common Stock issuable upon exercise of the OpCo Exchange
Right, including filing with the SEC an initial registration statement on Form S-1 covering the resale by the Pogo Royalty of
the shares of Class A Common Stock issuable upon exercise of the OpCo Exchange Right so as to permit their resale under Rule 415
under the Securities Act, no later than thirty (30) days following the Closing, use its commercially reasonable efforts to have the
initial registration statement declared effective by the SEC as soon as reasonably practicable following the filing thereof with the SEC,
and use commercially reasonable efforts to convert the Form S-1 (and any subsequent registration statement) to a shelf registration
statement on Form S-3 as promptly as practicable after EON is eligible to use a Form S-3 Shelf.

 In certain circumstances, Pogo Royalty can demand
our assistance with underwritten offerings, and Pogo Royalty will be entitled to certain piggyback registration rights.

 Option Agreement

 In connection with the Closing, EON, HNRA Royalties,
LLC, a newly formed Delaware limited liability company and wholly owned subsidiary of EON ("HNRA Royalties") and Pogo Royalty
entered into an Option Agreement (the "Option Agreement"). Pogo Royalty owns certain overriding royalty interests in certain
oil and gas assets owned by Pogo (the "ORR Interest"). Pursuant to the Option Agreement, Pogo Royalty granted irrevocable
and exclusive option to HNRA Royalty to purchase the ORR Interest for the Option Price (as defined below) at any time prior to November
15, 2024. The option is not exercisable while the Seller Promissory Note is outstanding.

 The purchase price for the ORR Interest upon exercise
of the option is: (i) (1) $30,000,000 the ("Base Option Price"), plus (2) an additional amount equal to interest
on the Base Option Price of twelve percent (12%), compounded monthly, from the Closing Date through the date of acquisition of the ORR
Interest, minus (ii) any amounts received by Pogo Royalty in respect of the ORR Interest from the month of production in which the
effective date of the Option Agreement occurs through the date of the exercise of the option (such aggregate purchase price, the "Option
Price").

 The Option Agreement and the option will immediately
terminate upon the earlier of (a) Pogo Royalty's transfer or assignment of all of the ORR Interest in accordance with the Option
Agreement and (b) November 15, 2024.

 Pursuant to the Option Agreement, upon execution,
EON issued to Pogo Royalty 10,000 shares of Class A Common Stock.

 Director Nomination and Board Observer Agreement

 In connection with the Closing, we entered into
Director Nomination and Board Observer Agreement (the "Board Designation Agreement") with CIC. Pursuant to the Board Designation
Agreement, CIC has the right, at any time CIC beneficially owns our capital stock, to appoint two board observers to attend all meetings
of our Board of Directors. In addition, after the time of the conversion of the OpCo Preferred Units owned by Pogo Royalty, CIC will
have the right to nominate a certain number of members of the board of directors depending on Pogo Royalty's ownership percentage
of Class A Common Stock as further provided in the Board Designation Agreement.

 Backstop Agreement

 In connection with the Closing, EON entered a
Backstop Agreement (the "Backstop Agreement") with Pogo Royalty and certain of EON's founders listed therein (the "Founders")
whereby Pogo Royalty will have the right ("Put Right") to cause the Founders to purchase Pogo Royalty's OpCo Preferred
Units at a purchase price per unit equal to $10.00 per unit plus the product of (i) the number of days elapsed since the
effective date of the Backstop Agreement and (ii) $10.00 divided by 730. Seller's right to exercise the Put Right will survive
for six (6) months following the date the Trust Shares (as defined below) are not restricted from transfer under the Letter Agreement
(as defined in the MIPA) (the "Lockup Expiration Date").

 As security that the Founders will be able to
purchase the OpCo Preferred Units upon exercise of the Put Right, the Founders agreed to place at least 1,300,000 shares of
Class A Common Stock into escrow (the "Trust Shares"), which the Founders can sell or borrow against to meet their obligations
upon exercise of the Put Right, with the prior consent of Seller. EON is not obligated to purchase the OpCo Preferred Units from
Pogo Royalty under the Backstop Agreement. Until the Backstop Agreement is terminated, Pogo Royalty and its affiliates are not permitted
to engage in any transaction which is designed to sell short the Class A Common Stock or any other publicly traded securities of
EON.

 Founder Pledge Agreement

 In connection with the Closing, EON entered a
Founder Pledge Agreement (the " Founder Pledge Agreement ") with the Founders whereby, in consideration of placing the
Trust Shares into escrow and entering into the Backstop Agreement, EON agreed: (a) by January 15, 2024, to issue to the Founders an aggregate
number of newly issued shares of Class A Common Stock equal to 10% of the number of Trust Shares; (b) by January 15, 2024, to issue to
the Founders number of warrants to purchase an aggregate number of shares of Class A Common Stock equal to 10% of the number of Trust
Shares, which such warrants shall be exercisable for five years from issuance at an exercise price of $11.50 per shares; (c) if the Backstop
Agreement is not terminated prior to the Lockup Expiration Date, to issue an aggregate number of newly issued shares of Class A Common
Stock equal to (i) (A) the number of Trust Shares, divided by (B) the simple average of the daily VWAP of the Class A Common Stock
during the five (5) Trading Days prior to the date of the termination of the Backstop Agreement, subject to a minimum of $6.50 per share,
 multiplied by (C) a price between $10.00-$13.00 per share (as further described in the Founder Pledge Agreement), minus (ii)
the number of Trust Shares; and (d) following the purchase of OpCo Preferred Units by a Founder pursuant to the Put Right, to issue a
number of newly issued shares of Class A Common Stock equal to the number of Trust Shares sold by such Founder. Until the Founder Pledge
Agreement is terminated, the Founders are not permitted to engage in any transaction which is designed to sell short the Class A
Common Stock or any other publicly traded securities of EON.

 Purchase, Sale, Termination and Exchange
Agreement

 On February 10, 2025, the Company entered into
a Purchase, Sale, Termination and Exchange Agreement (the "Agreement"), by and among the Company, OpCo, SPAC Subsidiary, HNRA
Royalties, Pogo Royalty, CIC, DenCo, Pogo Management, and 4400. The closing of the transactions contemplated by the Agreement (the "Closing")
is subject to the satisfaction of various conditions, including the Company obtaining financing.

 Pursuant to the Agreement, the Company agreed
to purchase the ORRI from Pogo Royalty for $14,000,000, payable in cash at the Closing. In addition, at the Closing, Pogo Royalty agreed
to waive all outstanding interest accrued under the Seller Note, reduce the outstanding principal amount of the Seller Note to $8,000,000
and settle and discharge the Seller Note in exchange for the payment of $8,000,000 in cash. Pogo Royalty further agreed to assign and
transfer the OpCo Preferred Units to OpCo in exchange for the issuance by the Company of 3,000,000 shares of Class A Common Stock at the
Closing.

 As consideration for entering into the Agreement,
the Company agreed to release the Escrow Shares to Pogo Royalty and to promptly process any exchange notice delivered by Pogo Royalty
to exchange the Escrow Share for shares of Class A Common Stock, and Pogo Royalty agreed to deliver such exchange notice within two days
of the date of the Agreement. The Agreement contains customary representations, warranties, indemnification provisions closing conditions,
and covenants.

 The Closing is contingent upon the occurrence
of certain conditions, including (i) the availability of financing to the Company, (ii) the receipt by Pogo Royalty of a consent of First
International Bank & Trust to the Agreement and a written termination agreement, executed by the Company and First International Bank
& Trust, terminating that certain Subordination Agreement, dated as of November 15, 2023, by and among First International Bank &
Trust, the Company and Pogo Royalty, (iii) the receipt by the Company of any required stockholder consents, (iv) the respective representations
and warranties of the parties being true and correct, subject to certain materiality exceptions and (v) the performance by the parties
in all material respects of their respective obligations under the Agreement.

 The Agreement may be terminated at any time by
mutual consent of the parties thereto or by any one party if the counterparty is in material breach of the Agreement. If the Closing does
not occur prior to 1:00 p.m. Central Time on June 3, 2025, the Agreement will automatically terminate. No assurances can be made that
the Company will satisfy these conditions or that the Closing will otherwise occur.

 Overview

 Pogo is an exploration and production company
that began operations in February 2017. Pogo is based in Dallas, Texas, and a field office in Loco Hills, New Mexico. As of December 31,
2024, our operating focus is the Northwest Shelf of the Permian Basin, with a specific emphasis on oil and gas producing properties located
in the Grayburg-Jackson Field in Eddy County, New Mexico. Pogo is the Operator of Record of its oil and gas properties, operating
its properties through its wholly owned subsidiary, LH Operating LLC. Pogo completed multiple acquisitions in 2018 and 2019. These
acquisitions included multiple producing properties in Lea and Eddy counties, New Mexico. In 2020, after identifying its core development
property, Pogo successfully completed a series of divestures of its non-core properties. Then, with one key asset, its Grayburg-Jackson Field
in Eddy County, New Mexico, Pogo focused all of its efforts on developing this asset. This has been Pogo's focus for 2022 and 2023.

 Currently, we have 12 employees (5 executive officers
where 4 are in Houston and 1 in Lubbock; 7 field staff in Loco Hills). From time to time, on an as needed basis, contract workers handle
additional necessary responsibilities.

 Pogo owns, manages, and operates, through its
wholly owned subsidiary, LH Operating, LLC, 100% working interest in a gross 13,700 acres located on the Northwest Shelf of the prolific
oil and gas producing Permian Basin. Pogo benefits from cash flow growth through continued development of its working interest's
ownership, with relatively low capital cost and lease operating expenses. As of December 31, 2024, average net daily production associated
with Pogo's working interests was 811 barrel of oil equivalent ("BOE") per day consisting of 86% oil and 14% natural
gas. Pogo expects to continue to grow its cash flow by production enhancements in its operations on its gross 13,700-acre leasehold.
Furthermore, Pogo intends to make additional acquisitions within the Permian Basin, as well as other oil and gas producing regions in
the USA, that meet its investment criteria for minimum risk, geologic quality, operator capability, remaining growth potential, cash flow
generation and, most importantly, rate of return.

 As of December 31, 2024, 100% of Pogo's
gross 13,700 leasehold acres were located in Eddy County, New Mexico, where 100% of the leasehold working interests owned by Pogo
consist of state and federal lands. Pogo believes the Permian Basin offers some of the most compelling rates of return for Pogo and significant
potential for cash flow growth. As a result of compelling rates of return, development activity in the Permian Basin has outpaced all
other onshore U.S. oil and gas basins since the end of 2016. This development activity has driven basin-level production to
grow faster than production in the rest of the United States.

 Pogo's working interests entitle it to receive
an average of 97% of the net revenue from crude oil and natural gas produced from the oil and gas reservoirs underlying its acreage. Pogo
is not under any mandatory obligation to fund drilling and completion costs associated with oil and gas development because 100% of its
lease holdings are held by production. As a working interest owner with significant net earnings, Pogo seeks to fully capture all remaining
oil and gas reserves underlying its leasehold acres by systematically developing its low risk, predictable, proven reserves by means of
adding perforations in previously drilled and completed wells, were applicable, and drilling new wells in a predetermined drilling pattern.
Accordingly, Pogo's development model generates strong margins greater than 60%, at low risk, predictable, production outcomes that
requires low overhead and is highly scalable. For the year ended December 31, 2024, Pogo's lifting cost was about $28.92 per
barrel of oil equivalent at a realized price of $77.01 per BOE, excluding the impact of settled commodity derivatives. Pogo is led by
a management team with extensive oil and gas engineering, geologic and land expertise, long-standing industry relationships and a
history of successfully managing a portfolio of working and leasehold interests, producing crude oil and natural gas assets. Pogo intends
to capitalize on its management team's expertise and relationships to increase production and cash flow in the field.

 Pogo Market Conditions

 The price that Pogo receives for the oil and natural
gas we produce is largely a function of market supply and demand. Because Pogo's oil and gas revenues are heavily weighted toward
oil, Pogo is more significantly impacted by changes in oil prices than by changes in the price of natural gas. World-wide supply
in terms of output, especially production from properties within the United States, the production quota set by OPEC, and the strength
of the U.S. dollar can adversely impact oil prices.

 Historically, commodity prices have been volatile,
and Pogo expects the volatility to continue in the future. Factors impacting the future oil supply balance are world-wide demand
for oil, as well as the growth in domestic oil production.

 Key Producing Region

 As of December 31, 2024, all of the Company's
properties were located exclusively within the Northwest Shelf of the Permian Basin. As of December 2023, the Permian Basin had the
highest level of drilling activity in the United States with greater than 300 drilling rigs operating. By comparison, The Eagle Ford
Shale region located in Southwest-central Texas has less than 60 rigs operating. The Permian Basin includes three major geologic
provinces: the Delaware Basin to the west, the Midland Basin to the east and the Central Basin Platform in between. The Northwest Shelf
is the western limits of the Delaware Basin, a sub-basin within the Permian Basin complex. The Delaware Basin is identified by an
abundant amount of oil-in-place, stacked pay potential across an approximately 3,900-foot hydrocarbon column, attractive well economics,
favorable operating environment, well developed network of oilfield service providers, and significant midstream infrastructure in place
or actively under construction. One hundred percent (100%) of our working interests are located as of December 31, 2024, on the New
Mexico side of the Delaware Basin. According to the USGS, the Delaware Basin contains the largest recoverable reserves among all unconventional
basins in the United States.

 We believe the stacked-play potential of the Delaware
Basin combined with favorable drilling economics support continued production growth as Pogo develops its leasehold position and improve
well-spacing and completion techniques. Relative to other basins in the continental United States, Pogo believes the Delaware Basin is
in a mid-stage of well development and that per-well returns will improve as Pogo continues to employ enhanced oil recovery technologies
on its leasehold acreage. Pogo believes these enhanced oil recoveries will continue to support development activity where it holds significant
working interest, with predictable returns leading to increasing cash flows with low maintenance costs.

 Working Interests in Grayburg-Jackson Field

 As of December 31, 2024, the Company
owns a 100% working interest in 13,700 gross acres located in Eddy County, New Mexico, with a 74% weighted average net revenue. The
13,700 gross acres are strategically located in the prolific oil field, Grayburg-Jackson field. Working interests granted to
the Lessee (Pogo) under an Oil and Gas Lease are real property interests that grant ownership of the crude oil and natural gas
underlying a specific tract of land and the rights to explore for, drill for and produce crude oil and natural gas on that land or
to lease those exploration and development rights to a third party. Those rights to explore for, drill for and produce crude oil and
natural gas on that land have a set period of time for the working interest owner to exercise those rights. Typically, an Oil and
Gas Lease can be automatically extended beyond the initial lease term with continuous drilling, production or other operating
activities or through negotiated contractual lease extension options. Only when production and drilling cease, the lease
terminates.

 As of December 31, 2024, 100% of the Company's
working interests are held by production ("HBP") meaning that Pogo is not under time sensitive obligation to drill or work-over any
wells on its 13,700 acres. As of December 31, 2023, 100% of the wells and leases are operated by Pogo. Pogo is the official Operator
of record with the state and federal regulatory agencies. As of December 31, 2024, the Company generates a substantial majority of
its revenues and cash flows from its working interests when crude oil and natural gas are produced and sold from its acreage.

 Currently, Pogo's working interests reside
entirely in the Northwest Shelf of the Permian Basin, which Pogo believes is one of the premier crude oil and natural gas producing regions
in the United States. As of December 31, 2024, Pogo's working interests covered 13,700 gross acres, with the royalty owners
retaining a weighted average 26% royalty. The following table summarizes Pogo's working interest's position in the lands comprising
its leasehold as of December 31, 2024.

 LH Operating, LLC Northwest Shelf (Permian Basin) Leasehold

 Date of Acquisition

 Gross

 Acres

 Federal

 Leases

 State

 Leases

 Working

 Interest

 NRI

 (weighted

 avg.) (1)

 Royalty

 Interest (2)

 Operations

 HBP

 2018

 13,700

 %

 %

 %

 %

 %

 (1)

 Pogo's net revenue interests are based on its weighted average royalty interests across its entire leasehold

 (2)

 No unleased royalty interests as of December 31, 2024.

 As of December 31, 2024, Pogo has working
interests in 342 shallow (above 4,000 ft), vertical wells producing oil and gas in paying quantities. Ninety-five of the 342 producing
wells were completed between 2019 and June 2022 by Pogo. In 2019, Pogo initiated a 4-well pilot water injection project into
the Seven Rivers ("7R") oil reservoir underlying its 13,700-acre leasehold. After an evaluation period extending into
early 2020, Pogo determined the pilot project was successful by producing oil in paying quantities by simply adding perforations in the
7R reservoir in previously drilled and completed wells. Following the successful completion of the 4-well pilot project, Pogo commenced
a work-over program by adding perforations in the 7R reservoir in 91 previously drilled wells between 2019 and June 2022. Prior
to initiating the 4-well pilot project the legacy wells were averaging 275 BOE/d. By December 2023, the total production increased
to 1,022 BOE/d. Pogo's management team has determined, and verified by Haas and Cobb Petroleum Consultants, LLC ("Cobb "),
that 115 proved well patterns, developed but non-producing, are scheduled to be brought into production between 2024 and 2027.

 As of December 31, 2024, the estimated proved
crude oil and natural gas reserves attributable to Pogo's interests in its underlying acreage were 14,492 MBOE (97% oil and 3% natural
gas), based on a reserve report prepared by Cobb, worldwide petroleum consultants. Of these reserves, approximately 28% were classified
as proved developed producing ("PDP") reserves, 42% were classified as proved developed non-producing ("PDNP")
reserves and 30% were classified as proved undeveloped ("PUD") reserves. PUD reserves included in these estimates relate solely
to wells that are not yet drilled nor were not yet producing in paying quantities as of December 31, 2024. Estimated proved reserves
included in this section is presented on an actual basis, without giving pro forma effect to transactions completed after such dates.

 Pogo believes its production and discretionary
cash flows will grow significantly as Pogo completes its substantial PDNP inventory of 7R well patterns located on its gross 13,700 acreage.
As of December 31, 2024, Pogo had production from 342 vertical wells, and it has identified 127 additional PDNP well patterns based
on its assessment of current geological, engineering and land data. As of December 31, 2024, Pogo has identified 43 PUD well patterns
based on its assessment of current geological, engineering and land data

 Pogo's working interest development strategy
anticipates shifting any drilling activity associated with its PUD reserves following Pogo's completion of its PDNP reserves. The
work-over costs attributable to adding perforations in wells previously drilled and completed is significantly less than drilling
new wells. As of December 31, 2024, Pogo's leasehold position has 25.7 wells per square mile. Pogo expects to see increases
in its production, revenue and discretionary cash flows from the development of 115 well patterns in the 7R reservoir. Pogo believes its
current leasehold working interests provide the potential for significant long-term organic revenue growth as Pogo develops its PDNP
reserves to increase crude oil and natural gas production.

 Business Strategies

 The Company's primary business objective
is to generate discretionary cash flow by maintaining its strong cash flow from the PDP reserves and increasing cash flow by developing
predictable, low cost PDNP reserves in its Permian Basin asset. The Company intends to accomplish this objective by executing the following
strategies:

 Generate strong cash flow supported by means
of disciplined development of its PDNP Reserves. As the sole working interest owner, the Company benefits from the continued organic
development of its acreage in the Permian Basin. As of December 31, 2024, EON, in conjunction with Cobb, a third-party engineering
consulting firm, has confirmed that EON has 127, low cost, well patterns to be developed during 2025 to 2028. The total costs to complete
these 127 well patterns have been predetermined by historical analysis. The estimated cost to complete each PDNP pattern is $339,252 and
the estimated cost to complete each PUD pattern is $1,187,698. A single well pattern consists of one each producing well with its corresponding
or dedicated water injection wells, with each injection well situated on four sides of the producing well. Water injection wells are necessary
to maintain reservoir pressure in its original state and to move the oil in place toward the producing well. Pressure maintenance helps
ensure maximum oil and gas recovery. Without pressure maintenance, oil recoveries from a producing oil reservoir generally do not exceed
10% of the original oil in place ("OOIP"). With pressure maintenance by re-injecting produced water into the oil reservoir,
then Pogo expects to see ultimate oil recoveries 25% or greater of the OOIP. Offsetting oil wells on its leasehold also take advantage
of the water injected into the oil reservoir, and is able to convert a high percentage of its revenue to discretionary cash flow. Because
Pogo owns 100% working interests it incurs 100% of the monthly leasehold operating costs for the production of crude oil and natural gas
or capital costs for the drilling and completion of wells on its acreage. Because these wells are shallow oil producers, with vertical
depths between 1500 ft and 4000 ft, the monthly operating expenses are relatively low.

 Focus primarily on the Permian Basin. All
of the Company's working interests are currently located in the Permian Basin, one of the most prolific oil and gas basins in the
United States. Pogo believes the Permian Basin provides an attractive combination of highly-economic and oil-weighted geologic
and reservoir properties, opportunities for development with significant inventory of drilling locations and zones to be delineated our
top-tier management team.

 Business Relations. Leverage expertise and relationships to continue acquiring Permian Basin targets with high working interests in actively producing oil fields from top-tier E&P operators, with predictable, stable cash flow, and with significant growth potential. the Company has a history of evaluating, pursuing and consummating acquisitions of crude oil and natural gas targets in the Permian Basin and other oil producing basins. the Company's management team intends to continue to apply this experience in a disciplined manner when identifying and acquiring working interests. The Company believes that the current market environment is favorable for oil and gas acquisitions in the Permian Basin and other oil generating basins. Numerous asset packages from sellers presents attractive opportunities for assets that meet the Company's target investment criteria. With sellers seeking to monetize their investments, Pogo intends to continue to acquire working interests that have substantial resource potential in the Permian Basin. Pogo expects to focus on acquisitions that complement its current footprint in the Permian Basin while targeting working interests underlying large scale, contiguous acreage positions that have a history of predictable, stable oil and gas production rates, and with attractive growth potential. Furthermore, the Company seeks to maximize its return on capital by targeting acquisitions that meet the following criteria:

 sufficient visibility to production growth;

 attractive economics;

 de-risked geology supported by stable production;

 targets from top-tier E&P operators; and

 a geographic footprint that Pogo believes is complementary to its current Permian Basin asset and maximizes its potential for upside reserve and production growth.

 Maintain conservative and flexible capital
structure to support the Company's business and facilitate long-term operations. The Company is committed to maintaining
a conservative capital structure that will afford it the financial flexibility to execute its business strategies on an ongoing basis.
Pogo believes that internally generated cash flows from its working interests and operations, available borrowing capacity under its revolving
credit facility, and access to capital markets will provide it with sufficient liquidity and financial flexibility to continue to acquire
attractive targets with high working interests that will position it to grow its cash flows in order to distributed to its shareholders
as dividends and/or reinvested to further expand its base of cash flow generating assets. Pogo intends to maintain a conservative leverage
profile and utilize a mix of cash flows from operations and issuance of debt and equity securities to finance future acquisitions.

 Competitive Strengths

 The Company believes that the following competitive
strengths will allow it to successfully execute its business strategies and achieve its primary business objective:

 Permian Basin focused public company positioned as a preferred buyer in the basin. The Company believes that its focus on the Permian Basin will position it as a preferred buyer of Permian Basin working interests in known producing oil and gas fields. As of December 31, 2024, 100% of its current leasehold is located in an area with proven results from multiple stacked productive zones. The Company's properties in the Permian Basin are high-quality, high-margin, and oil weighted, and the Company believes we will be viewed favorably by the investment community as compared to equity consideration diluted by lower quality assets located in less prolific basins. Pogo targets acquisitions of operated properties with high working interest percentages that are relatively undeveloped in the Permian Basin, and it believes the organic development of its acreage will result in substantial production growth regardless of acquisition activity.

 Favorable and stable operating environment in the Permian Basin. With over 400,000 wells drilled in the Permian Basin since 1900, the region features a reliable and predictable geological and regulatory environment, according to Enverus. The Company believes that the impact of new technology, combined with the substantial geological information available about the Permian Basin, also reduces the risk of development and exploration activities as compared to other, emerging hydrocarbon basins. As of December 31, 2024, 100% of the Company's acreage was located in New Mexico and does not require federal approval to develop its 115 well patterns classified as PDNP reserves and does not have impediments in order to deliver Pogo's production to market.

 Experienced team with an extensive track record. the Company's team has deep industry experience focused on development in the Permian Basin as well as other significant oil producing regions and has a track record of identifying acquisition targets, negotiating agreements, and successfully consummating acquisitions, and operating the acquired target using industry standards. Pogo plans to continue to evaluate and pursue acquisitions of all sizes. Pogo expects to benefit from the industry relationships fostered by its management team's decades of experience in the oil and natural gas industry with a focus on the Permian Basin, in addition to leveraging its relationships with many E & P company executives.

 Development potential of the properties underlying the Company's Permian Basin working interests. The Company's assets consist of 100% working interests in a gross 13,700 acres located in the Northwest Shelf of the Permian Basin. The Company expects production from its working interest ownership to increase its oil and gas production by 1,358 BOE/d as it develops its PDNP reserves after completing 115 well patterns. The Company believes its assets in the Permian Basin is in an earlier to mid-stage of development and that the average number of producing wells per section in its 13,700-acre leasehold will increase as Pogo continues to add PUD well patterns, which would allow the Company to achieve higher realized cash flows to distributed to its shareholders as dividends and/or reinvested to further expand its base of cash flow generating assets. The Company believes that once it completes its PDNP and PUD program as detailed in the Cobb reserve report, The Company expects its BOE/d will increase to 2,853 BOE/d combined with PDP.

 Crude Oil and Natural Gas Data

 In this report, we include estimates of reserves
associated with the assets located in New Mexico as of December 31, 2024 and 2023. Such reserve estimates are based on evaluations
prepared by the independent petroleum engineering firm of Cobb, in accordance with Standards Pertaining to the Estimating and Auditing
of Oil and Gas Reserves Information promulgated by the Society of Petroleum Evaluation Engineers and definitions and guidelines established
by the SEC. The December 31, 2024 and 2023 reserve reports include the total interests of Pogo Resources, LLC, including the 10% overriding
royalty interest not acquired in the Purchase, and the reserve report as of December 31, 2024 is included in this filing. As such, the
estimates of proved oil and gas and discounted future net cash flows include the total interests of Pogo Resources, LLC.

 Cobb is an independent consulting firm founded
in 1983. Its compensation is not contingent on the results obtained or reported. Frank J. Marek, a Registered Texas Professional
Engineer and a senior technical advisor of Cobb, is primarily responsible for overseeing the preparation of the reserve report. His professional
qualifications meet or exceed the qualifications of reserve estimators set forth in the "Standards Pertaining to Estimation and
Auditing of Oil and Gas Reserves Information" promulgated by the Society of Petroleum Engineers. His qualifications include: Bachelor
of Science degree in Petroleum Engineering from Texas A&M University 1977; member of the Society of Petroleum Engineers; member of
the Society of Petroleum Evaluation Engineers; and 40 years of experience in estimating and evaluating reserve information and estimating
and evaluating reserves; he is proficient in judiciously applying industry standard practices to engineering and geoscience evaluations
as well as applying SEC and other industry reserve definitions and guidelines.

 Preparation of Reserve Estimates

 Our reserve estimates as of December 31,
2024 and 2023 included in this report is included are based on evaluations prepared by the independent petroleum engineering firm of Cobb
Petroleum Consultants, LLC in accordance with Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information
promulgated by the Society of Petroleum Evaluation Engineers and definitions and guidelines established by the SEC. The December 31, 2024
and 2023 reserve reports include the total interests of Pogo Resources, LLC, including the 10% overriding royalty interest not acquired
in the Purchase, and the reserve report as of December 31, 2024 is included in this filing. As such, the estimates of proved oil and gas
and discounted future net cash flows include the total interests of Pogo Resources, LLC.

 We selected Cobb as its independent reserve engineer
for its historical experience and geographic expertise in engineering similar resources.

 In accordance with rules and regulations of the
SEC applicable to companies involved in crude oil and natural gas producing activities, proved reserves are those quantities of crude
oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically
producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government
regulations. The term "reasonable certainty" means deterministically, the quantities of crude oil and/or natural gas are much
more likely to be achieved than not, and probabilistically, there should be at least a 90% probability of recovering volumes equal to
or exceeding the estimate. All of our proved reserves were estimated using a deterministic method. The estimation of reserves involves
two distinct determinations. The first determination results in the estimation of the quantities of recoverable crude oil and natural
gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance
with the definitions established under SEC rules. The process of estimating the quantities of recoverable reserves relies on the use of
certain generally accepted analytical procedures. These analytical procedures fall into four broad categories or methods: (i) production
performance-based methods, (ii) material balance-based methods; (iii) volumetric-based methods and (iv) analogy. These
methods may be used singularly or in combination by the reserve evaluator in the process of estimating the quantities of reserves. Reserves
for proved developed producing wells were estimated using production performance methods. Non-producing reserve estimates, for developed
and undeveloped properties, were forecast using a pattern simulation model.

 To estimate economically recoverable proved reserves
and related future net cash flows, EON considered many factors and assumptions, including the use of reservoir parameters derived from
geological and engineering data that cannot be measured directly, economic criteria based on current costs and the SEC pricing requirements
and forecasts of future production rates.

 Under SEC rules, reasonable certainty can be established
using techniques that have been proven effective by actual production from projects in the same reservoir or an analogous reservoir or
by other evidence using reliable technology that establishes reasonable certainty. Reliable technology is a grouping of one or more technologies
(including computational methods) that have been field tested and have been demonstrated to provide reasonably certain results with consistency
and repeatability in the formation being evaluated or in an analogous formation. To establish reasonable certainty with respect to EON's
estimated proved reserves, the technologies and economic data used in the estimation of its proved reserves have been demonstrated to
yield results with consistency and repeatability, and include production and well test data, downhole completion information, geologic
data, electrical logs, radioactivity logs, core data, and historical well cost and operating expense data.

 Internal Controls

 Our internal staff of petroleum engineers and
geoscience professionals work closely with its independent reserve engineer to ensure the integrity, accuracy and timeliness of data furnished
to such independent reserve engineer in their preparation of reserve estimates. The accuracy of any reserve estimate is a function of
the quality of available data and of engineering and geological interpretation. As a result, the estimates of different engineers often
vary. In addition, the results of drilling, testing and production may justify revisions of such estimates. Accordingly, reserve estimates
often differ from the quantities of oil and natural gas that are ultimately recovered. See " Risk Factors Related to Our Business "
appearing elsewhere in this report. Our engineering group is responsible for the internal review of reserve estimates.

 No portion of EON's engineering group's
compensation is directly dependent on the quantity of reserves booked. The engineering group reviews the estimates with the third-party petroleum
consultant, Cobb, an independent petroleum engineering firm.

 Reconciliation of Standardized Measure to PV-10

 Neither PV-10 nor PV-10 after ARO are financial
measures defined under accounting principles generally accepted in the United States of America ("GAAP"); therefore, the following
table reconciles these amounts to the standardized measure of discounted future net cash flows, which is the most directly comparable
GAAP financial measure. Management believes that the non-GAAP financial measures of PV-10 and PV-10 after ARO are relevant and useful
for evaluating the relative monetary significance of oil and natural gas properties. PV-10 and PV-10 after ARO are used internally when
assessing the potential return on investment related to oil and natural gas properties and in evaluating acquisition opportunities. Management
believes that the presentation of PV-10 and PV-10 after ARO provide useful information to investors because they are widely used by professional
analysts and sophisticated investors in evaluating oil and natural gas companies. PV-10 and PV-10 after ARO are not measures of financial
or operating performance under GAAP, nor are they intended to represent the current market value of our estimated oil and natural gas
reserves. PV-10 after ARO is equivalent to the standardized measure of discounted future net cash flows as defined under GAAP. Investors
should not assume that PV-10, or PV-10 after ARO, of our proved oil and natural gas reserves shown above represent a current market value
of our estimated oil and natural gas reserves.

 The reconciliation of PV-10 and PV-10 after ARO
to the standardized measure of discounted future net cash flows relating to our estimated proved oil and natural gas reserves is as follows
(in thousands):

 2024

 2023

 Present value of estimated future net revenues (PV-10)

 $
 207,666

 $
 280,791

 Present value of estimated ARO, discounted at 10%

 (404
)

 (173
)

 Standardized measure

 $
 207,262

 $
 280,618

 Summary of Reserves

 The following table presents EON's estimated
proved reserves as of December 31, 2024 and 2023. The reserve report include the total interests of Pogo Resources, LLC, including
the 10% overriding royalty interest not acquired in the Purchase, and the December 31, 2024 reserve report is included in this filing
as an exhibit. As such, the estimates of proved oil and gas and discounted future net cash flows include the total interests of Pogo Resources,
LLC. The reserve estimates presented in the table below are based on reports prepared by Cobb, EON's independent petroleum engineers,
which reports were prepared in accordance with current SEC rules and regulations regarding oil and natural gas reserve reporting:

 2024 (1)

 2023 (2)

 Estimated proved developed producing reserves:

 3,870

 4,002

 1,149

 -

 -

 4,025

 4,194

 Estimated proved non-producing reserves:

 5,933

 7,275

 1,125

 1,526

 -

 -

 6,120

 7,529

 Estimated proved undeveloped reserves:

 4,215

 4,137

 -

 -

 4,346

 4,279

 Estimated proved reserves:

 14,018

 15,414

 2,840

 3,525

 -

 -

 14,491

 16,002

 (1)

 EON's estimated proved reserves were determined using average first-day-of-the-month prices for the prior 12 months in accordance with SEC guidance. For crude oil volumes, the average WTI posted price of $75.48 per Bbl as of December 31, 2024, was adjusted for quality, transportation fees and a regional price differential. For natural gas volumes, the average Henry Hub spot price of $2.13 per MMBtu as of December 31, 2024, was adjusted for energy content, transportation fees and a regional price differential. The average adjusted product prices weighted by production over the remaining lives of the proved properties are $77.10 per Bbl of crude oil and $1.62 per Mcf of natural gas as of December 31, 2024.

 (2)

 EON's estimated proved reserves were determined using average first-day-of-the-month prices for the prior 12 months in accordance with SEC guidance. For crude oil volumes, the average WTI posted price of $71.89 per Bbl as of December 31, 2023, was adjusted for quality, transportation fees and a regional price differential. For natural gas volumes, the average Henry Hub spot price of $2.52 per MMBtu as of December 31, 2023, was adjusted for energy content, transportation fees and a regional price differential. The average adjusted product prices weighted by production over the remaining lives of the proved properties are $78.40 per Bbl of crude oil and $2.38 per Mcf of natural gas as of December 31, 2023.

 Reserve engineering is a process of estimating
volumes of economically recoverable crude oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve
estimate is a function of the quality of available data and of engineering and geological interpretation. As a result, the estimates of
different engineers often vary. In addition, the results of drilling, testing, and production may justify revisions of such estimates.
Accordingly, reserve estimates often differ from the quantities of crude oil and natural gas that are ultimately recovered. Estimates
of economically recoverable crude oil and natural gas and of future net revenues are based on a number of variables and assumptions, all
of which may vary from actual results, including geologic interpretation, prices, and future production rates and costs. Please read " Risk
Factors Related to Our Business."

 PUDs

 As of December 31, 2024, EON estimated its PUD
reserves to be 4,215 MBbls of crude oil and 784 MMcf of natural gas for a total of 4,346 MBOE. As of December 31, 2023, EON estimated
its PUD reserves to be 4,137 MBbls of crude oil and 850 MMcf of natural gas for a total of 4,279 MBOE. PUDs will be converted from
undeveloped to developed as the applicable wells begin production.

 The following table summarizes EON's changes
in PUD reserves during the year ended December 31, 2023 (in MBOE):

 Proved
 Undeveloped
 Reserves
 (MBOE)

 Balance, December 31, 2022

 4,730

 Acquisitions of Reserves

 Extensions and Discoveries

 Revisions of Previous Estimates

 (451
)

 Transfers to Estimated Proved Developed

 Balance, December 31, 2023

 4,279

 The following table summarizes EON's changes
in PUD reserves during the year ended December 31, 2024 (in MBOE):

 Proved Undeveloped Reserves (MBOE)

 Balance, December 31, 2023

 4,279

 Acquisitions of Reserves

 Extensions and Discoveries

 Revisions of Previous Estimates

 Transfers to Estimated Proved Developed

 Balance, December 31, 2024

 4,346

 Changes in EON's PUD reserves that occurred
during the year ended December 31, 2024 and 2023 were primarily due to increased operating costs.

 EON has not made any capital expenditures in order
to convert its existing PUDs because EON has been allocating its capital resources to convert PDNP reserves to PDP reserves and not to
convert its PUD reserves to PDNP or PDP reserves.

 EON's PUD reserves at December 31, 2024
and 2023 are based on a development plan instituted by our management. All of such reserves are scheduled to be developed within five
years from the date such locations were initially disclosed as PUD reserves. Our development plan is prepared annually by management and
approved by the Board of Directors. Our PUD reserves only represent reserves that are scheduled, based on such plan, to be developed within
five years from the date such locations were initially disclosed as PUDs. At December 31, 2024, we estimate that our future development
costs relating to the development of PUD reserves are $0 in 2025, $15.7 million in 2026, $46.1 million in 2027 and $32.3 million in 2028.
Under our development plan, our existing PUDs are expected to be converted to PDP reserves by 2028.

 Crude Oil and Natural Gas Production Prices and Costs

 Production and Price History

 The following table sets forth information regarding
net production of crude oil and natural gas and certain price and cost information for each of the periods indicated:

 2024

 2023

 Production data:

 Average realized prices:

 Crude Oil (per Bbl)

 $
 75.52

 $
 72.69

 Natural Gas (per Mcf)

 $
 2.27

 $
 2.48

 NGLs (per Bbl)

 $
 0.00

 $
 0.00

 Total (per BOE) (1)

 $
 67.96

 $
 64.31

 Average cost (per BOE):

 Lease Operating Expenses

 $
 29.59

 $
 24.86

 Production and ad valorem taxes

 $
 5.89

 $
 5.74

 (1)

 "Btu-equivalent" production volumes are presented on an oil-equivalent basis using a conversion factor of six Mcf of natural gas per Bbl of "oil equivalent," which is based on approximate energy equivalency and does not reflect the price or value relationship between crude oil and natural gas.

 Productive Wells

 Productive wells located on our leasehold consist
of producing vertical wells that are capable of producing oil and gas in paying quantities and are not dry wells. As of December 31, 2024,
we owned working interests in 342 producing wells, 207 water injectors, and one water source well, all located on its 13,700 gross acre
leasehold. Only one well owned by the Company is approved to be plugged and abandoned.

 Pogo is not aware of any dry holes drilled on
the acreage underlying its working interest during the relevant periods.

 The following table sets forth the total number
of gross and net productive wells, all of which are oil wells.

 As of December 31, 2024

 Gross

 Net

 Productive

 Dry holes

 —

 —

 Total

 Drilling and other exploration and development
activities

 For the years ended 2024 and 2023, we did not
drill any new wells.

 As of December 31, 2024, there were no wells being
completed or waiting on completion. Furthermore, we were not installing any waterfloods or pressure maintenance systems or engaging in
any other development activity as of such date.

 Acreage and Ownership

 The following figures sets forth information relating
to our acreage for its working interests as of December 31, 2024:

 We own 100% working interests that is subject
to a 26% weighted average net royalty interest across its 13,700 gross acres as of December 31, 2024. For information regarding the impact
of lease expirations on our interests, please see " Risks Related to Our Business." All of our 13,700 acres are held
by production and or not under any mandatory lease expiration.

 Pogo's leasehold is 100% operated through
its wholly owned subsidiary LH Operating and 100% of its 13,700 gross acre leasehold is HBP. The leasehold is comprised of 23 total
leases, 20 BLM and 3 NM State leases. Ninety-seven percent of its leasehold classified as PDP has title opinion coverage. For regulatory
purposes, the current producing reservoirs, 7R, Queen, Grayburg, and San Andres, are considered a single, unitized pool ("pool")
for all current PDP reserves and PDNP reserves. No regulatory approval is required prior to performing workovers on existing wells within
the pool (i.e., perforations, fracking, or acidizing, etc.).

 LH Operating, LLC was created to solely manage
this asset on behalf of Pogo. LH Operating has performed its duties for two (2) years without any known liabilities, and are in good
standing with regulatory agencies. LH Operating is fully bonded to operate in New Mexico.

 Leasehold acreage

 The following table sets forth certain information
regarding the total developed and undeveloped acreage in which we owned an interest as of December 31, 2024.

 Developed Acres

 Undeveloped Acres

 Gross

 Net

 Gross

 Net

 Total

 13,700

 13,700

 —

 —

 All leasehold acreage of Pogo is considered to
be "Developed Acres" because completed producing wells or wells capable of producing in economic quantities are located throughout
the entirety of the acreage such that the acreage allocated to such wells for production on a spacing, allocated, unitized or pooled basis
comprise the entire 13,700 acres leased by Pogo. The interests of Pogo in the oil, gas and other minerals in "Developed Acres"
are, or may be, composed of one or multiple stratigraphic zones producing or capable of producing oil and gas in economic quantities.

 The leasehold of Pogo has undergone development
activities, including drilling, completion, and production operations in the Grayburg/San Andres zones ("legacy zones") and/or
the Seven Rivers waterflood zones. As a result, there are no remaining leasehold portions that require initial development. Pogo has identified
new potential proved undeveloped reserves within the incremental waterflood zone of the Seven Rivers. Pogo intends to develop and produce
the Seven Rivers zone comprised of approximately 1,677 acres underlying a portion of the Developed Acres including, without limitation,
infield drilling or perforation and recompletion of existing wells.

 Regulation

 The following disclosure describes regulations
directly associated with E&P companies who are classified with state and federal regulatory agencies as Operator of record of crude
oil and natural gas properties, including Pogo.

 Crude oil and natural gas operations are subject
to various types of legislation, regulation and other legal requirements enacted by governmental authorities. This legislation and regulation
affecting the crude oil and natural gas industry is under constant review for amendment or expansion. Some of these requirements carry
substantial penalties for failure to comply. The regulatory burden on the crude oil and natural gas industry increases the cost of doing
business.

 Environmental Matters

 Crude oil and natural gas exploration, development
and production operations are subject to stringent laws and regulations governing the discharge of materials into the environment or otherwise
relating to protection of the environment or occupational health and safety. These laws and regulations have the potential to impact production
on the properties in which Pogo owns working interest, which could materially adversely affect its business and its prospects. Numerous
federal, state and local governmental agencies, such as the EPA, issue regulations that often require difficult and costly compliance
measures that carry substantial administrative, civil and criminal penalties and may result in injunctive obligations for non-compliance.
These laws and regulations may require the acquisition of a permit before drilling commences, restrict the types, quantities and concentrations
of various substances that can be released into the environment in connection with drilling and production activities, limit or prohibit
construction or drilling activities on certain lands lying within wilderness, wetlands, ecologically sensitive and other protected areas,
require action to prevent or remediate pollution from current or former operations, such as plugging abandoned wells or closing earthen
pits, result in the suspension or revocation of necessary permits, licenses and authorizations, require that additional pollution controls
be installed and impose substantial liabilities for pollution resulting from operations. The strict, joint and several liability nature
of such laws and regulations could impose liability upon the Operator of record regardless of fault. Moreover, it is not uncommon for
neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release
of hazardous substances, hydrocarbons or other waste products into the environment. Changes in environmental laws and regulations occur
frequently, and any changes that result in more stringent and costly pollution control or waste handling, storage, transport, disposal
or cleanup requirements could materially adversely affect our business and prospects.

 Non-Hazardous and Hazardous Waste

 The Resource Conservation and Recovery Act ("RCRA"),
and comparable state statutes and regulations promulgated thereunder, affect crude oil and natural gas exploration, development, and production
activities by imposing requirements regarding the generation, transportation, treatment, storage, disposal and cleanup of hazardous and
non-hazardous wastes. With federal approval, the individual states administer some or all of the provisions of RCRA, sometimes in
conjunction with their own, more stringent requirements. Administrative, civil and criminal penalties can be imposed for failure to comply
with waste handling requirements. Although most wastes associated with the exploration, development and production of crude oil and natural
gas are exempt from regulation as hazardous wastes under RCRA, these wastes typically constitute nonhazardous solid wastes that are subject
to less stringent requirements. From time to time, the EPA and state regulatory agencies have considered the adoption of stricter disposal
standards for nonhazardous wastes, including crude oil and natural gas wastes. Moreover, it is possible that some wastes generated in
connection with exploration and production of oil and gas that are currently classified as nonhazardous may, in the future, be designated
as "hazardous wastes," resulting in the wastes being subject to more rigorous and costly management and disposal requirements.
On May 4, 2016, a coalition of environmental groups filed a lawsuit against EPA in the U.S. District Court for the District
of Columbia for failing to update its RCRA Subtitle D criteria regulations governing the disposal of certain crude oil and natural gas
drilling wastes. In December 2016, EPA and the environmental groups entered into a consent decree to address EPA's alleged
failure. In response to the consent decree, in April 2019, the EPA signed a determination that revision of the regulations is not
necessary at this time. However, any changes in the laws and regulations could have a material adverse effect on the Operator of record
(Pogo) of its properties' capital expenditures and operating expenses, which in turn could affect production from the acreage underlying
our working interests and adversely affect our business and prospects.

 Remediation

 The Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA") and analogous state laws generally impose strict, joint and several liability, without regard
to fault or legality of the original conduct, on classes of persons who are considered to be responsible for the release of a "hazardous
substance" into the environment. These persons include the current owner or operator of a contaminated facility, a former owner
or operator of the facility at the time of contamination, and those persons that disposed or arranged for the disposal of the hazardous
substance at the facility. Under CERCLA and comparable state statutes, persons deemed "responsible parties" may be subject
to strict, joint and several liability for the costs of removing or remediating previously disposed wastes (including wastes disposed
of or released by prior owners or operators) or property contamination (including groundwater contamination), for damages to natural resources
and for the costs of certain health studies. In addition, it is not uncommon for neighboring landowners and other third parties to file
claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. In addition,
the risk of accidental spills or releases could expose Pogo's working interests underlying its leasehold acreage to significant
liabilities that could have a material adverse effect on the operators' businesses, financial condition and results of operations.
Liability for any contamination under these laws could require us to make significant expenditures to investigate and remediate such contamination
or attain and maintain compliance with such laws and may otherwise have a material adverse effect on their results of operations, competitive
position or financial condition.

 Water Discharges

 The Clean Water Act ("CWA"), the SDWA,
the Oil Pollution Act of 1990 ("OPA"), and analogous state laws and regulations promulgated thereunder impose restrictions
and strict controls regarding the unauthorized discharge of pollutants, including produced waters and other crude oil and natural gas
wastes, into regulated waters. The definition of regulated waters has been the subject of significant controversy in recent years.
The EPA and U.S. Army Corps of Engineers published a revised definition on January 18, 2023, which has been challenged in court.
To the extent any future rule expands the scope of jurisdiction, it may impose greater compliance costs or operational requirements on
Pogo.as the Operator of record. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of
a permit issued by the EPA or the state. The CWA and regulations implemented thereunder also prohibit the discharge of dredge and fill
material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. In addition, spill
prevention, control and countermeasure plan requirements under federal law require appropriate containment berms and similar structures
to help prevent the contamination of navigable waters in the event of a petroleum hydrocarbon tank spill, rupture or leak. Production
EPA has also adopted regulations requiring certain crude oil and natural gas facilities to obtain individual permits or coverage under
general permits for storm water discharges, and in June 2016, the EPA finalized effluent limitation guidelines for the discharge
of wastewater from hydraulic fracturing.

 The OPA is the primary federal law for crude oil
spill liability. The OPA contains numerous requirements relating to the prevention of and response to petroleum releases into regulated
waters, including the requirement that operators of offshore facilities and certain onshore facilities near or crossing waterways must
develop and maintain facility response contingency plans and maintain certain significant levels of financial assurance to cover potential
environmental cleanup and restoration costs. The OPA subject's owners of facilities to strict, joint and several liability for all
containment and cleanup costs and certain other damages arising from a release, including, but not limited to, the costs of responding
to a release of crude oil into surface waters.

 Noncompliance with the CWA, the SDWA, or the OPA
may result in substantial administrative, civil and criminal penalties, as well as injunctive obligations, for the Operator of record
(Pogo) underlying its leasehold working interest.

 Air Emissions

 The CAA, and comparable state laws and regulations,
regulate emissions of various air pollutants through the issuance of permits and the imposition of other requirements. The EPA has developed,
and continues to develop, stringent regulations governing emissions of air pollutants at specified sources. New facilities may be required
to obtain permits before work can begin, and existing facilities may be required to obtain additional permits and incur capital costs
in order to remain in compliance. For example, in June 2016, the EPA established criteria for aggregating multiple small surface
sites into a single source for air quality permitting purposes, which could cause small facilities, on an aggregate basis, to be deemed
a major source subject to more stringent air permitting processes and requirements. These laws and regulations may increase the costs
of compliance for crude oil and natural gas producers and impact production of the acreage underlying Pogo's working interests.
In addition, federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with
air permits or other requirements of the federal CAA and associated state laws and regulations. Moreover, obtaining or renewing permits
has the potential to delay the development of crude oil and natural gas projects.

 Climate Change

 Climate change continues to attract considerable
public and scientific attention. As a result, numerous proposals have been made and are likely to continue to be made at the international,
national, regional and state levels of government to monitor and limit emissions of carbon dioxide, methane and other GHGs. These efforts
have included consideration of cap-and-trade programs, carbon taxes, GHG reporting and tracking programs and regulations that directly
limit GHG emissions from certain sources.

 In the United States, no comprehensive climate
change legislation has been implemented at the federal level. However, President Biden has highlighted addressing climate change as a
priority of his administration and has issued several executive orders addressing climate change. Moreover, following the U.S. Supreme
Court finding that GHG emissions constitute a pollutant under the CAA, the EPA has adopted regulations that, among other things, establish
construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting
of GHG emissions from certain petroleum and natural gas system sources in the United States, and together with the DOT, implementing
GHG emissions limits on vehicles manufactured for operation in the United States. The regulation of methane from oil and gas facilities
has been subject to uncertainty in recent years. In September 2020, the Trump Administration revised regulations initially promulgated
in June 2016 to rescind certain methane standards and remove the transmission and storage segments from the source category for certain
regulations. However, subsequently, the U.S. Congress approved, and President Biden signed into law, a resolution under the Congressional
Review Act to repeal the September 2020 revisions to the methane standards, effectively reinstating the prior standards. Additionally,
in November 2021, the EPA issued a proposed rule that, if finalized, would establish new source and first-time existing source
standards of performance for methane and volatile organic compound emissions for oil and gas facilities. Operators of affected facilities
will have to comply with specific standards of performance to include leak detection using optical gas imaging and subsequent repair requirement,
and reduction of emissions by 95% through capture and control systems. The EPA issued supplemental rules regarding methane emissions on
December 6, 2022. The IRA established the Methane Emissions Reduction Program, which imposes a charge on methane emissions from certain
petroleum and natural gas facilities, which may apply to our operations in the future and may require us to expend material sums. We cannot
predict the scope of any final methane regulatory requirements or the cost to comply with such requirements. However, given the long-term trend
toward increasing regulation, future federal GHG regulations of the oil and gas industry remain a significant possibility.

 Separately, various states and groups of states
have adopted or are considering adopting legislation, regulation or other regulatory initiatives that are focused on such areas as GHG
cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions. For example, New Mexico has adopted
regulations to restrict the venting or flaring of methane from both upstream and midstream operations. At the international level, the
United Nations-sponsored "Paris Agreement" requires member states to submit non-binding, individually-determined reduction
goals known as Nationally Determined Contributions every five years after 2020. President Biden has recommitted the United States
to the Paris Agreement and, in April 2021, announced a goal of reducing the United States' emissions by 50-52% below
2005 levels by 2030. Additionally, at COP26 in Glasgow in November 2021, the United States and the European Union jointly announced
the launch of a Global Methane Pledge, an initiative committing to a collective goal of reducing global methane emissions by at least
30 percent from 2020 levels by 2030, including "all feasible reductions" in the energy sector. The full impact of these
actions cannot be predicted at this time.

 Governmental, scientific, and public concern over
the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States, including
climate change related pledges made by certain candidates now in public office.

 There are also increasing financial risks for
fossil fuel producers as shareholders currently invested in fossil-fuel energy companies may elect in the future to shift some or
all of their investments into non-fossil fuel related sectors. Institutional lenders who provide financing to fossil fuel energy
companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding for fossil
fuel energy companies. For example, at COP26, GFANZ announced that commitments from over 450 firms across 45 countries had resulted in
over $130 trillion in capital committed to net zero goals. The various sub-alliances of GFANZ generally require participants
to set short-term, sector-specific targets to transition their financing, investing, and/or underwriting activities to net zero emissions
by 2050. There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding
provided to the fossil fuel sector. In late 2021, the Federal Reserve announced that it had joined the Network for Greening the Financial
System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector. Subsequently, in
November 2021, the Federal Reserve issued a statement in support of the efforts of the Network for Greening the Financial System
to identify key issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory
authorities. Limitation of investments in and financing for fossil fuel energy companies could result in the restriction, delay or cancellation
of drilling programs or development or production activities. Additionally, the SEC announced its intention to promulgate rules requiring
climate disclosures. Although the form and substance of these requirements is not yet known, this may result in additional costs to comply
with any such disclosure requirements.

 The adoption and implementation of new or more
stringent international, federal or state legislation, regulations or other regulatory initiatives that impose more stringent standards
for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this sector may produce oil and natural
gas or generate the GHG emissions could result in increased costs of compliance or costs of consuming, and thereby reduce demand for oil
and natural gas, which could reduce the profitability of Pogo's working interests. Additionally, political, litigation and financial
risks may result in Pogo restricting or cancelling production activities, incurring liability for infrastructure damages as a result of
climatic changes, or impairing their ability to continue to operate in an economic manner, which also could reduce the profitability of
Pogo's working interests. One or more of these developments could have a material adverse effect on Pogo's business, financial
condition and results of operation.

 Climate change may also result in various physical
risks, such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns,
that could adversely impact our operations and Pogo's supply chains. Such physical risks may result in damage to Pogo's facilities
or otherwise adversely impact our operations, such as if they become subject to water use curtailments in response to drought, or demand
for their products, such as to the extent warmer winters reduce the demand for energy for heating purposes. Extreme weather conditions
can interfere with production and increase costs and damage resulting from extreme weather may not be fully insured. However, at this
time, Pogo is unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting its business.

 Regulation of Hydraulic Fracturing

 Hydraulic fracturing is an important and common
practice that is used to stimulate production of hydrocarbons from tight formations. The process involves the injection of water, sand
and chemicals under pressure into formations to fracture the surrounding rock and stimulate production. Hydraulic fracturing operations
have historically been overseen by state regulators as part of their crude oil and natural gas regulatory programs.

 However, several agencies have asserted regulatory
authority over certain aspects of the process. For example, in August 2012, the EPA finalized regulations under the federal CAA that
establish new air emission controls for crude oil and natural gas production and natural gas processing operations. Federal regulation
of methane emissions from the oil and gas sector has been subject to substantial controversy in recent years.

 In addition, governments have studied the environmental
aspects of hydraulic fracturing practices. These studies, depending on their degree of pursuit and whether any meaningful results are
obtained, could spur initiatives to further regulate hydraulic fracturing under the SDWA or other regulatory authorities. For example,
in December 2016, the EPA issued its final report on a study it had conducted over several years regarding the effects of hydraulic
fracturing on drinking water sources. The final report, concluded that "water cycle" activities associated with hydraulic
fracturing may impact drinking water under certain limited circumstances.

 Several states have adopted, or are considering
adopting, regulations that could restrict or prohibit hydraulic fracturing in certain circumstances and/or require the disclosure of the
composition of hydraulic fracturing fluids. For example, the Railroad Commission of Texas has previously issued a "well integrity
rule," which updates the requirements for drilling, putting pipe down, and cementing wells. The rule also includes new testing and
reporting requirements, such as: (i) the requirement to submit cementing reports after well completion or after cessation of drilling,
whichever is later; and (ii) the imposition of additional testing on wells less than 1,000 feet below usable groundwater. The well
integrity rule took effect in January 2014. Local governments also may seek to adopt ordinances within their jurisdictions regulating
the time, place and manner of drilling activities in general or hydraulic fracturing activities in particular or prohibit the performance
of well drilling in general or hydraulic fracturing in particular.

 State and federal regulatory agencies recently
have focused on a possible connection between the hydraulic fracturing related activities, particularly the disposal of produced water
in underground injection wells, and the increased occurrence of seismic activity. When caused by human activity, such events are called
induced seismicity. In some instances, operators of injection wells in the vicinity of seismic events have been ordered to reduce injection
volumes or suspend operations. Some state regulatory agencies, including those in Colorado, Ohio, Oklahoma and Texas, have modified their
regulations to account for induced seismicity. For example, in October 2014, the Railroad Commission published a new rule governing
permitting or re-permitting of disposal wells that would require, among other things, the submission of information on seismic events
occurring within a specified radius of the disposal well location, as well as logs, geologic cross sections and structure maps relating
to the disposal area in question. If the permittee or an applicant of a disposal well permit fails to demonstrate that the produced water
or other fluids are confined to the disposal zone or if scientific data indicates such a disposal well is likely to be or determined to
be contributing to seismic activity, then the agency may deny, modify, suspend or terminate the permit application or existing operating
permit for that well. The Railroad Commission of Texas has used this authority to deny permits for waste disposal wells. In some instances,
regulators may also order that disposal wells be shut in. In late 2021, the Railroad Commission of Texas issued a notice to operators
of disposal wells in the Midland area, to reduce saltwater disposal well actions and provide certain data to the commission. Separately,
in November 2021, New Mexico implemented protocols requiring operators to take various actions within a specified proximity of certain
seismic activity, including a requirement to limit injection rates if a seismic event is of a certain magnitude. As a result of these
developments, Pogo as the Operator of record may be required to curtail operations or adjust development plans, which may adversely impact
Pogo's business.

 The USGS has identified six states with the most
significant hazards from induced seismicity, including New Mexico, Oklahoma and Texas. In addition, a number of lawsuits have been filed,
most recently in Oklahoma, alleging that disposal well operations have caused damage to neighboring properties or otherwise violated state
and federal rules regulating waste disposal. These developments could result in additional regulation and restrictions on the use of injection
wells and hydraulic fracturing. Such regulations and restrictions could cause delays and impose additional costs and restrictions on Pogo's
properties and on their waste disposal activities.

 If new laws or regulations that significantly
restrict hydraulic fracturing and related activities are adopted, such laws could make it more difficult or costly to perform fracturing
to stimulate production from tight formations. In addition, if hydraulic fracturing is further regulated at the federal or state level,
fracturing activities could become subject to additional permitting and financial assurance requirements, more stringent construction
specifications, increased monitoring, reporting and recordkeeping obligations, plugging and abandonment requirements and also to attendant
permitting delays and potential increases in costs. Such legislative changes could cause Pogo to incur substantial compliance costs, and
compliance or the consequences of any failure to comply could have a material adverse effect on Pogo's financial condition and results
of operations. At this time, it is not possible to estimate the impact on Pogo's business of newly enacted or potential federal
or state legislation governing hydraulic fracturing.

 Endangered Species Act

 The ESA restricts activities that may affect endangered
and threatened species or their habitats. The designation of previously unidentified endangered or threatened species could cause E&P
operators to incur additional costs or become subject to operating delays, restrictions or bans in the affected areas. Recently, there
have been renewed calls to review protections currently in place for the dunes sagebrush lizard, whose habitat includes parts of the Permian
Basin, and to reconsider listing the species under the ESA. For example, in October 2019 environmental groups filed a lawsuit
against the FWS seeking to compel the agency to list the species under the ESA, and in July 2020, FWS agreed to initiate a 12-month review
to determine whether listing the species was warranted, which determination remains outstanding. Additionally, in June 2021, the
FWS proposed to list two distinct population sections of the Lesser Prairie Chicken, including one in portions of the Permian Basin, under
the ESA, which was finalized on November 25, 2022. To the extent species are listed under the ESA or similar state laws, or
previously unprotected species are designated as threatened or endangered in areas where Pogo's properties are located, operations
on those properties could incur increased costs arising from species protection measures and face delays or limitations with respect to
production activities thereon.

 Employee Health and Safety

 Operations on Pogo's properties are subject
to a number of federal and state laws and regulations, including the federal Occupational Safety and Health Act ("OSHA") and
comparable state statutes, whose purpose is to protect the health and safety of workers. In addition, the OSHA hazard communication standard,
the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act, and
comparable state statutes require that information be maintained concerning hazardous materials used or produced in operations and that
this information be provided to employees, state and local government authorities and citizens.

 Other Regulation of the Crude Oil and Natural
Gas Industry

 The crude oil and natural gas industry is extensively
regulated by numerous federal, state and local authorities. Legislation affecting the crude oil and natural gas industry is under constant
review for amendment or expansion, frequently increasing the regulatory burden. Also, numerous departments and agencies, both federal
and state, are authorized by statute to issue rules and regulations that are binding on the crude oil and natural gas industry and its
individual members, some of which carry substantial penalties for failure to comply. Although the regulatory burden on the crude oil and
natural gas industry increases the cost of doing business, these burdens generally do not affect us any differently or to any greater
or lesser extent than they affect other companies in the industry with similar types, quantities and locations of production.

 The availability, terms and conditions and cost
of transportation significantly affect sales of crude oil and natural gas. The interstate transportation of crude oil and natural gas
and the sale for resale of natural gas is subject to federal regulation, including regulation of the terms, conditions and rates for interstate
transportation, storage and various other matters, primarily by the Federal Energy Regulatory Commission ("FERC"). Federal
and state regulations govern the price and terms for access to crude oil and natural gas pipeline transportation. FERC's regulations
for interstate crude oil and natural gas transmission in some circumstances may also affect the intrastate transportation of crude oil
and natural gas.

 Pogo cannot predict whether new legislation to
regulate crude oil and natural gas might be proposed, what proposals, if any, might actually be enacted by the U.S. Congress or the
various state legislatures, and what effect, if any, the proposals might have on its operations. Sales of crude oil and condensate are
not currently regulated and are made at market prices.

 Drilling and Production

 The operations on Pogo's properties are
subject to various types of regulation at the federal, state and local level. These types of regulation include requiring permits for
the drilling of wells, drilling bonds and reports concerning operations. The state, and some counties and municipalities, in which Pogo
operates also regulate one or more of the following:

 the location of wells;

 the method of drilling and casing wells;

 the timing of construction or drilling activities, including seasonal wildlife closures;

 the rates of production or "allowables";

 the surface use and restoration of properties upon which wells are drilled;

 the plugging and abandoning of wells;

 and notice to, and consultation with, surface owners and other third parties.

 State laws regulate the size and shape of drilling
and spacing units or proration units governing the pooling of crude oil and natural gas properties. Some states allow forced pooling or
integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced
pooling or unitization may be implemented by third parties and may reduce Pogo's interest in the unitized properties. In addition,
state conservation laws establish maximum rates of production from crude oil and natural gas wells, generally prohibit the venting or
flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount
of crude oil and natural gas that the Pogo's properties can produce from Pogo's wells or limit the number of wells or the
locations at which can be drill. Moreover, each state generally imposes a production or severance tax with respect to the production and
sale of crude oil and natural gas within its jurisdiction. States do not regulate wellhead prices or engage in other similar direct regulation,
but Pogo cannot assure you that they will not do so in the future. The effect of such future regulations may be to limit the amounts of
crude oil and natural gas that may be produced from our wells, negatively affect the economics of production from these wells or to limit
the number of locations operators can drill.

 Federal, state and local regulations provide detailed
requirements for the abandonment of wells, closure or decommissioning of production facilities and pipelines and for site restoration
in areas where Pogo operates. The U.S. Army Corps of Engineers and many other state and local authorities also have regulations for
plugging and abandonment, decommissioning and site restoration. Although the U.S. Army Corps of Engineers does not require bonds
or other financial assurances, some state agencies and municipalities do have such requirements.

 Natural Gas Sales and Transportation

 FERC has jurisdiction over the transportation
and sale for resale of natural gas in interstate commerce by natural gas companies under the Natural Gas Act of 1938 ("NGA")
and the Natural Gas Policy Act of 1978. Since 1978, various federal laws have been enacted which have resulted in the complete
removal of all price and non-price controls for sales of domestic natural gas sold in "first sales."

 Under the Energy Policy Act of 2005,
FERC has substantial enforcement authority to prohibit the manipulation of natural gas markets and enforce its rules and orders, including
the ability to assess substantial civil penalties. FERC also regulates interstate natural gas transportation rates and service conditions
and establishes the terms under which Pogo's properties may use interstate natural gas pipeline capacity, as well as the revenues
received for release of natural gas pipeline capacity. Interstate pipeline companies are required to provide nondiscriminatory transportation
services to producers, marketers and other shippers, regardless of whether such shippers are affiliated with an interstate pipeline company.
FERC's initiatives have led to the development of a competitive, open access market for natural gas purchases and sales that permits
all purchasers of natural gas to buy gas directly from third-party sellers other than pipelines.

 Gathering service, which occurs upstream of jurisdictional
transmission services, is regulated by the states onshore and in state waters. Section 1(b) of the NGA exempts natural gas gathering
facilities from regulation by FERC under the NGA. FERC has in the past reclassified certain jurisdictional transmission facilities
as non-jurisdictional gathering facilities, which may increase the operators' costs of transporting gas to point-of-sale locations.
This may, in turn, affect the costs of marketing natural gas that Pogo's properties produce.

 Historically, the natural gas industry was more
heavily regulated; therefore, we cannot guarantee that the regulatory approach currently pursued by FERC and the U.S. Congress will
continue indefinitely into the future nor can we determine what effect, if any, future regulatory changes might have on its natural gas
related activities.

 Crude Oil Sales and Transportation

 Crude oil sales are affected by the availability,
terms and cost of transportation. The transportation of crude oil in common carrier pipelines is also subject to rate regulation. FERC
regulates interstate crude oil pipeline transportation rates under the Interstate Commerce Act and intrastate crude oil pipeline transportation
rates are subject to regulation by state regulatory commissions. The basis for intrastate crude oil pipeline regulation, and the degree
of regulatory oversight and scrutiny given to intrastate crude oil pipeline rates, varies from state to state. Insofar as effective interstate
and intrastate rates are equally applicable to all comparable shippers, we believe that the regulation of crude oil transportation rates
will not affect its operations in any materially different way than such regulation will affect the operations of its competitors.

 Further, interstate and intrastate common carrier
crude oil pipelines must provide service on a non-discriminatory basis. Under this open access standard, common carriers must offer
service to all similarly situated shippers requesting service on the same terms and under the same rates. When crude oil pipelines operate
at full capacity, access is governed by pro-rationing provisions set forth in the pipelines' published tariffs. Accordingly,
Pogo believes that access to crude oil pipeline transportation services of Pogo's properties will not materially differ from our
competitors' access to crude oil pipeline transportation services.

 State Regulation

 New Mexico regulates the drilling for, and the
production, gathering and sale of, crude oil and natural gas, including imposing severance taxes and requirements for obtaining drilling
permits. New Mexico currently imposes a 3.75% severance tax on the market value of crude oil and natural gas production as well as other
production taxes for conservation, schools, ad valorem, and equipment. Combined, these taxes amount to 8-9% tax on market value of
crude and natural gas production. States also regulate the method of developing new fields, the spacing and operation of wells and the
prevention of waste of crude oil and natural gas resources.

 States may regulate rates of production and may
establish maximum daily production allowables from crude oil and natural gas wells based on market demand or resource conservation, or
both. States do not regulate wellhead prices or engage in other similar direct economic regulation, but Pogo cannot assure you that they
will not do so in the future. Should direct economic regulation or regulation of wellhead prices by the states increase, this could limit
the amount of crude oil and natural gas that may be produced from wells on Pogo's properties and the number of wells or locations
Pogo's properties can drill.

 The petroleum industry is also subject to compliance
with various other federal, state and local regulations and laws. Some of those laws relate to resource conservation and equal employment
opportunity. Pogo does not believe that compliance with these laws will have a material adverse effect on its business.

 Title to Properties

 Prior to completing an acquisition of a target
or working interests, Pogo performs a title review on each tract to be acquired. Pogo's title review is meant to confirm the working
interests owned by a prospective seller, the property's lease status and royalty amount as well as encumbrances or other related
burdens. As a result, title examinations have been obtained on substantially all of Pogo's properties.

 In addition to Pogo's initial title work,
Pogo often will conduct a thorough title examination prior to leasing any new acres, and/or drilling a well. Should any further title
work uncover any further title defects, Pogo will perform curative work with respect to such defects. Pogo generally will not commence
drilling operations on a property until any material title defects on such property have been cured.

 Pogo believes that the title to its assets is
satisfactory in all material respects. Although title to these properties is in some cases subject to encumbrances, such as customary
royalty interest generally retained in connection with the acquisition of crude oil and gas interests, non-participating royalty
interests and other burdens, easements, restrictions or minor encumbrances customary in the crude oil and natural gas industry, Pogo believes
that none of these encumbrances will materially detract from the value of these properties or from its interest in these properties.

 Competition

 The crude oil and natural gas business is highly
competitive; we primarily competes with companies for the acquisition of targets with high percentage of working interests underlying
crude oil and natural gas leases. Many of our competitors not only own and acquire working interests but also explore for and produce
crude oil and natural gas and, in some cases, carry on midstream and refining operations and market petroleum and other products on a
regional, national or worldwide basis. By engaging in such other activities, our competitors may be able to develop or obtain information
that is superior to the information that is available to us. In addition, certain of our competitors may possess financial or other resources
substantially larger than Pogo possesses. Our ability to acquire additional working interests and properties and to discover reserves
in the future will be dependent upon its ability to evaluate and select suitable properties and to consummate transactions in a highly
competitive environment.

 In addition, crude oil and natural gas products
compete with other forms of energy available to customers, primarily based on price. These alternate forms of energy include electricity,
coal, and fuel oils. Changes in the availability or price of crude oil and natural gas or other forms of energy, as well as business conditions,
conservation, legislation, regulations, and the ability to convert to alternate fuels and other forms of energy may affect the demand
for crude oil and natural gas.

 Seasonality of Business

 Weather conditions affect the demand for, and
prices of, natural gas and can also delay drilling activities, disrupting Pour overall business plans. Additionally, Pogo's properties
are located in areas adversely affected by seasonal weather conditions, primarily in the winter and spring. During periods of heavy snow,
ice or rain, Pogo may be unable to move their equipment between locations, thereby reducing its ability to operate Pogo's wells,
reducing the amount of crude oil and natural gas produced from the wells on Pogo's properties during such times. Additionally, extended
drought conditions in the areas in which Pogo's properties are located could impact its ability to source sufficient water or increase
the cost for such water. Furthermore, demand for natural gas is typically higher during the winter, resulting in higher natural gas prices
for Pogo's natural gas production during its first and fourth quarters. Certain natural gas users utilize natural gas storage facilities
and purchase some of their anticipated winter requirements during the summer, which can lessen seasonal demand fluctuations. Seasonal
weather conditions can limit drilling and producing activities and other crude oil and natural gas operations in Pogo's operating
areas. Due to these seasonal fluctuations, our results of operations for individual quarterly periods may not be indicative of the results
that it may realize on an annual basis.

 Employees and Human Working Capital

 We have salaried and regular pay employees in
the field as well as management at our corporate offices. As of December 31, 2024, we employed 7 full-time salaried and regular
pay field individuals under no ongoing employment contracts who provided direct support to Pogo's operations. As of December 31,
2024, we employed 5 full-time salaried employees at our corporate offices, 5 of which have ongoing employment contracts. None of
these employees are covered by collective bargaining agreements.

 Human capital management is critical to our ongoing
business success, which requires investing in our people. Our aim is to create a highly engaged and motivated workforce where employees
are inspired by leadership, engaged in purpose-driven, meaningful work and have opportunities for growth and development. We are an equal
opportunity employer and we are fundamentally committed to creating and maintaining a work environment in which employees are treated
with respect and dignity. All human resources policies, practices and actions related to hiring, promotion, compensation, benefits and
termination are administered in accordance with the principles of equal employment opportunity and other legitimate criteria without regard
to race, color, religion, sex, sexual orientation, gender expression or identity, ethnicity, national origin, ancestry, age, mental or
physical disability, genetic information, any veteran status, any military status or application for military service, or membership in
any other category protected under applicable laws.

 An effective approach to human capital management
requires that we invest in talent, development, culture and employee engagement. We aim to create an environment where our employees are
encouraged to make positive contributions and fulfill their potential.

 Our Board of Directors is also actively involved
in reviewing and approving executive compensation, selections and succession plans so that we have leadership in place with the requisite
skills and experience to deliver results the right way.

 Emerging Growth Company

 We are an "emerging growth company,"
as defined in the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that
are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find
our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.

 In addition, Section 107 of the JOBS Act
also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company"
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to
take advantage of the benefits of this extended transition period. Accordingly, the information we provide to you may be different than
you might get from other public companies in which you hold securities.

 We will remain an emerging growth company until
the earliest of (i) the last day of the fiscal year following the fifth anniversary of the closing of our Initial Public Offering,
or December 31, 2027, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion,
(iii) the last day of the fiscal year in which we are deemed to be a "large accelerated filer" as defined in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our common
stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or
(iv) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.

 Facilities

 We currently maintain our executive offices at
3730 Kirby Drive, Suite 1200, Houston, Texas 77098. We recently leased a space at 10810 Old Katy Rd, Katy, TX 77494 just beyond the Houston
city limits for our engineering and geological center. The cost for the two spaces combined is approximately $3,000 per month. We consider
our current office space adequate for our current operations.

 ITEM 1A. RISK FACTORS

 An investment in our securities involves a
high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in
this Report, before making a decision to invest in our securities. If any of the following events occur, our business, financial condition
and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you
could lose all or part of your investment.

 Risks Related to Our Business

 There is substantial doubt about our ability to continue as a "going
concern."

 As of December 31, 2024, we had $2,971,558 in
cash and a working capital deficit of $31,231,674. Further, we had positive cash flow from operations of $3,700,686 for the year ended
December 31, 2024. These factors raise substantial doubt about our ability to continue as a going concern. Management's plans to
alleviate this substantial doubt include improving profitability through streamlining costs, maintaining active hedge positions for its
proven reserve production, and the issuance of additional shares of Class A Common Stock through the Common Stock Purchase Agreement with
White Lion, which can fund our operations and production growth, and be used to reduce our liabilities. While management believes that
its plans and the overall outlook of the oil and gas industry sufficiently alleviate the factors raising substantial doubt about its ability
to continue as a going concern, there can be no assurance of success.

 Our producing properties are located in
the Permian Basin, making it vulnerable to risks associated with operating in a single geographic area.

 All of our producing properties are currently
geographically concentrated in the Permian Basin. As a result of this concentration, we may be disproportionately exposed to the impact
of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation,
processing or transportation capacity constraints, availability of equipment, facilities, personnel or services market limitations, natural
disasters, adverse weather conditions, plant closures for scheduled maintenance or interruption of the processing or transportation of
crude oil and natural gas. In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic
crude oil and natural gas producing areas such as the Permian Basin, which may cause these conditions to occur with greater frequency
or magnify the effects of these conditions. Due to the concentrated nature of Pogo's portfolio of properties, a number of our properties
could experience any of the same conditions at the same time, resulting in a relatively greater impact on its results of operations than
they might have on other companies that have a more diversified portfolio of properties. Such delays or interruptions could have a material
adverse effect on our financial condition and results of operations.

 As a result of our exclusive focus on the Permian
Basin, it may be less competitive than other companies in bidding to acquire assets that include properties both within and outside of
that basin. Although we are currently focused on the Permian Basin, it may from time to time evaluate and consummate the acquisition of
asset packages that include ancillary properties outside of that basin, which may result in the dilution of its geographic focus.

 Title to the properties in which we have
an interest may be impaired by title defects.

 Pogo is not required to, and under certain circumstances
it may elect not to, incur the expense of retaining lawyers to examine the title to its operating interests. In such cases, we would rely
upon the judgment of oil and gas lease brokers or landmen who perform the fieldwork in examining records in the appropriate governmental
office before acquiring an operating interest. The existence of a material title deficiency can render an interest worthless and can materially
adversely affect our results of operations, financial condition and cash flows. No assurance can be given that Pogo will not suffer a
monetary loss from title defects or title failure. Additionally, undeveloped acreage has a greater risk of title defects than developed
acreage. If there are any title defects in properties in which we holds an interest, it may suffer a financial loss.

 We depends on various services for the development
and production activities on the properties it operates. Substantially all our revenue is derived from these producing properties. A reduction
in the expected number of wells to be developed on Pogo's acreage by or the failure of EON to develop and operate the wells on its
acreage could have an adverse effect on its results of operations and cash flows adequately and efficiently.

 Our assets consist primarily of operating interests.
The failure of the Company to perform operations adequately or efficiently or to act in ways that are not in our best interests could
reduce production and revenues. Additionally, certain investors have requested that operators adopt initiatives to return capital to investors,
which could also reduce the capital available to us for investment in development and production activities. Moreover, should a low commodity
price environment incur, we may also opt to reduce development activity that could further reduce production and revenues.

 If production on our acreage decreases due to
decreased development activities, because of a low commodity price environment, limited availability of development capital, production-related difficulties
or otherwise, our results of operations may be adversely affected. Pogo is not obligated to undertake any development activities other
than those required to maintain their leases on our acreage. In the absence of a specific contractual obligation, any development and
production activities will be subject to their reasonable discretion (subject to certain implied obligations to develop imposed by the
laws of some states). Pogo could determine to develop wells on our acreage than is currently expected. The success and timing of development
activities on our properties, depends on a number of factors that are largely outside of our control, including:

 the capital costs required for development activities on Pogo's acreage, which could be significantly more than anticipated;

 the ability to access capital;

 prevailing commodity prices;

 the availability of suitable equipment, production and transportation infrastructure and qualified operating personnel;

 the availability of storage for hydrocarbons, expertise, operating efficiency and financial resources;

 Pogo's expected return on investment in wells developed on Pogo's acreage as compared to opportunities in other areas;

 the selection of technology;

 the selection of counterparties for the marketing and sale of production;

 and the rate of production of the reserves.

 Pogo may elect not to undertake development activities,
or may undertake these activities in an unanticipated fashion, which may result in significant fluctuations in Pogo's results of
operations and cash flows. Sustained reductions in production by Pogo on Pogo's properties may also adversely affect Pogo's
results of operations and cash flows. Additionally, if Pogo were to experience financial difficulty, Pogo might not be able to pay invoices
to continue its operations, which could have a material adverse impact on Pogo's cash flows.

 Our future success depends on replacing
reserves through acquisitions and the exploration and development activities.

 Producing crude oil and natural gas wells are
characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Our future crude oil
and natural gas reserves and our production thereof and our cash flows are highly dependent on the successful development and exploitation
of our urrent reserves and its ability to successfully acquire additional reserves that are economically recoverable. Moreover, the production
decline rates of our properties may be significantly higher than currently estimated if the wells on its properties do not produce as
expected. We may also not be able to find, acquire or develop additional reserves to replace the current and future production of its
properties at economically acceptable terms. If we are not able to replace or grow its oil and natural gas reserves, its business, financial
condition and results of operations would be adversely affected.

 Our failure to successfully identify, complete
and integrate acquisitions of properties or businesses could materially and adversely affect its growth, results of operations and cash
flows.

 We depend, in part, on acquisitions to grow its
reserves, production and cash flows. Our decision to acquire a property will depend in part on the evaluation of data obtained from production
reports and engineering studies, geophysical and geological analyses and seismic data, and other information, the results of which are
often inconclusive and subject to various interpretations. The successful acquisition of properties requires an assessment of several
factors, including:

 recoverable reserves;

 future crude oil and natural gas prices and their applicable differentials;

 development plans;

 operating costs Pogo's E&P operators would incur to develop and operate the properties;

 and potential environmental and other liabilities that E&P operators may incur.

 The accuracy of these assessments is inherently
uncertain and we may not be able to identify attractive acquisition opportunities. In connection with these assessments, we perform a
review of the subject properties that it believes to be generally consistent with industry practices, given the nature of its interests.
Our review will not reveal all existing or potential problems, nor will it permit it to become sufficiently familiar with the properties
to assess fully their deficiencies and capabilities. Inspections are often not performed on every well, and environmental problems, such
as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified,
the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems. Even if we do identify
attractive acquisition opportunities, it may not be able to complete the acquisition or do so on commercially acceptable terms. Unless
we further develop our existing properties, we will depend on acquisitions to grow our reserves, production and cash flow.

 There is intense competition for acquisition opportunities
in our industry. Competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions. Additionally,
acquisition opportunities vary over time. Our ability to complete acquisitions is dependent upon, among other things, our ability to obtain
debt and equity financing and, in some cases, regulatory approvals. Further, these acquisitions may be in geographic regions in which
Pogo does not currently hold assets, which could result in unforeseen operating difficulties. In addition, if we acquire interests in
new states, it may be subject to additional and unfamiliar legal and regulatory requirements. Compliance with regulatory requirements
may impose substantial additional obligations on Pogo and its management, cause it to expend additional time and resources in compliance
activities and increase its exposure to penalties or fines for non-compliance with such additional legal requirements. Further, the
success of any completed acquisition will depend on Pourability to effectively integrate the acquired business into its existing business.
The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial
and financial resources. In addition, potential future acquisitions may be larger and for purchase prices significantly higher than those
paid for earlier acquisitions.

 No assurance can be given that we will be able
to identify suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully
acquire identified targets. Our failure to achieve consolidation savings, to integrate the acquired assets into its existing operations
successfully or to minimize any unforeseen difficulties could materially and adversely affect its financial condition, results of operations
and cash flows. The inability to effectively manage these acquisitions could reduce Our focus on subsequent acquisitions and current operations,
which, in turn, could negatively impact its growth, results of operations and cash flows.

 We may acquire properties that do not produce
as projected, and it may be unable to determine reserve potential, identify liabilities associated with such properties or obtain protection
from sellers against such liabilities.

 Acquiring crude oil and natural gas properties
requires us to assess reservoir and infrastructure characteristics, including recoverable reserves, development and operating costs and
potential environmental and other liabilities. Such assessments are inexact and inherently uncertain. In connection with the assessments,
we perform a review of the subject properties, but such a review will not necessarily reveal all existing or potential problems. In the
course of due diligence, we may not inspect every well or pipeline. We cannot necessarily observe structural and environmental problems,
such as pipe corrosion, when an inspection is made. We may not be able to obtain contractual indemnities from the seller for liabilities
created prior to its purchase of the property. We may be required to assume the risk of the physical condition of the properties in addition
to the risk that the properties may not perform in accordance with its expectations.

 Any acquisitions that Pogo completes will
be subject to substantial risks.

 Even if we makes acquisitions that we believes
will increase its cash generated from operations, these acquisitions may nevertheless result in a decrease in its cash flows. Any acquisition
involves potential risks, including, among other things:

 the validity of our assumptions about estimated proved reserves, future production, prices, revenues, capital expenditures, the operating expenses and costs to develop the reserves;

 a decrease in our liquidity by using a significant portion of our cash generated from operations or borrowing capacity to finance acquisitions;

 a significant increase in our interest expense or financial leverage if we incur debt to finance acquisitions;

 the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which any indemnity it receives is inadequate;

 mistaken assumptions about the overall cost of equity or debt;

 Our ability to obtain satisfactory title to the assets it acquires;

 an inability to hire, train or retain qualified personnel to manage and operate our growing business and assets;

 and the occurrence of other significant changes, such as impairment of crude oil and natural gas properties, goodwill or other intangible assets, asset devaluation or restructuring charges.

 Our identified development activities are
susceptible to uncertainties that could materially alter the occurrence or timing of our development activities.

 The ability of the Company to perform development
activities depends on a number of uncertainties, including the availability of capital, construction of and limitations on access to infrastructure,
inclement weather, regulatory changes and approvals, crude oil and natural gas prices, costs, development activity results and the availability
of water. Further, any identified potential development activities are in various stages of evaluation, ranging from wells that are ready
to be developed to wells that require substantial additional interpretation. The use of technologies and the study of producing fields
in the same area will not enable we to know conclusively prior to development activities whether crude oil and natural gas will be present
or, if present, whether crude oil and natural gas will be present in sufficient quantities to be economically viable. Even if enough crude
oil or natural gas exist, we may damage the potentially productive hydrocarbon-bearing formation or experience mechanical difficulties
while performing development activities, possibly resulting in a reduction in production from the well or abandonment of the well. If
Pogo performs additional development activities on wells that do not respond or they produce at quantities less than desired these wells
may materially harm our business.

 There is no guarantee that the conclusions we
draw from available data and other wells near the Pogo acreage will be applicable to our development activities. Further, initial production
rates reported by us in the areas in which ours reserves are located may not be indicative of future or long-term production rates.
Additionally, actual production from wells may be less than expected. For example, a number of E&P operators have recently announced
that newer wells drilled close in proximity to already producing wells have produced less oil and gas than forecast. Because of these
uncertainties, Pogo does not know if the potential development activities that have been identified will ever be able to produce crude
oil and natural gas from these or any other potential development activities. As such, the actual development activities of Pogo may materially
differ from those presently identified, which could adversely affect our business, results of operation and cash flows.

 Acquisitions and development of our leases
will require substantial capital, and our company may be unable to obtain needed capital or financing on satisfactory terms or at all.

 The crude oil and natural gas industry is capital
intensive. Pogo made substantial capital expenditures in connection with the acquisition and development of its properties. Our company
may continue to make substantial capital expenditures in connection with the acquisition and development of properties. Our company will
finance capital expenditures primarily with funding from cash generated by operations and borrowings under its revolving credit facility.

 In the future, Pogo may need capital more than
the amounts it retains in its business or borrows under its revolving credit facility. The level of borrowing base available under our
revolving credit facility is largely based on its estimated proved reserves and its lenders' price decks and underwriting standards
in the reserve-based lending space and may be reduced to the extent commodity prices decrease and cause underwriting standards to
tighten or the lending syndication market is not sufficiently liquid to obtain lender commitments to a full borrowing base in an amount
appropriate for our assets. Furthermore, Pogo cannot assure you that it will be able to access other external capital on terms favorable
to it or at all. For example, a significant decline in prices for crude oil and broader economic turmoil may adversely impact our ability
to secure financing in the capital markets on favorable terms. Additionally, our ability to secure financing or access the capital markets
could be adversely affected if financial institutions and institutional lenders elect not to provide funding for fossil fuel energy companies
in connection with the adoption of sustainable lending initiatives or are required to adopt policies that have the effect of reducing
the funding available to the fossil fuel sector. If Pogo is unable to fund its capital requirements, Pogo may be unable to complete acquisitions,
take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on its
results of operation and free cash flow.

 Pogo is also dependent on the availability of
external debt, equity financing sources and operating cash flows to maintain its development program. If those financing sources are not
available on favorable terms or at all, then Pogo expects the development of its properties to be adversely affected. If the development
of our properties is adversely affected, then revenues from our operations may decline. If we issue additional equity securities or securities
convertible into equity securities, existing stockholders will experience dilution and the new equity securities could have rights senior
to those of our Class A Common Stock.

 The widespread outbreak of an illness, pandemic
(like COVID-19) or any other public health crisis may have material adverse effects on our business, financial position, results of operations
and/or cash flows.

 Pogo faces risks related to the outbreak of illnesses,
pandemics and other public health crises that are outside of its control and could significantly disrupt its operations and adversely
affect its financial condition. For example, the COVID-19 pandemic has caused a disruption to the oil and natural gas industry and
to our business. The COVID-19 pandemic negatively impacted the global economy, disrupted global supply chains, reduced global demand
for oil and gas, and created significant volatility and disruption of financial and commodity markets, but has been improving since 2020.

 The degree to which the COVID-19 pandemic
or any other public health crisis adversely impacts our operations, financial results and dividend policy will also depend on future developments,
which are highly uncertain and cannot be predicted. These developments include, but are not limited to, the duration and spread of the
pandemic, its severity, the actions to contain the virus or treat its impact, its impact on the economy and market conditions, and how
quickly and to what extent normal economic and operating conditions can resume. While this matter may disrupt its operations in some way,
the degree of the adverse financial impact cannot be reasonably estimated at this time.

 Pogo currently plans to enter hedging
arrangements with respect to the production of crude oil, and possibly natural gas which is a smaller portion of the reserves. Pogo will
mitigate the exposure to the impact of decreases in the prices by establishing a hedging plan and structure that protects the earnings
to a reasonable level, and the debt service requirements.

 Pogo does currently plan to enter into hedging
arrangements to establish, in advance, a price for the sale of the crude oil and possibly natural gas produced from its properties. The
hedging plan and structure will be at a level to balance the debt service requirements and also allow Pogo to realize the benefit of any
short-term increase in the price of crude oil and natural gas. A portion of the crude oil and natural gas produced from its properties
will not be protected against decreases in the price of crude oil and natural gas, or prolonged periods of low commodity prices. Hedging
arrangements may limit our ability to realize the benefit of rising prices and may result in hedging losses.

 The intent of the hedging arrangements is to mitigate
the volatility in its cash flows due to fluctuations in the price of crude oil and natural gas. However, these hedging activities may
not be as effective as our company intends in reducing the volatility of its cash flows and, if entered into, are subject to the risks
of the terms of the derivative instruments derivative contract, there may be a change in the expected differential between the underlying
commodity price in the derivative instrument and the actual price received, our company's hedging policies and procedures may not
be properly followed and the steps our company takes to monitor its derivative financial instruments may not detect and prevent violations
of its risk management policies and procedures, particularly if deception or other intentional misconduct is involved. Further, our company
may be limited in receiving the full benefit of increases in crude oil as a result of these hedging transactions. The occurrence of any
of these risks could prevent Pogo from realizing the benefit of a derivative contract.

 Our estimated reserves are based on many
assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially
affect the quantities and present value of its reserves.

 It is not possible to measure underground accumulation
of crude oil and natural gas in an exact way. Crude oil and natural gas reserve engineering is not an exact science and requires subjective
estimates of underground accumulations of crude oil and natural gas and assumptions concerning future crude oil and natural gas prices,
production levels, ultimate recoveries and operating and development costs. As a result, estimated quantities of proved reserves, projections
of future production rates and the timing of development expenditures may turn out to be incorrect. Estimates of our proved reserves and
related valuations as of December 31, 2024 and December 31, 2023 were prepared by Cobb. Cobb conducted a detailed review of
all of our properties for the period covered by its reserve report using information provided by Pogo. Over time, Pogo may make material
changes to reserve estimates taking into account the results of actual drilling, testing and production and changes in prices. In addition,
certain assumptions regarding future crude oil and natural gas prices, production levels and operating and development costs may prove
incorrect. For example, due to the deterioration in commodity prices and operator activity in 2020 as a result of the COVID-19 pandemic
and other factors, the commodity price assumptions used to calculate our reserves estimates declined, which in turn lowered its proved
reserve estimates. A substantial portion of our reserve estimates are made without the benefit of a lengthy production history, which
are less reliable than estimates based on a lengthy production history. Any significant variance from these assumptions to actual figures
could greatly affect our estimates of reserves and future cash generated from operations. Numerous changes over time to the assumptions
on which our reserve estimates are based, as described above, often result in the actual quantities of crude oil and natural gas that
are ultimately recovered being different from its reserve estimates.

 Furthermore, the present value of future net cash
flows from our proved reserves is not necessarily the same as the current market value of its estimated reserves. In accordance with rules
established by the SEC and the Financial Accounting Standards Board (the "FASB"), Pogo bases the estimated discounted future
net cash flows from its proved reserves on the twelve-month average oil and gas index prices, calculated as the unweighted arithmetic
average for the first-day-of-the-month price for each month, and costs in effect on the date of the estimate, holding the prices
and costs constant throughout the life of the properties. Actual future prices and costs may differ materially from those used in the
present value estimate, and future net present value estimates using then current prices and costs may be significantly less than the
current estimate. In addition, the 10% discount factor Pogo uses when calculating discounted future net cash flows may not be the most
appropriate discount factor based on interest rates in effect from time to time and risks associated with Pogo or the crude oil and natural
gas industry in general.

 Operating hazards and partially insured
or uninsured risks may result in substantial losses to Pogo and any losses could adversely affect our results of operations and cash flows.

 The operations of Pogo will be subject to all
of the hazards and operating risks associated with drilling for and production of crude oil and natural gas, including the risk of fire,
explosions, blowouts, surface cratering, uncontrollable flows of crude oil and natural gas and formation water, pipe or pipeline failures,
abnormally pressured formations, casing collapses and environmental hazards such as crude oil spills, natural gas leaks and ruptures or
discharges of toxic gases. In addition, their operations will be subject to risks associated with hydraulic fracturing, including any
mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. The occurrence of
any of these events could result in substantial losses to Pogo due to injury or loss of life, severe damage to or destruction of property,
natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigations and
penalties, suspension of operations and repairs required to resume operations.

 Loss of our information and computer systems,
including as a result of cyber-attacks, could materially and adversely affect our business.

 Pogo relies on electronic systems and networks
to control and manage our respective businesses. If any of such programs or systems were to fail for any reason, including as a result
of a cyber-attack, or create erroneous information in our hardware or software network infrastructure, possible consequences could be
significant, including loss of communication links and inability to automatically process commercial transaction or engage in similar
automated or computerized business activities. Although Pogo has multiple layers of security to mitigate risks of cyber-attacks, cyber-attacks on
business have escalated in recent years. Moreover, Pogo is becoming increasingly dependent on digital technologies to conduct certain
exploration, development, production and processing activities, including interpreting seismic data, managing drilling rigs, production
activities and gathering systems, conducting reservoir modeling and estimating reserves. The U.S. government has issued public warnings
that indicate that energy assets might be specific targets of cyber security threats. If Pogo becomes the target of cyber-attacks of
information security breaches, their business operations may be substantially disrupted, which could have an adverse effect on our results
of operations. In addition, our efforts to monitor, mitigate and manage these evolving risks may result in increased capital and operating
costs, and there can be no assurance that such efforts will be sufficient to prevent attacks or breaches from occurring.

 A terrorist attack or armed conflict could
harm our business.

 Terrorist activities, anti-terrorist activities
and other armed conflicts involving the United States or other countries may adversely affect the United States and global economies
and could prevent Pogo from meeting its financial and other obligations. For example, on February 24, 2022, Russia launched a large-scale invasion
of Ukraine that has led to significant armed hostilities. As a result, the United States, the United Kingdom, the member states of
the European Union and other public and private actors have levied severe sanctions on Russia. To date, this conflict has resulted in
a decreased supply of hydrocarbons which has resulted in higher commodity prices. The geopolitical and macroeconomic consequences of this
invasion and associated sanctions cannot be predicted, and such events, or any further hostilities in Ukraine or elsewhere, could severely
impact the world economy. If any of these events occur, the resulting political instability and societal disruption could reduce overall
demand for crude oil and natural gas potentially putting downward pressure on demand for our services and causing a reduction in our revenues.
Crude oil and natural gas related facilities, including those of Pogo, could be direct targets of terrorist attacks, and, if infrastructure
integral to Pogo is destroyed or damaged, they may experience a significant disruption in their operations. Any such disruption could
materially adversely affect our financial condition, results of operations and cash flows. Costs for insurance and other security may
increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

 We believe Pogo currently has ineffective
internal control over its financial reporting.

 A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of our annual or interim consolidated financial statements may not be prevented or detected on a timely basis. We identified a material
weakness and believe that Pogo currently has ineffective internal control over financial reporting, primarily due to: not maintaining
a sufficient complement of personnel to permit segregation of duties among personnel with access to our accounting and information systems
controls, lacking proper review evidence of controls over the reserves report prepared by the reservoir engineer, and lacking the controls
needed to ensure that the accounting for certain items is accurate and complete.

 We intend to remediate these deficiencies by putting
into place proper internal controls and accounting systems to ensure effective internal control over its financial reporting. We plan
to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the
nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced
access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals
with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time,
and we can offer no assurance that these initiatives will ultimately have the intended effects.

 However, completion of remediation does not provide
assurance that our remediation or other controls will continue to operate properly or remain adequate and we cannot assure you that we
will not identify additional material weaknesses in our internal control over financial reporting in the future. If we are unable to maintain
effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial
information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could
be adversely affected. This failure could negatively affect the market price and trading liquidity of our stock, cause investors to lose
confidence in our reported financial information, subject us to civil and criminal investigations and penalties and generally materially
and adversely impact our business and financial condition.

 We are dependent upon our executive officers
and directors and their departure could adversely affect our ability to operate.

 Our operations are dependent upon a relatively
small group of individuals. We believe that our success depends on the continued service of our executive officers and directors. In addition,
our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have
conflicts of interest in allocating management time among various business activities. The unexpected loss of the services of one or more
of our directors or executive officers could have a detrimental effect on us.

 Certain of our executive officers and directors
are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those conducted
by us.

 Our executive officers and directors are, or may
in the future become, affiliated with entities that are engaged in business activities similar to our own.

 Our officers and directors also may become aware
of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or
contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity
should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity
prior to its presentation to us. Our Second A&R Charter provides that we renounce our interest in any corporate opportunity offered
to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or
officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue.

 Our executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

 We have not adopted a policy that expressly prohibits
our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in
any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. We also do not have
a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by
us. Accordingly, such persons or entities may have a conflict between their interests and ours.

 Increased costs of capital could adversely
affect our business.

 Our business and ability to raise capital and
make acquisitions could be harmed by factors such as the availability, terms, and cost of capital, increases in interest rates or a reduction
in our credit rating. Changes in any one or more of these factors could cause our cost of doing business to increase, limit its access
to capital, limit its ability to pursue acquisition opportunities, and place it at a competitive disadvantage. A significant reduction
in the availability of capital could materially and adversely affect our ability to achieve our planned growth and operating results.

 For example, since March 2022, the Federal Reserve
has raised its target range for the federal funds rate multiple times, and additional rate hikes may continue to occur. An increase
in the interest rates associated with our floating rate debt would increase our debt service costs and affect our results of operations
and cash flow available for payments of our debt obligations. In addition, an increase in interest rates could adversely affect our future
ability to obtain financing or materially increase the cost of any additional financing.

 Pogo may be involved in legal proceedings
that could result in substantial liabilities.

 Like many crude oil and natural gas companies,
Pogo may from time to time be involved in various legal and other proceedings, such as title, royalty or contractual disputes, regulatory
compliance matters and personal injury or property damage matters, in the ordinary course of its business. Such legal proceedings are
inherently uncertain and their results cannot be predicted. Regardless of the outcome, such proceedings could have an adverse impact on
Pogo because of legal costs, diversion of management and other personnel and other factors. In addition, it is possible that a resolution
of one or more such proceedings could result in liability, penalties or sanctions, as well as judgments, consent decrees or orders requiring
a change in our business practices, which could materially and adversely affect our business, operating results and financial condition.
Accruals for such liability, penalties or sanctions may be insufficient. Judgments and estimates to determine accruals or range of losses
related to legal and other proceedings could change from one period to the next, and such changes could be material.

 Risks Related to Our Industry

 A substantial majority of our revenues from
crude oil and gas producing activities are derived from its operating properties that are based on the price at which crude oil and natural
gas produced from the acreage underlying its interests are sold. Prices of crude oil and natural gas are volatile due to factors beyond
our control. A substantial or extended decline in commodity prices may adversely affect our business, financial condition, results of
operations and cash flows.

 Our revenues, operating results, discretionary
cash flows, profitability, liquidity and the carrying value of its interests depend significantly upon the prevailing prices for crude
oil and natural gas. Historically, crude oil and natural gas prices and their applicable basis differentials have been volatile and are
subject to fluctuations in response to changes in supply and demand, market uncertainty and a variety of additional factors that are beyond
our control, including:

 the regional, domestic foreign supply of and demand for crude oil and natural gas;

 the level of prices and market expectations about future prices of crude oil and natural gas;

 the level of global crude oil and natural gas E

 the cost of exploring for, developing, producing and delivering crude oil and natural gas;

 the price and quantity of foreign imports and U.S. exports of crude oil and natural gas;

 the level of U.S. domestic production;

 political and economic conditions and events in foreign oil and natural gas producing countries, including embargoes, continued hostilities in the Middle East and other sustained military campaigns, the armed conflict in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America and China and acts of terrorism or sabotage;

 global or national health concerns, including the outbreak of an illness pandemic (like COVID-19), which may reduce demand for crude oil and natural gas due to reduced global or national economic activity;

 the ability of members of OPEC and its allies and other oil exporting nations to agree to and maintain crude oil price and production controls;

 speculative trading in crude oil and natural gas derivative contracts;

 the level of consumer product demand;

 weather conditions and other natural disasters, such as hurricanes and winter storms, the frequency and impact of which could be increased by the effects of climate change;

 technological advances affecting energy consumption, energy storage and energy supply;

 domestic and foreign governmental regulations and taxes;

 the continued threat of terrorism and the impact of military and other action, including U.S. military operations in the Middle East and economic sanctions such as those imposed by the U.S. on oil and gas exports from Iran;

 the proximity, cost, availability and capacity of crude oil and natural gas pipelines and other transportation facilities;

 the impact of energy conservation efforts;

 the price and availability of alternative fuels; and

 overall domestic and global economic conditions.

 These factors and the volatility
of the energy markets make it extremely difficult to predict future oil and natural gas price movements accurately. Lower commodity prices
may reduce our operating margins, cash flow and borrowing ability. If we are unable to obtain needed capital or financing on satisfactory
terms, our ability to develop future reserves or make acquisitions could be adversely affected. Also, using lower prices in estimating
proved reserves may result in a reduction in proved and reserve volumes due to economic limits. In addition, sustained periods with oil
and natural gas prices at levels lower than current West Texas Intermediate ("WTI") and Henry Hub strip prices may adversely
affect our drilling economics, cash flow and our ability to raise capital, which may require us to re-evaluate and postpone or substantially
restrict our development program, and result in the reduction of some of our proved undeveloped reserves and related PV-10.

 Any substantial decline in the price of crude
oil and natural gas, or prolonged period of low commodity prices will materially adversely affect our business, financial condition, results
of operations and cash flows. In addition, lower crude oil and natural gas may reduce the amount of crude oil and natural gas that can
be produced economically, which may reduce our willingness to develop its properties. This may result in Pogo having to make substantial
downward adjustments to our estimated proved reserves, which could negatively impact its ability to fund its operations. If this occurs
or if production estimates change or exploration or development results deteriorate, the successful efforts method of accounting principles
may require Pogo to write down, as a non-cash charge to earnings, the carrying value of its crude oil and natural gas properties.
Pogo could also determine during periods of low commodity prices to shut in or curtail production from wells on our properties. In addition,
we could determine during periods of low commodity prices to plug and abandon marginal wells that otherwise may have been allowed to continue
to produce for a longer period under conditions of higher prices. Specifically, they may abandon any well if they reasonably believe that
the well can no longer produce crude oil or natural gas in commercially paying quantities. Pogo may choose to use various derivative instruments
in connection with anticipated crude oil and natural gas to minimize the impact of commodity price fluctuations. However, we cannot hedge
the entire exposure of our operations from commodity price volatility. To the extent we does not hedge against commodity price volatility,
or its hedges are not effective, our results of operations and financial position may be diminished.

 If commodity prices decrease to a level
such that our future undiscounted cash flows from its properties are less than their carrying value, Pogo may be required to take write-downs
of the carrying values of its properties.

 Accounting rules require that Pogo periodically
review the carrying value of its properties for possible impairment. Based on specific market factors and circumstances at the time of
prospective impairment reviews, production data, economics and other factors, Pogo may be required to write down the carrying value of
its properties. Pogo evaluates the carrying amount of its proved oil and natural gas properties for impairment whenever events or changes
in circumstances indicate that a property's carrying amount may not be recoverable. If the carrying value exceeds the estimated
undiscounted future cash flows Pogo would estimate the fair value of its properties and record an impairment charge for any excess of
the carrying value of the properties over the estimated fair value of the properties. Factors used to estimate fair value may include
estimates of proved reserves, future commodity prices, future production estimates and a commensurate discount rate. The risk that Pogo
will be required to recognize impairments of its crude oil and natural gas properties increases during periods of low commodity prices.
In addition, impairments would occur if Pogo were to experience sufficient downward adjustments to its estimated proved reserves or the
present value of estimated future net revenues. An impairment recognized in one period may not be reversed in a subsequent period. Pogo
may incur impairment charges in the future, which could materially adversely affect its results of operations for the periods in which
such charges are taken.

 The unavailability, high cost or shortages
of rigs, equipment, raw materials, supplies or personnel may restrict or result in increased costs to develop and operate our properties.

 The crude oil and natural gas industry is cyclical,
which can result in shortages of drilling/workover rigs, equipment, raw materials (particularly water and sand and other proppants), supplies
and personnel. When shortages occur, the costs and delivery times of rigs, equipment and supplies increase and demand for, and wage rates
of, qualified drilling/workover rig crews also rise with increases in demand. Pogo cannot predict whether these conditions will exist
in the future and, if so, what their timing and duration will be. In accordance with customary industry practice, Pogo relies on independent
third-party service providers to provide many of the services and equipment necessary to drill new development wells. If Pogo is
unable to secure a sufficient number of drilling/workover rigs at reasonable costs, our financial condition and results of operations
could suffer. Shortages of drilling/workover rigs, equipment, raw materials, supplies, personnel, trucking services, tubulars, hydraulic
fracturing and completion services and production equipment could delay or restrict our development operations, which in turn could have
a material adverse effect on our financial condition, results of operations and cash flows.

 The marketability of crude oil and natural
gas production is dependent upon transportation and processing and refining facilities, which Pogo cannot control. Any limitation in the
availability of those facilities could interfere with our ability to market its production and could harm our business.

 The marketability of our production depends in
part on the availability, proximity and capacity of pipelines, gathering lines, tanker trucks and other transportation methods, and processing
and refining facilities owned by third parties. Pogo does not control these third-party facilities and our access to them may be
limited or denied. Insufficient production from the wells on our acreage or a significant disruption in the availability of third-party transportation
facilities or other production facilities could adversely impact our ability to deliver, to market or produce oil and natural gas and
thereby cause a significant interruption in our operations. If we are unable, for any sustained period, to implement acceptable delivery
or transportation arrangements or encounter production related difficulties, they may be required to shut in or curtail production. In
addition, the amount of crude oil that can be produced and sold is subject to curtailment in certain other circumstances outside of our
control, such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure, physical damage or lack of available
capacity on these systems, tanker truck availability and extreme weather conditions. Also, production from our wells may be insufficient
to support the construction of pipeline facilities, and the shipment of our crude oil and natural gas on third-party pipelines may
be curtailed or delayed if it does not meet the quality specifications of the pipeline owners. The curtailments arising from these and
similar circumstances may last from a few days to several months. In many cases, Pogo is provided only with limited, if any,
notice as to when these circumstances will arise and their duration. Any significant curtailment in gathering system or transportation,
processing or refining-facility capacity, or an inability to obtain favorable terms for delivery of the crude oil and natural gas
produced from our acreage, could reduce our ability to market the production from our properties and have a material adverse effect on
our financial condition, results of operations and cash flows. our access to transportation options and the prices we receives can also
be affected by federal and state regulation — including regulation of crude oil and natural gas production, transportation
and pipeline safety — as well by general economic conditions and changes in supply and demand.

 In addition, the third parties on whom Pogo relies
for transportation services are subject to complex federal, state, tribal and local laws that could adversely affect the cost, manner
or feasibility of conducting our business.

 Drilling for and producing crude oil and
natural gas are high-risk activities with many uncertainties that may materially adversely affect our business, financial condition, results
of operations and cash flows.

 The development drilling activities of our properties
will be subject to many risks. For example, Pogo will not be able to assure you that wells drilled by the E&P operators of its properties
will be productive. Drilling for crude oil and natural gas often involves unprofitable efforts, not only from dry wells but also from
wells that are productive but do not produce sufficient crude oil and natural gas to return a profit at then realized prices after deducting
drilling, operating and other costs. The seismic data and other technologies used do not provide conclusive knowledge prior to drilling
a well that crude oil and natural gas are present or that a well can be produced economically. The costs of exploration, exploitation
and development activities are subject to numerous uncertainties beyond our control and increases in those costs can adversely affect
the economics of a project. Further, our development drilling and producing operations may be curtailed, delayed, canceled or otherwise
negatively impacted as a result of other factors, including:

 unusual or unexpected geological formations;

 loss of drilling fluid circulation;

 title problems;

 facility or equipment malfunctions;

 unexpected operational events;

 shortages or delivery delays of equipment and services;

 compliance with environmental and other governmental requirements; and

 adverse weather conditions, including the recent winter storms in February 2021 that adversely affected operator activity and production volumes in the southern United States, including in the Delaware Basin.

 Any of these risks can cause substantial losses,
including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution, environmental
contamination or loss of wells and other regulatory penalties. In the event that planned operations, including the drilling of development
wells, are delayed or cancelled, or existing wells or development wells have lower than anticipated production due to one or more of the
factors above or for any other reason, our financial condition, results of operations and cash flows may be materially adversely affected.

 Competition in the crude oil and natural
gas industry is intense, which may adversely affect our ability to succeed.

 The crude oil and natural gas industry is intensely
competitive, and our properties compete with other companies that may have greater resources. Many of these companies explore for and
produce crude oil and natural gas, carry on midstream and refining operations, and market petroleum and other products on a regional,
national or worldwide basis. In addition, these companies may have a greater ability to continue exploration activities during periods
of low crude oil and natural gas market prices. our larger competitors may be able to absorb the burden of present and future federal,
state, local and other laws and regulations more easily than we can, which would adversely affect our competitive position. Pogo may have
fewer financial and human resources than many companies in our industry and may be at a disadvantage in bidding producing crude oil and
natural gas properties. Furthermore, the crude oil and natural gas industry has experienced recent consolidation among some operators,
which has resulted in certain instances of combined companies with larger resources. Such combined companies may compete against Pogo
and thus limit our ability to acquire additional properties and add reserves.

 A deterioration in general economic, business,
political or industry conditions would materially adversely affect our results of operations, financial condition and cash flows.

 Concerns over global economic conditions, energy
costs, geopolitical issues, the impacts of the COVID-19 pandemic, inflation, the availability and cost of credit and slow economic
growth in the United States have contributed to economic uncertainty and diminished expectations for the global economy. Additionally,
acts of protest and civil unrest have caused economic and political disruption in the United States. Meanwhile, continued hostilities
in the Middle East, Ukraine and the occurrence or threat of terrorist attacks in the United States or other countries could adversely
affect the economies of the United States and other countries. Concerns about global economic growth have had a significant adverse
impact on global financial markets and commodity prices. An oversupply and decreased demand of crude oil in 2020 led to a severe decline
in worldwide crude oil prices in 2020.

 If the economic climate in the United States
or abroad deteriorates, worldwide demand for petroleum products could further diminish, which could impact the price at which crude oil
and natural gas from our properties are sold, affect the ability of the Company to continue operations and ultimately materially adversely
impact our results of operations, financial condition and cash flows.

 Conservation measures, technological advances
and increasing attention to ESG matters could materially reduce demand for crude oil and natural gas, availability of capital and adversely
affect our results of operations.

 Fuel conservation measures, alternative fuel requirements,
increasing consumer demand for alternatives to crude oil and natural gas, technological advances in fuel economy and energy-generation devices
could reduce demand for crude oil and natural gas. The impact of the changing demand for crude oil and natural gas services and products
may have a material adverse effect on our business, financial condition, results of operations and cash flows. It is also possible that
the concerns about the production and use of fossil fuels will reduce the sources of financing available to Pogo. For example, certain
segments of the investor community have developed negative sentiment towards investing in the oil and gas industry. Recent equity returns
in the sector versus other industry sectors have led to lower oil and gas representation in certain key equity market indices. In addition,
some investors, including investment advisors and certain sovereign wealth, pension funds, university endowments and family foundations,
have stated policies to divest from, or not provide funding to, the oil and gas sector based on their social and environmental considerations.
Furthermore, organizations that provide information to investors on corporate governance and related matters have developed ratings processes
for evaluating companies on their approach to environmental, social and governance ("ESG") matters. Such ratings are used
by some investors and other financial institutions to inform their investment, financing and voting decisions, and unfavorable ESG ratings
may lead to increased negative sentiment toward oil and gas companies from such institutions. Additionally, the SEC proposed rules on
climate change disclosure requirements for public companies which, if adopted as proposed, could result in substantial compliance costs.
Certain other stakeholders have also pressured commercial and investment banks to stop financing oil and gas and related infrastructure
projects. Such developments, including environmental activism and initiatives aimed at limiting climate change and reducing air pollution,
could result in downward pressure on the stock prices of oil and gas companies, and also adversely affect our availability of capital.

 Risks Related to Environmental and Regulatory
Matters

 Crude oil and natural gas operations are
subject to various governmental laws and regulations. Compliance with these laws and regulations can be burdensome and expensive for Pogo,
and failure to comply could result in Pogo incurring significant liabilities, either of which may impact its willingness to develop our
interests.

 Our activities on the properties
in which Pogo holds interests are subject to various federal, state and local governmental regulations that may change from time to time
in response to economic and political conditions. Matters subject to regulation include drilling operations, production and distribution
activities, discharges or releases of pollutants or wastes, plugging and abandonment of wells, maintenance and decommissioning of other
facilities, the spacing of wells, unitization and pooling of properties and taxation. From time to time, regulatory agencies have imposed
price controls and limitations on production by restricting the rate of flow of crude oil and natural gas wells below actual production
capacity to conserve supplies of crude oil and natural gas. Further actions, including actions focused on addressing climate change, may
negatively impact oil and gas operations and favor renewable energy projects in the United States, which may negatively impact the demand
for oil and natural gas.

 In addition, the production, handling, storage
and transportation of crude oil and natural gas, as well as the remediation, emission and disposal of crude oil and natural gas wastes,
by-products thereof and other substances and materials produced or used in connection with crude oil and natural gas operations are
subject to regulation under federal, state and local laws and regulations primarily relating to protection of worker health and safety,
natural resources and the environment. Failure to comply with these laws and regulations may result in the assessment of sanctions on
Pogo, including administrative, civil or criminal penalties, permit revocations, requirements for additional pollution controls and injunctions
limiting or prohibiting some or all of our operations on our properties. Moreover, these laws and regulations have generally imposed increasingly
strict requirements related to water use and disposal, air pollution control, species protection, and waste management, among other matters.

 Laws and regulations governing E&P may also
affect production levels. Pogo must comply with federal and state laws and regulations governing conservation matters, including, but
not limited to:

 provisions related to the unitization or pooling of the crude oil and natural gas properties;

 the establishment of maximum rates of production from wells;

 the spacing of wells;

 the plugging and abandonment of wells; and

 the removal of related production equipment.

 Additionally, federal and state regulatory authorities
may expand or alter applicable pipeline-safety laws and regulations, compliance with which may require increased capital costs for
third-party crude oil and natural gas transporters. These transporters may attempt to pass on such costs to Pogo, which in turn could
affect profitability on the properties in which Pogo owns an interest.

 Pogo must also comply with laws and regulations
prohibiting fraud and market manipulations in energy markets. To the extent our properties are shippers on interstate pipelines, they
must comply with the tariffs of those pipelines and with federal policies related to the use of interstate capacity.

 Pogo may be required to make significant expenditures
to comply with the governmental laws and regulations described above and may be subject to potential fines and penalties if they are found
to have violated these laws and regulations. Pogo believes the trend of more expansive and stricter environmental legislation and regulations
will continue. The laws and regulations that affect Pogo could increase the operating costs of Pogo and delay production and may
ultimately impact our ability and willingness to develop our properties.

 Federal and state legislative and regulatory
initiatives relating to hydraulic fracturing could cause Pogo to incur increased costs, additional operating restrictions or delays and
have fewer potential development locations.

 Pogo engages in hydraulic fracturing. Hydraulic
fracturing is a common practice that is used to stimulate production of hydrocarbons from tight formations, including shales. The process
involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production.
Currently, hydraulic fracturing is generally exempt from regulation under the Underground Injection Control program of the U.S. Safe
Drinking Water Act ("SDWA") and is typically regulated by state oil and gas commissions or similar agencies.

 However, several federal agencies have asserted
regulatory authority over certain aspects of the process. For example, in June 2016, the Environmental Protection Agency (the "EPA")
published an effluent limit guideline final rule prohibiting the discharge of wastewater from onshore unconventional oil and gas extraction
facilities to publicly owned wastewater treatment plants. Also, from time to time, legislation has been introduced, but not enacted, in
the U.S. Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the
hydraulic fracturing process. This or other federal legislation related to hydraulic fracturing may be considered again in the future,
though Pogo cannot predict the extent of any such legislation at this time.

 Moreover, some states and local governments have
adopted, and other governmental entities are considering adopting, regulations that could impose more stringent permitting, disclosure
and well-construction requirements on hydraulic fracturing operations, including states in which our properties are located. For
example, Texas, among others, has adopted regulations that impose new or more stringent permitting, disclosure, disposal and well construction
requirements on hydraulic fracturing operations. States could also elect to prohibit high volume hydraulic fracturing altogether. In addition
to state laws, local land use restrictions, such as city ordinances, may restrict drilling in general and/or hydraulic fracturing in particular.

 Increased regulation and attention given to the
hydraulic fracturing process, including the disposal of produced water gathered from drilling and production activities, could lead to
greater opposition to, and litigation concerning, crude oil and natural gas production activities using hydraulic fracturing techniques
in areas where Pogo owns properties. Additional legislation or regulation could also lead to operational delays or increased operating
costs for Pogo in the production of crude oil and natural gas, including from the development of shale plays, or could make it more difficult
for Pogo to perform hydraulic fracturing. The adoption of any federal, state or local laws or the implementation of regulations regarding
hydraulic fracturing could potentially cause a decrease in our completion of new crude oil and natural gas wells and result in an associated
decrease in the production attributable to our interests, which could have a material adverse effect on our business, financial condition
and results of operations.

 Legislation or regulatory initiatives intended
to address seismic activity could restrict our development and production activities, as well as our ability to dispose of produced water
gathered from such activities, which could have a material adverse effect on our future business, which in turn could have a material
adverse effect on our business.

 State and federal regulatory agencies have recently
focused on a possible connection between hydraulic fracturing related activities, particularly the underground injection of wastewater
into disposal wells, and the increased occurrence of seismic activity, and regulatory agencies at all levels are continuing to study the
possible linkage between oil and gas activity and induced seismicity. For example, in 2015, the United States Geological Study ("USGS")
identified eight states, including New Mexico, Oklahoma and Texas, with areas of increased rates of induced seismicity that could be attributed
to fluid injection or oil and gas extraction.

 In addition, a number of lawsuits have been filed
alleging that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating
waste disposal. In response to these concerns, regulators in some states are seeking to impose additional requirements, including requirements
in the permitting of produced water disposal wells or otherwise to assess the relationship between seismicity and the use of such wells.
For example, the Texas Railroad Commission has previously published a rule governing permitting or re-permitting of disposal wells
that would require, among other things, the submission of information on seismic events occurring within a specified radius of the disposal
well location, as well as logs, geologic cross sections and structure maps relating to the disposal area in question. If the permittee
or an applicant of a disposal well permit fails to demonstrate that the produced water or other fluids are confined to the disposal zone
or if scientific data indicates such a disposal well is likely to be or determined to be contributing to seismic activity, then the agency
may deny, modify, suspend or terminate the permit application or existing operating permit for that well. The Texas Railroad Commission
has used this authority to deny permits for waste disposal wells. In some instances, regulators may also order that disposal wells be
shut in. In late 2021, the Texas Railroad Commission issued a notice to operators of disposal wells in the Midland area to reduce saltwater
disposal well actions and provide certain data to the commission. Separately, in November 2021, New Mexico implemented protocols
requiring operators to take various actions within a specified proximity of certain seismic activity, including a requirement to limit
injection rates if a seismic event is of a certain magnitude. As a result of these developments, Pogo may be required to curtail operations
or adjust development plans, which may adversely impact Pogo's business.

 Pogo will likely dispose of produced water volumes
gathered from their production operations by injecting it into wells pursuant to permits issued by governmental authorities overseeing
such disposal activities. While these permits will be issued pursuant to existing laws and regulations, these legal requirements are subject
to change, which could result in the imposition of more stringent operating constraints or new monitoring and reporting requirements,
owing to, among other things, concerns of the public or governmental authorities regarding such gathering or disposal activities. The
adoption and implementation of any new laws or regulations that restrict Pogo's ability to use hydraulic fracturing or dispose of
produced water gathered from drilling and production activities by limiting volumes, disposal rates, disposal well locations or otherwise,
or requiring them to shut down disposal wells, could have a material adverse effect on Pogo's business, financial condition and
results of operations.

 Restrictions on the ability of to obtain
water may have an adverse effect on our financial condition, results of operations and cash flows.

 Water is an essential component of crude oil and
natural gas production during both the drilling and hydraulic fracturing processes. Over the past several years, parts of the country,
and in particular Texas, have experienced extreme drought conditions. As a result of this severe drought, some local water districts have
begun restricting the use of water subject to their jurisdiction for hydraulic fracturing to protect local water supply. Such conditions
may be exacerbated by climate change. If we are unable to obtain water to use in their operations from local sources, or if we are unable
to effectively utilize flowback water, they may be unable to economically drill for or produce crude oil and natural gas from our properties,
which could have an adverse effect on our financial condition, results of operations and cash flows.

 Our operations are subject to a series of
risks arising from climate change.

 Climate change continues to attract considerable
public and scientific attention. As a result, numerous proposals have been made and are likely to continue to be made at the international,
national, regional and state levels of government to monitor and limit emissions of carbon dioxide, methane and other "greenhouse
gases" ("GHGs"). These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting
and tracking programs and regulations that directly limit GHG emissions from certain sources.

 In the United States,
no comprehensive climate change legislation has been implemented at the federal level. However, following the U.S. Supreme Court
finding that GHG emissions constitute a pollutant under the Clean Air Act (the "CAA"), the EPA has adopted regulations that,
among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require
the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States,
and together with the U.S. Department of Transportation (the "DOT"), implementing GHG emissions limits on vehicles manufactured
for operation in the United States. The regulation of methane from oil and gas facilities has been subject to uncertainty in recent years.
In September 2020, the Trump Administration revised prior regulations to rescind certain methane standards and remove the transmission
and storage segments from the source category for certain regulations. However, subsequently, the U.S. Congress approved, and President
Biden signed into law, a resolution under the Congressional Review Act to repeal the September 2020 revisions to the methane standards,
effectively reinstating the prior standards. Additionally, in November 2021, the EPA issued a proposed rule that, if finalized, would
establish OOOO(b) new source and OOOO(c) first-time existing source standards of performance for methane and volatile organic
compound emissions for oil and gas facilities. Operators of affected facilities will have to comply with specific standards of performance
to include leak detection using optical gas imaging and subsequent repair requirement, and reduction of emissions by 95% through capture
and control systems. The EPA issued supplemental rules regarding methane emissions on December 6, 2022. The IRA established the Methane
Emissions Reduction Program, which imposes a charge on methane emissions from certain petroleum and natural gas facilities, which may
apply to our operations in the future and may require us to expend material sums. We cannot predict the scope of any final methane regulatory
requirements or the cost to comply with such requirements. Given the long-term trend toward increasing regulation, future federal
GHG regulations of the oil and gas industry remain a significant possibility.

 Separately, various states
and groups of states have adopted or are considering adopting legislation, regulation or other regulatory initiatives that are focused
on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions. For example,
New Mexico has adopted regulations to restrict the venting or flaring of methane from both upstream and midstream operations. At the international
level, the United Nations-sponsored "Paris Agreement" requires member states to submit non-binding, individually-determined reduction
goals known as Nationally Determined Contributions every five years after 2020. President Biden recommitted the United States
to the Paris Agreement and, in April 2021, announced a goal of reducing the United States' emissions by 50-52% below
2005 levels by 2030. Additionally, at the 26 th Conference of the Parties to the United Nations Framework Convention on
Climate Change ("COP26") in Glasgow in November 2021, the United States and the European Union jointly announced
the launch of a Global Methane Pledge, an initiative committing to a collective goal of reducing global methane emissions by at least
30% from 2020 levels by 2030, including "all feasible reductions" in the energy sector. However, in January 2025, President
Trump withdrew from the Paris Agreement. The full impact of these actions cannot be predicted at this time.

 Governmental, scientific,
and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States,
including climate change related pledges made by certain candidates now in public office. Litigation risks are also increasing as a number
of entities have sought to bring suit against various oil and natural gas companies in state or federal court, alleging among other things,
that such companies created public nuisances by producing fuels that contributed to climate change or alleging that the companies have
been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately
disclose those impacts.

 There are also increasing
financial risks for fossil fuel producers as shareholders currently invested in fossil-fuel energy companies may elect in the future
to shift some or all of their investments into non-fossil fuel related sectors. Institutional lenders who provide financing to fossil
fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding
for fossil fuel energy companies. For example, at COP26, the Glasgow Financial Alliance for Net Zero ("GFANZ") announced that
commitments from over 450 firms across 45 countries had resulted in over $130 trillion in capital committed to net zero goals. The
various sub-alliances of GFANZ generally require participants to set short-term, sector-specific targets to transition their
financing, investing, and/or underwriting activities to net zero emissions by 2050. There is also a risk that financial institutions will
be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. In late 2020, the Federal
Reserve announced that is has joined the Network for Greening the Financial System, a consortium of financial regulators focused on addressing
climate-related risks in the financial sector. Subsequently, in November 2021, the Federal Reserve issued a statement in support
of the efforts of the Network for Greening the Financial System to identify key issues and potential solutions for the climate-related challenges
most relevant to central banks and supervisory authorities. Limitation of investments in and financing for fossil fuel energy companies
could result in the restriction, delay or cancellation of drilling programs or development or production activities. Additionally, the
SEC announced its intention to promulgate rules requiring climate disclosures. Although the form and substance of these requirements is
not yet known, this may result in additional costs to comply with any such disclosure requirements.

 The adoption and implementation of new or more
stringent international, federal or state legislation, regulations or other regulatory initiatives that impose more stringent standards
for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this sector may produce oil and natural
gas or generate the GHG emissions could result in increased costs of compliance or costs of consuming, and thereby reduce demand for oil
and natural gas, which could reduce the profitability of our interests. Additionally, political, litigation and financial risks may result
in Pogo restricting or cancelling production activities, incurring liability for infrastructure damages as a result of climatic changes,
or impairing their ability to continue to operate in an economic manner, which also could reduce the profitability of its interests. One
or more of these developments could have a material adverse effect on our business, financial condition and results of operation.

 Climate change may also result in various physical
risks, such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns,
that could adversely impact our operations, as well as those of our operators and their supply chains. Such physical risks may result
in damage to operators' facilities or otherwise adversely impact their operations, such as if they become subject to water use curtailments
in response to drought, or demand for their products, such as to the extent warmer winters reduce the demand for energy for heating purposes.

 Increased attention to ESG matters and conservation
measures may adversely impact our business.

 Increasing attention to climate change, societal
expectations on companies to address climate change, investor and societal expectations regarding voluntary ESG disclosures and consumer
demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, and increased
investigations and litigation. Increasing attention to climate change and environmental conservation, for example, may result in demand
shifts for oil and natural gas products and additional governmental investigations and private litigation against Pogo. Additionally,
the SEC proposed rules on climate change disclosure requirements for public companies which, if adopted as proposed, could result in substantial
compliance costs. To the extent that societal pressures or political or other factors are involved, it is possible that such liability
could be imposed without regard to our causation of, or contribution to, the asserted damage, or to other mitigating factors.

 Moreover, while Pogo may create and publish voluntary
disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations
and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including
the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation
given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.

 In addition, organizations that provide information
to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to
ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings and recent
activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment
toward Pogo and its industry and to the diversion of investment to other industries, which could have a negative impact on our access
to and costs of capital. Also, institutional lenders may decide not to provide funding for fossil fuel energy companies based on climate
change related concerns, which could affect our access to capital for potential growth projects.

 Our results of operations may be materially
impacted by efforts to transition to a lower-carbon economy.

 Concerns over the risk of climate change have
increased the focus by global, regional, national, state and local regulators on GHG emissions, including carbon dioxide emissions, and
on transitioning to a lower-carbon future. A number of countries and states have adopted, or are considering the adoption of, regulatory
frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and trade regimes,
carbon taxes, increased efficiency standards, prohibitions on the sales of new automobiles with internal combustion engines, and incentives
or mandates for battery-powered automobiles and/or wind, solar or other forms of alternative energy. Compliance with changes in laws,
regulations and obligations relating to climate change could result in increased costs of compliance for Pogo or costs of consuming crude
oil and natural gas for such products, and thereby reduce demand, which could reduce the profitability of Pogo. For example, Pogo
may be required to install new emission controls, acquire allowances or pay taxes related to their greenhouse gas emissions, or otherwise
incur costs to administer and manage a GHG emissions program. Additionally, Pogo could incur reputational risk tied to changing customer
or community perceptions of its, customers contribution to, or detraction from, the transition to a lower-carbon economy. These changing
perceptions could lower demand for oil and gas products, resulting in lower prices and lower revenues as consumers avoid carbon-intensive industries,
and could also pressure banks and investment managers to shift investments and reduce lending.

 Separately, banks and other financial institutions,
including investors, may decide to adopt policies that restrict or prohibit investment in, or otherwise funding, Pogo based on climate
change-related concerns, which could affect its or our access to capital for potential growth projects.

 Approaches to climate change and transition to
a lower-carbon economy, including government regulation, company policies, and consumer behavior, are continuously evolving. At this
time, Pogo cannot predict how such approaches may develop or otherwise reasonably or reliably estimate their impact on its or its operators'
financial condition, results of operations and ability to compete. However, any long-term material adverse effect on the oil and
gas industry may adversely affect our financial condition, results of operations and cash flows.

 Additional restrictions on development activities
intended to protect certain species of wildlife may adversely affect our ability to conduct development activities.

 In the United States, the Endangered Species
Act (the "ESA") restricts activities that may affect endangered or threatened species or their habitats. Similar protections
are offered to migratory birds under the Migratory Bird Treaty Act (the "MBTA"). To the extent species that are listed under
the ESA or similar state laws, or are protected under the MBTA, live in the areas where Pogo operates, our ability to conduct or expand
operations could be limited, or Pogo could be forced to incur additional material costs. Moreover, our development drilling activities
may be delayed, restricted or precluded in protected habitat areas or during certain seasons, such as breeding and nesting seasons. For
example, in June 2021, the U.S. Fish & Wildlife Service (the "FWS") proposed to list two distinct population
sections ("DPS") of the Lesser Prairie Chicken, including one in portions of the Permian Basin, under the ESA (the "southern
DPS"). On November 25, 2022, the FWS finalized the proposed rule, listing the southern DPS of the Lesser Prairie-Chicken as
endangered and the northern DPS of the Lesser Prairie-Chicken as threatened.

 Recently, there have also been renewed calls to
review protections currently in place for the dunes sagebrush lizard, whose habitat includes parts of the Permian Basin, and to reconsider
listing the species under the ESA.

 In addition, as a result of one or more settlements
approved by the FWS, the agency was required to make a determination on the listing of numerous other species as endangered or threatened
under the ESA by the end of the FWS' 2017 fiscal year. The FWS did not meet that deadline, but continues to evaluate whether to
take action with respect to those species. The designation of previously unidentified endangered or threatened species could cause our
operations to become subject to operating restrictions or bans, and limit future development activity in affected areas. The FWS and similar
state agencies may designate critical or suitable habitat areas that they believe are necessary for the survival of threatened or endangered
species. Such a designation could materially restrict use of or access to federal, state and private lands.

 Risks Related to Our Financial and Debt Arrangements

 Restrictions in our current and future debt agreements and credit
facilities could limit our growth and our ability to engage in certain activities.

 EON (for purposes of the Loan Agreement, the "Borrower"),
OpCo, SPAC Subsidiary, Pogo, and LH Operating, LLC (for purposes of the Loan Agreement, collectively, the "Guarantors" and
together with the Borrower, the "Loan Parties"), and FIBT entered into a Senior Secured Term Loan Agreement on November 15,
2023 (the "Loan Agreement"), setting forth the terms of a senior secured term loan facility in an aggregate principal amount
of $28 million (the "Term Loan"). On April 18, 2024, the Company and FIBT entered into a Second Amendment to Term Loan Agreement
(the "Amendment") effective as of March 31, 2024. Pursuant to the Amendment, the Term Loan Agreement was modified to provide
that the Company must, on or before December 31, 2024, deposit funds in a Debt Service Reserve Account (as defined in the Loan Agreement)
such that the balance of the account equals $5,000,000 and FIBT waived the provision that such amount had to be deposited within
60 days of the closing date of the Loan Agreement. In addition, the Amendment provides that, if at any time prior to December 31, 2024,
the Company or any of its affiliates enter into a sale leaseback transaction with respect to any of its equipment, the Company will deposit
an amount equal to the greater of (A) $500,000 or (B) 10% of the proceeds of such transaction into the Debt Service Reserve
Account on the effective date of such sale and leaseback transaction.

 The Term Loan contains certain customary representations
and warranties and various covenants and restrictive provisions that limit our ability to, among other things:

 incur or guarantee additional debt;

 enter into certain hedging contracts;

 pay dividends on, or redeem or repurchase, their equity interests, return capital to the holders of their equity interests, or make other distributions to holders of their equity interests;

 amend our organizational documents or certain material contracts;

 make certain investments and acquisitions;

 incur certain liens or permit them to exist;

 enter into certain types of transactions with affiliates;

 merge or consolidate with another company;

 transfer, sell or otherwise dispose of assets;

 enter into certain other lines of business;

 repay or redeem certain debt;

 use the proceeds from the Term Loan for certain purposes;

 allow certain gas imbalances, take-or-pay, or other prepayments;

 A failure to comply with the provisions of the
Term Loan could result in an event of default, which could enable the Lender to declare, subject to the terms and conditions of the Term
Loan, any outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. If the payment
of the debt is accelerated, cash flows from our operations may be insufficient to repay such debt in full. The Term Loan contains events
of default customary for transactions of this nature, including the occurrence of a change of control.

 If we are unable to comply with the restrictions
and covenants in our debt agreements, there could be an event of default under the terms of such agreements, which could result in an
acceleration of repayment.

 If we are unable to comply with the restrictions
and covenants in the Term Loan Agreement, the Seller Note or any future debt agreement or if we default under the terms of the Term Loan
Agreement, the Seller Note or any future debt agreement, there could be an event of default. Our ability to comply with these restrictions
and covenants, including meeting any financial ratios and tests, may be affected by events beyond our control. We cannot assure that we
will be able to comply with these restrictions and covenants or meet such financial ratios and tests. In the event of a default under
the Term Loan Agreement, the Seller Note or any future debt agreement, the lenders could terminate accelerate the loans and declare all
amounts borrowed due and payable. If any of these events occur, our assets might not be sufficient to repay in full all of our outstanding
indebtedness and we may be unable to find alternative financing. Even if we could obtain alternative financing, it might not be on terms
that are favorable or acceptable to us. Additionally, we may not be able to amend the Term Loan Agreement, the Seller Note or any future
debt agreement or obtain needed waivers on satisfactory terms. There can be no assurance that, if needed to avoid noncompliance with our
debt agreements in the future, we will obtain the necessary waivers from the applicable lenders on satisfactory terms or at all. As a
result, there could be an event of default under such agreements, which could result in an acceleration of repayment.

 Our debt levels may limit our flexibility
to obtain additional financing and pursue other business opportunities.

 Our existing and any future indebtedness could
have important consequences to it, including:

 our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may not be available on terms acceptable to it;

 covenants in the Term Loan require, and in any future credit and debt arrangement may require, us to meet financial tests that may affect our flexibility in planning for and reacting to changes in its business, including possible acquisition opportunities;

 our access to the capital markets may be limited;

 our borrowing costs may increase;

 we will use a portion of its discretionary cash flows to make principal and interest payments on its indebtedness, reducing the funds that would otherwise be available for operations, future business opportunities and payment of dividends to its stockholders; and

 our debt level will make us more vulnerable than competitors with less debt to competitive pressures or a downturn in its business or the economy generally.

 Our ability to service our indebtedness will depend
upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and
financial, business, regulatory and other factors, some of which are beyond its control. If our operating results are not sufficient to
service its current or future indebtedness, we will be forced to take actions such as reducing distributions, reducing or delaying business
activities, acquisitions, investments and/or capital expenditures, selling assets, restructuring or refinancing its indebtedness, or seeking
additional equity capital or bankruptcy protection. We may not be able to effect any of these remedies on satisfactory terms or at all.

 Our borrowings under the Term Loan Agreement
expose us to interest rate risk.

 Our results of operations are exposed to interest
rate risk associated with borrowings under the Term Loan Agreement, which bears interest at rates based on the Secured Overnight Financing
Rate ("SOFR") or an alternative floating interest rate benchmark. In response to inflation, the U.S. Federal Reserve increased
interest rates multiple times in 2022 through 2024 and signaled that additional interest rate increases may be expected in 2025. Raising
or lowering of interest rates by the U.S. Federal Reserve generally causes an increase or decrease, respectively, in SOFR and other floating
interest rate benchmarks. As such, if interest rates increase, so will our interest costs. If interest rates continue to increase, it
may have a material adverse effect on our results of operations and financial condition.

 Risks Related to Our Common Stock

 Our stock price is volatile, which could result in substantial
losses to investors and litigation.

 In addition to changes to market prices based
on our results of operations and the factors discussed elsewhere in this " Risk Factors " section, the market price of
and trading volume for our Class A Common Stock may continue to change for a variety of other reasons, not necessarily related to our
actual operating performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance
of particular companies. These broad market fluctuations may adversely affect the trading price of our Class A Common Stock. In addition,
the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility. Factors
that could cause the market price of our Class A Common Stock to fluctuate significantly include:

 the results of operating and financial performance and prospects of other companies in our industry;

 strategic actions by us or our competitors, such as acquisitions or restructurings;

 announcements of innovations, increased service capabilities, new or terminated customers or new, amended or terminated contracts by our competitors;

 the public's reaction to our press releases, other public announcements, and filings with the Securities and Exchange Commission;

 lack of securities analyst coverage or speculation in the press or investment community about us or market opportunities in our industry;

 changes in government policies in the United States;

 changes in earnings estimates or recommendations by securities or research analysts who track our Class A Common Stock or failure of our actual results of operations to meet those expectations;

 market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

 changes in accounting standards, policies, guidance, interpretations or principles;

 any lawsuit involving us, our services or our products;

 arrival and departure of key personnel;

 sales of Class A Common Stock by us, our investors or members of our management team; and

 changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

 Any of these factors, as well as broader market
and industry factors, may result in large and sudden changes in the trading volume of our Class A Common Stock and could seriously harm
the market price of our Class A Common Stock, regardless of our operating performance. This may prevent you from being able to sell your
shares at or above the price you paid for your shares of our Class A Common Stock, if at all. In addition, following periods of volatility
in the market price of a company's securities, stockholders often institute securities class action litigation against that company.
Our involvement in any class action suit or other legal proceeding could divert our senior management's attention and could adversely
affect our business, financial condition, results of operations and prospects.

 The sale or availability for sale of substantial
amounts of our Class A Common Stock could adversely affect the market price of our Class A Common Stock.

 Sales of substantial amounts of shares of our
Class A Common Stock, or the perception that these sales could occur, could adversely affect the market price of our Class A Common Stock
and could impair our future ability to raise capital through common stock offerings.

 We have never paid cash dividends on our
Class A Common Stock and do not anticipate paying any cash dividends on our Class A Common Stock.

 We have never paid cash dividends and do not anticipate
paying any cash dividends on our Class A Common Stock in the foreseeable future. We currently intend to retain any earnings to finance
our operations and growth. As a result, any short-term return on your investment will depend on the market price of our Class A Common
Stock, and only appreciation of the price of our Class A Common Stock, which may never occur, will provide a return to stockholders. The
decision whether to pay dividends will be made by our board of directors in light of conditions then existing, including, but not limited
to, factors such as our financial condition, results of operations, capital requirements, business conditions, and covenants under any
applicable contractual arrangements. Investors seeking cash dividends should not invest in our Class A Common Stock.

 If equity research analysts do not publish
research or reports about our business, or if they issue unfavorable commentary or downgrade our Class A Common Stock, the market price
of our Class A Common Stock will likely decline.

 The trading market for our Class A Common Stock
will rely in part on the research and reports that equity research analysts, over whom we have no control, publish about us and our business.
We may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of
our company, the market price for our Class A Common Stock could decline. In the event we obtain securities or industry analyst coverage,
the market price of our Class A Common Stock could decline if one or more equity analysts downgrade our Class A Common Stock or if those
analysts issue unfavorable commentary, even if it is inaccurate, or cease publishing reports about us or our business.

 The NYSE American may delist our securities
from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional
trading restrictions.

 We have listed our Class A Common Stock and public
warrants on the NYSE American. We cannot assure you that our securities will continue to be listed on the NYSE American in the future.
In order to continue listing our securities on the NYSE American, we must maintain certain financial, distribution and stock price levels.
Generally, we must maintain a minimum amount in stockholders' equity (generally $2,500,000) and a minimum number of holders of our
securities (generally 300 public holders).

 On April 17, 2024, we received a notice from the
NYSE American that we were not in compliance with NYSE American listing standards as a result of our failure to timely file our Annual
Report on Form 10-K for the fiscal year ended December 31, 2023 with the SEC. On May 3, 2024, we filed our Annual Report on Form 10-K
for the fiscal year ended December 31, 2023, and regained compliance with NYSE American rules. Although we believe that the failure to
timely file our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 was primarily as a result of the additional time
needed to account for the Purchase and we expect to file our required subsequent reports in a timely fashion, there can be no assurance
that we will be able to timely file required reports or meet other continued listing requirements in the future. However, in determining
whether to afford a company a cure period prior to commencing suspension or delisting procedures, the NYSE American analyzes all relevant
facts including any past history of late filings, and thus the late filing of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2023 could be used as a factor by the NYSE American in any future decision to delist our securities from trading on its exchange.

 If the NYSE American delists our securities from
trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could
be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 a limited availability of market quotations for our securities;

 reduced liquidity for our securities;

 a determination that our Class A Common Stock is a "penny stock" which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 a limited amount of news and analyst coverage; and

 a decreased ability to issue additional securities or obtain additional financing in the future.

 We may redeem your public warrants prior
to their exercise at a time that is disadvantageous to you, thereby making such warrants worthless.

 We may redeem your public warrants prior to their
exercise at a time that is disadvantageous to you, thereby making such warrants worthless. We have the ability to redeem outstanding public
warrants at any prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the shares of the Class
A Common Stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date
on which a notice of redemption is sent to the warrantholders. Please note that the closing price of our Class A Common Stock has not
exceeded $18.00 per share for any of the 30 trading days prior to the date of this report. We will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the shares of the Class A Common Stock issuable upon exercise
of such warrants is effective and a current prospectus relating to shares of the Class A Common Stock is available throughout the 30-day redemption
period. If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register
or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding public warrants
could force you (i) to exercise your public warrants and pay the exercise price therefor at a time when it may be disadvantageous
for you to do so, (ii) to sell your public warrants s at the then-current market price when you might otherwise wish to hold
your public warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding public warrants are called
for redemption, is likely to be substantially less than the market value of your public warrants.

 The value received upon exercise of the public
warrants (1) may be less than the value the holders would have received if they had exercised their public warrants at a later time
where the underlying share price is higher and (2) may not compensate the holders for the value of the public warrants. The fair
value of the public warrants that may be retained by redeeming shareholders is $0.4 million based on recent trading prices, and 8,625,000
public warrants held by public shareholders.

 We may amend the terms of the public warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public
warrants. As a result, the exercise price of the public warrants could be increased, the exercise period could be shortened and the number
of shares of our Class A Common Stock purchasable upon exercise of a warrant could be decreased, all without a holder's approval.

 Our public warrants were issued in registered
form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder (i) to cure any ambiguity or to correct
any mistake, including to conform the provisions therein to the descriptions of the terms of the warrants, or to cure, correct or supplement
any defective provision, or (ii) to add or change any other provisions with respect to matters or questions arising under the warrant
agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the
interests of the registered holders of the warrants. The warrant agreement requires the approval by the holders of at least 50% of the
then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public
warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of
the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the
exercise period or decrease the number of shares of our Class A Common Stock purchasable upon exercise of a warrant.

 Purchases made pursuant to our ELOC Purchase
Agreement will be made at a discount to the volume weighted average price of Class A Common Stock, which may result in negative pressure
on the stock price following the Closing of the Purchase.

 On October 17, 2022, we entered into a common
stock purchase agreement (the "Common Stock Purchase Agreement") and a related registration rights agreement (the "White
Lion RRA") with White Lion Capital, LLC, a Nevada limited liability company ("White Lion"). Pursuant to the Common Stock
Purchase Agreement, we have the right, but not the obligation to require White Lion to purchase, from time to time, up to $150,000,000
in aggregate gross purchase price of newly issued shares of our Class A Common Stock, subject to certain limitations and conditions set
forth in the Common Stock Purchase Agreement. On March 7, 2024, the Company entered into an Amendment No. 1 to Common Stock Purchase Agreement
(the "White Lion Amendment") with White Lion. Pursuant to the White Lion Amendment, the Company and White Lion agreed to a
fixed number of Commitment Shares equal to 440,000 shares of Common Stock to be issued to White Lion in consideration for commitments
of White Lion under the Common Stock Purchase Agreement, which the Company agreed to include all of the Commitment Shares on the initial
registration statement filed by the Company related to the Common Stock Purchase Agreement.

 We are obligated under the Common Stock Purchase
Agreement and the White Lion RRA to maintain a registration statement with the SEC to register the Class A Common Stock under the Securities
Act of 1933, as amended, for the resale by White Lion of shares of Class A Common Stock that we may issue to White Lion under
the Common Stock Purchase Agreement. The purchase price to be paid by White Lion for any shares of Class A Common Stock will equal 96%
of the lowest daily volume-weighted average price of Class A Common Stock during a period of two consecutive trading days
following the applicable Notice Date.

 Such purchases will dilute our stockholders and
could adversely affect the prevailing market price of our Class A Common Stock and impair our ability to raise capital through future
offerings of equity or equity-linked securities, although we intend to carefully control such purchases as to minimize the impact.
Accordingly, the adverse market and price pressures resulting from the purchase and registration of Class A Common Stock pursuant to the
Common Stock Purchase Agreement may continue for an extended period of time and continued negative pressure on the market price of our
Class A Common Stock could have a material adverse effect on our ability to raise additional equity capital.

 It is not possible to predict the actual
number of shares of Class A Common Stock, if any, we will sell under the ELOC Purchase Agreement with White Lion or the actual gross proceeds
resulting from those sales.

 We generally have the right to control the timing
and amount of any sales of the Class A Common Stock to White under the Common Stock Purchase Agreement. Sales of Class A Common Stock,
if any, to White Lion under the Common Stock Purchase Agreement will depend upon market conditions and other factors to be determined
by us. We may ultimately decide to sell to White Lion all, some or none of the Class A Common Stock that may be available for us to sell
to White Lion pursuant to the Common Stock Purchase Agreement.

 Because the purchase price per share of Class
A Common Stock to be paid by White Lion will fluctuate based on the market prices of the Class A Common Stock at the time we elect to
sell Class A Common Stock to White Lion pursuant to the Common Stock Purchase Agreement, if any, it is not possible for us to predict,
as of the date of this report and prior to any such sales, the number of shares of Class A Common Stock that we will sell to White Lion
under the Common Stock Purchase Agreement, the purchase price per share that White Lion will pay for Class A Common Stock purchased from
us under the Common Stock Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by White Lion
under the Common Stock Purchase Agreement.

 The number of shares of Class A Common Stock
ultimately offered for sale by White Lion is dependent upon the number of shares of Class A Common Stock, if any, we ultimately elect
to sell to White Lion under the Common Stock Purchase Agreement. However, even if we elect to sell Class A Common Stock to White Lion
pursuant to the Common Stock Purchase Agreement, White Lion may resell all, some or none of such shares at any time or from time to time
in its sole discretion and at different prices. To date, the Company has issued 7,000,000 shares of common stock under the Common Stock
Purchase Agreement.

 Because the purchase price per share to be paid
by White Lion for the shares of Class A Common Stock that we may elect to sell to White Lion under the Common Stock Purchase Agreement,
if any, will fluctuate based on the market prices of our common stock for each purchase made pursuant to the Common Stock, if any, it
is not possible for us to predict, as of the date of this report and prior to any such sales, the number of shares of Class A Common
Stock that we will sell to White Lion under the Common Stock Purchase Agreement, the purchase price per share that While Lion will pay
for shares purchased from us under the Common Stock Purchase Agreement, or the aggregate gross proceeds that we will receive from those
purchases by White Lion under the Purchase Agreement, if any.

 The sale and issuance of Class A Common
Stock to White Lion will cause dilution to our existing securityholders, and the resale of the Class A Common Stock acquired by White
Lion, or the perception that such resales may occur, could cause the price of our Class A Common Stock to decrease.

 The purchase price per share of Class A Common
Stock to be paid by White Lion for the Class A Common Stock that we may elect to sell to White Lion under the Common Stock Purchase Agreement,
if any, will fluctuate based on the market prices of our Class A Common Stock at the time we elect to sell Class A Common Stock to White
Lion pursuant to the Common Stock Purchase Agreement. Depending on market liquidity at the time, resales of such Class A Common Stock
by White Lion may cause the trading price of our Class A Common Stock to decrease.

 If and when we elect to sell Class A Common Stock
to White Lion, sales of newly issued Class A Common Stock by us to White Lion could result in substantial dilution to the interests of
existing holders of our Class A Common Stock. Additionally, the sale of a substantial number of Class A Common Stock to White Lion, or
the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at
a time and at a price that we might otherwise wish to effect sales.

 We expect to grant equity awards to employees
and directors under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business
strategy, we may make or receive investments in companies, solutions or technologies and issue equity securities to pay for any such acquisition
or investment. Any such issuances of additional share capital may cause shareholders to experience significant dilution of their ownership
interests and the per share value of our Class A Common Stock to decline. To date, the Company has issued 7,000,000 shares of common
stock under the Common Stock Purchase Agreement

 Investors who buy shares at different times
will likely pay different prices than White Lion under the ELOC Purchase Agreement with them.

 Pursuant to the Common Stock Purchase Agreement,
we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold to White Lion. If and when we
do elect to sell shares of our Class A Common Stock to White Lion pursuant to the Common Stock Purchase Agreement, after White Lion has
acquired such shares, White Lion may resell all, some or none of such shares at any time or from time to time in its discretion and at
different prices. As a result, investors who purchase shares from White Lion in this offering at different times will likely pay different
prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes
in their investment results. Investors may experience a decline in the value of the shares they purchase from White Lion in this offering
as a result of future sales made by us to White Lion at prices lower than the prices such investors paid for their shares in this offering.

 Management will have broad discretion as
to the use of the proceeds from the sale of shares to White Lion, and uses may not improve our financial condition or market value.

 Because we have not designated the amount of net
proceeds from the sale of shares of our Class A Common Stock to be used for any particular purpose, our management will have broad discretion
as to the application of such net proceeds and could use them for purposes other than those contemplated hereby. Our management may use
the net proceeds for corporate purposes that may not improve our financial condition or market value.

 The JOBS Act permits "emerging growth
companies" like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies
that are not emerging growth companies.

 We qualify as an "emerging growth company"
as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions
from various reporting requirements applicable to other public companies that are not emerging growth companies, including (a) the
exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of
the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements
and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result,
our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest
of (a) the last day of the fiscal year of (i) the fifth anniversary of the closing of our Initial Public Offering, or
December 31, 2027, (ii) in which we have total annual gross revenue of at least $1.235 billion (as adjusted for inflation pursuant
to SEC rules from time to time) or (iii) in which we are deemed to be a large accelerated filer, which means the market value of
our Class A Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second
fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior
three year period.

 In addition, Section 107 of the JOBS Act
provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided
in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides
that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies, but any such election to opt out is irrevocable. We have elected to irrevocably opt out of such extended transition period,
which means that when a standard is issued or revised and it has different application dates for public or private companies, we will
adopt the new or revised standard at the time public companies adopt the new or revised standard. This may make comparison of our financial
statements with another emerging growth company that has not opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.

 We cannot predict if investors will find our Class
A Common Stock less attractive because we will rely on these exemptions. If some investors find our Class A Common Stock less attractive
as a result, there may be less active trading market for our Class A Common Stock and our stock price may be more volatile.

 The Second A&R Charter designates state
courts within the State of Delaware as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders,
which could limit stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees
or agents.

 The Second A&R Charter provides that, unless
we consent in writing to the selection of an alternative forum, (a) the Court of Chancery of the State of Delaware shall, to the
fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of
the company, (ii) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any current or former
director, officer, employee or agent of the company to us or our stockholders, or a claim of aiding and abetting any such breach of fiduciary
duty, (iii) any action asserting a claim against us or any of our directors, officers, employees or agents arising pursuant to any
provision of the DGCL, the Second A&R Charter (as may be amended, restated, modified, supplemented or waived from time to time), (iv) any
action to interpret, apply, enforce or determine the validity of the Second A&R Charter (as may be amended, restated, modified, supplemented
or waived from time to time), (v) any action asserting a claim against us or any of our directors, officers, employees or agents
that is governed by the internal affairs doctrine or (vi) any action asserting an "internal corporate claim" as that
term is defined in Section 115 of the DGCL.

 In addition, the Second A&R Charter provides
that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of
America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a
cause of action arising under the Securities Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing,
the Second A&R Charter provides that the exclusive forum provision will not apply to claims seeking to enforce any liability or duty
created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

 This choice of forum provision may limit a stockholder's
ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees
or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived
our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice
of forum provision contained in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional
costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

 The Second A&R Charter contains a waiver
of the corporate opportunities doctrine for our directors and officers, and therefore such persons have no obligations to make opportunities
available to us.

 The "corporate opportunities" doctrine
provides that directors and officers of a corporation, as part of their duty of loyalty to the corporation and its shareholders, generally
have a fiduciary duty to disclose opportunities to the corporation that are related to its business and are prohibited from pursuing those
opportunities unless the corporation determines that it is not going to pursue them. Our amended and restated certificate of incorporation
waives the corporate opportunities doctrine. It states that, to the extent allowed by law, the doctrine of corporate opportunity, or any
other analogous doctrine, shall not apply with respect to us or any of our officers or directors or any of their respective affiliates,
in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may
have as of the date of the amended and restated certificate of incorporation or in the future, and we renounce any expectancy that any
of pir directors or officers will offer any such corporate opportunity of which he or she may become aware to us, except, the doctrine
of corporate opportunity shall apply with respect to any of our directors or officers with respect to a corporate opportunity that was
offered to such person solely in his or her capacity as a director or officer of the company and (i) such opportunity is one that
we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (ii) the director
or officer is permitted to refer that opportunity to us without violating any legal obligation.

 Our directors and officers or their respective
affiliates may pursue acquisition opportunities that may be complementary to our business and, as a result of the waiver described above,
those acquisition opportunities may not be available to us. In addition, our directors and officers or their respective affiliates may
have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even
though such transactions might involve risks to you.

 We are a holding company with no operations
of our own, and we depend on our subsidiaries for cash to fund all of our operations, taxes and other expenses and any dividends that
we may pay.

 Our operations are conducted entirely through
our subsidiaries. Our ability to generate cash to meet our debt and other obligations, to cover all applicable taxes payable and to declare
and pay any dividends on our Class A Common Stock is dependent on the earnings and the receipt of funds through distributions from our
subsidiaries. Our subsidiaries' respective abilities to generate adequate cash depends on a number of factors, including development
of reserves, successful acquisitions of complementary properties, advantageous drilling conditions, natural gas, oil prices, compliance
with all applicable laws and regulations and other factors.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 We acknowledge the increasing importance of cybersecurity
in today's digital and interconnected world. Cybersecurity threats pose significant risks to the integrity of our systems and data,
potentially impacting our business operations, financial condition and reputation.

 As a smaller reporting company, we currently do
not have formalized cybersecurity measures, a dedicated cybersecurity team or specific protocols in place to manage cybersecurity risks.
Our approach to cybersecurity is in the developmental stage, and we have only begun to conduct comprehensive risk assessments, establish
an incident response plan, and engage with external cybersecurity consultants for assessments or services. As of the date of this report,
we have adopted an incident response plan which governs our assessment and response upon the occurrence of a material cybersecurity incident,
including the process for informing senior management and our Board of Directors. Our Vice President of Finance and Administration has
been designated as the lead for implanting our incident response plan. In addition, in 2024, we have acquired a cybersecurity insurance
policy.

 Given our current stage of cybersecurity development,
we have not experienced any significant cybersecurity incidents to date. However, we recognize that the absence of a formalized cybersecurity
framework may leave us vulnerable to cyberattacks, data breaches and other cybersecurity incidents. Such events could potentially lead
to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation
costs and negatively impact our reputation among customers and partners.

 We are in the process of evaluating our cybersecurity
needs and developing appropriate measures to enhance our cybersecurity posture. This includes considering the engagement of external cybersecurity
experts to advise on best practices, conducting vulnerability assessments and developing an incident response strategy. Our goal is to
establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing
our exposure to cybersecurity risks.

 In addition, our board of directors will oversee
any cybersecurity risk management framework and a dedicated committee of our board of directors will review and approve any cybersecurity
policies, strategies and risk management practices.

 Despite our efforts to improve our cybersecurity
measures, there can be no assurance that our initiatives will fully mitigate the risks posed by cyber threats. The landscape of cybersecurity
risks is constantly evolving, and we will continue to assess and update our cybersecurity measures in response to emerging threats.

 For a discussion of potential cybersecurity risks
affecting us, please refer to the " Risk Factors " section.

 ITEM 2. PROPERTIES

 We currently maintain our executive offices at
3730 Kirby Drive, Suite 1200, Houston, Texas 77098. We recently leased a space at 10810 Old Katy Rd, Katy, TX 77494 just beyond the Houston
city limits for our engineering and geological center. The cost for the two spaces combined are approximately $3,000 per month. We consider
our current office space adequate for our current operations.

 ITEM 3. LEGAL PROCEEDINGS

 To the knowledge of our management, there is no
material litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against
any of our property.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 (a) Market Information

 Our Class A Common Stock and public warrants are
currently listed on the NYSE American under the symbol "EONR" and "EONR.WS", respectively. On March 31, 2025,
the closing sale price of our Class A Common Stock was $0.48 per share.

 (b) Holders

 As of March 31, 2025, there were approximately
41 holders of record of our Class A Common Stock and there were no holders of record of our Class B Common Stock. The number of record
holders was determined from the records of our transfer agent and does not include beneficial owners of our shares of Class A Common Stock
whose shares are held in the names of various security brokers, dealers and registered clearing agencies.

 (c) Dividends

 Our Board of Directors has not adopted a formal
dividend policy for a recurring fixed dividend payment to shareholders. We have not paid any cash dividends on our Class A Common Stock
to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and
general financial condition subsequent to completion of a business combination. The payment of any cash dividends in the future will be
within the discretion of our Board of Directors at such time. In addition, our Board of Directors is not currently contemplating and does
not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare
dividends may be limited by restrictive covenants we may agree to in connection therewith.

 (d) Securities Authorized for Issuance Under
Equity Compensation Plans

 Information about our equity compensation plans
in Item 11 of Part III of this report is incorporated herein by reference.

 (e) Performance Graph

 Not applicable.

 (f) Recent Sales of Unregistered Securities;
Use of Proceeds from Registered Offerings

 In March 2024, we issued 50,000 warrants to
a third-party having terms substantially similar to the private placement warrants in connection with the receipt of $50,000 in
cash and the issuance of a promissory note.

 In March 2024, we issued 100,000 warrants to
a third-party having terms substantially similar to the private placement warrants in connection with the receipt of $100,000 in
cash and the issuance of a promissory note.

 In March 2024, we issued 50,000 warrants to
a third-party having terms substantially similar to the private placement warrants in connection with the receipt of $50,000 in
cash and the issuance of a promissory note.

 In March 2024, we issued 40,000 RSUs to a director
for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026. We also issued 37,500 RSUs
to such director that vest on November 15, 2024.

 In March 2024, we issued 37,000 RSUs to a director
for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026. We also issued 37,500 RSUs
to such director that vest on November 15, 2024.

 In March 2024, we issued 35,000 RSUs to a director
for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026. We also issued 37,500 RSUs
to such director that vest on November 15, 2024.

 In March 2024, we issued 50,000 RSUs to our Chief
Executive Officer for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026.

 In March 2024, we issued 50,000 RSUs to our Chief
Financial Officer for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026.

 In March 2024, we issued 50,000 RSUs to our General
Counsel for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026.

 In March 2024, we issued 40,000 RSUs to an officer
for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026.

 In March 2024, we issued 35,000 RSUs to an officer
for services. The RSUs vest 1/3 on November 15, 2024, 1/3 on November 15, 2025, and 1/3 on November 15, 2026.

 In March 2024, we issued 35,000 RSUs to a former
officer for services. The RSUs vested on issuance.

 In March 2024, we issued 60,000 RSUs to a consultant
for services. The RSUs vest on November 15, 2024.

 In March 2024, we issued 30,000 RSUs to a consultant
for services. The RSUs vest on November 15, 2024.

 In April 2024, the Company issued 100,000 warrants
to an officer of the Company having terms substantially similar to the Private Placement Warrants in connection with the receipt of $100,000
in cash and the issuance of a promissory note.

 In May 2024, the Company issued 100,000 warrants
to a director of the Company having terms substantially similar to the Private Placement Warrants in connection with the receipt of $100,000
in cash and the issuance of a promissory note.

 In October 2024, the Company issued 75,000 shares
to a consultant for services, and 60,000 shares to a former employee. The Company also issued 150,000 shares to Rh ne Merchant House,
Ltd.

 In October 2024, the Company issued an aggregate
of 22,213 shares to three officers of the Company, 2,500 shares to a director of the Company, and 3,250 shares to an employee.

 In December 2024, we issued 34,000 shares to four
consultants for services.

 All issuances described above were not registered
under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated
thereunder.

 (g) Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

 None.

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The following discussion and analysis of our
financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained
elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements
that involve risks and uncertainties – See "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS".

 Overview

 We are an independent oil and natural gas company
based in Texas and formed in 2017 that is focused on the acquisition, development, exploration, production and divestiture of oil and
natural gas properties in the Permian Basin. The Permian Basin is located in west Texas and southeastern New Mexico and is characterized
by high oil and liquids-rich natural gas content, multiple vertical and horizontal target horizons, extensive production histories, long-lived
reserves and historically high drilling success rates. our properties are in the Grayburg-Jackson Field in Eddy County, New Mexico, which
is a sub-area of the Permian Basin. Pogo focuses primarily on production through waterflooding recovery methods.

 The Company's assets as mentioned above
consist of contiguous leasehold positions of approximately 13,700 gross (13,700 net) acres with an average working interest of 100%. We
operate 100% of the net acreage across the Company's assets, all of which is net operated acreage of vertical wells with average
depths of approximately 3,810 feet.

 Our average daily production for the year ended
December 31, 2024, was 798 barrel of oil equivalent ("BOE") per day, and for the year ended December 31, 2023, was 1,022 BOE
per day. The decrease in production is due to an increase in well downtime, field conditions requiring certain enhancements, and the conveyance
of the 10% Override royalty interest to Pogo Royalty.

 Selected Factors That Affect Our Operating
Results

 Our revenues, cash flows from operations and future
growth depend substantially upon:

 the timing and success of production and development activities;

 the prices for oil and natural gas;

 the quantity of oil and natural gas production from our wells;

 changes in the fair value of the derivative instruments we use to reduce our exposure to fluctuations in the price of oil and natural gas;

 our ability to continue to identify and acquire high-quality acreage and development opportunities; and

 the level of our operating expenses.

 In addition to the factors that affect companies
in our industry generally, the location of substantially all of our acreage discussed above subjects our operating results to factors
specific to these regions. These factors include the potential adverse impact of weather on drilling, production and transportation activities,
particularly during the winter and spring months, as well as infrastructure limitations, transportation capacity, regulatory matters and
other factors that may specifically affect one or more of these regions.

 The price at which our oil and natural gas production
are sold typically reflects either a premium or discount to the New York Mercantile Exchange ("NYMEX") benchmark price. Thus,
our operating results are also affected by changes in the oil price differentials between the applicable benchmark and the sales prices
we receive for our oil production. Our oil price differential to the NYMEX benchmark price during the years ended December 31, 2024 and
2023, was $(1.03) and $(4.95) per barrel, respectively. Our natural gas price differential during the years ended December 31, 2024 and
2023, was $0.08 and $(0.06) per one thousand cubic feet ("Mcf"), respectively. Fluctuations in our price differentials and
realizations are due to several factors such as gathering and transportation costs, takeaway capacity relative to production levels, regional
storage capacity, gain/loss on derivative contracts and seasonal refinery maintenance temporarily depressing demand.

 Market Conditions

 The price that we receive for the oil and natural
gas we produce is largely a function of market supply and demand. Because our oil and gas revenues are heavily weighted toward oil, we
are more significantly impacted by changes in oil prices than by changes in the price of natural gas. World-wide supply in terms of output,
especially production from properties within the United States, the production quota set by OPEC, and the strength of the U.S. dollar
can adversely impact oil prices.

 Historically, commodity prices have been volatile,
and we expect the volatility to continue in the future. Factors impacting the future oil supply balance are world-wide demand for oil,
as well as the growth in domestic oil production.

 Prices for various quantities of natural gas and
oil that we produce significantly impact our revenues and cash flows. The following table lists average NYMEX prices for oil and natural
gas for the years ended December 31, 2024 and 2023.

 For the years ended

 2024

 2023

 Average NYMEX Prices (1)

 Oil (per Bbl)

 $
 76.55

 $
 77.64

 Natural gas (per Mcf)

 $
 2.19

 $
 2.54

 (1)

 Based on average NYMEX closing prices.

 For the year ended December 31, 2024, the average
NYMEX oil pricing was $76.55 per barrel of oil or 1% lower than the average NYMEX price per barrel for the year ended December 31, 2023.
Our settled derivatives decreased our realized oil price per barrel by $1.91 and $3.63 in the years ended December 31, 2024, and 2023,
respectively. Our average realized oil price per barrel after reflecting settled derivatives and location differentials was $73.61 for
the year ended December 31, 2024 compared to $69.06 for the year ended December 31, 2023.

 The average NYMEX natural gas pricing for the
year ended December 31, 2024, was $2.19 per Mcf, or 14% lower than the average NYMEX price per Mcf for the year ended December 31, 2023.

 Pogo Royalty Overriding Royalty Interest Transaction

 Effective July 1, 2023, the Predecessor transferred
to Pogo Royalty, a related party, an assigned and undivided overriding royalty interest ("ORRI") equal in amount to ten percent
(10%) of Pogo Resources, LLC's and LH Operating, LLC's interest all oil, gas and minerals in, under and produced from each
lease. The consideration received for the 10% ORRI was $10. Thus, a loss of $816,011 was recorded as a result of the conveyance during
the period from January 1, 2023 to November 14, 2023 of the Predecessor. Additionally, because of this transaction, our reserve balance
was decreased as well our current net production volumes and revenues. Additional details are discussed in Note 1 and Note 13 of notes
to the consolidated financial statements.

 Results of Operations

 For the year ended December 31, 2024, 86% and
14% of sales volumes from the assets were attributable to crude and natural gas, respectively. As of December 31, 2024, the company was
continuing development of the Seven River waterflood interval. Further, as of December 31, 2024, the Company owned an interest in approximately
342 gross (342 net) producing wells.

 The following table sets forth selected operating
data for the periods indicated. Average sales prices are derived from accrued accounting data for the relevant period indicated.

 For the year ended
 December 31, 2024

 2023

 November 14,
 2023

 Revenues

 Crude oil

 $
 19,298,698

 $
 2,513,197

 $
 22,856,521

 Natural gas and natural gas liquids

 483,486

 70,918

 809,553

 Gain (loss) on derivative instruments, net

 (850,374
)

 340,808

 51,957

 Other revenue

 487,109

 50,738

 520,451

 Total revenues

 19,418,919

 2,975,661

 24,238,482

 Average sales prices:

 Oil (per Bbl)

 $
 75.52

 $
 65.11

 $
 73.58

 Effect on gain (loss) of settled oil derivatives on average price (per Bbl)

 (1.91
)

 (2.66
)

 0.17

 Oil net of settled oil derivatives (per Bbl)

 73.61

 62.45

 73.75

 Natural gas (per Mcf)

 2.27

 2.41

 2.48

 Realized price on a BOE basis excluding settled commodity derivatives

 67.96

 59.40

 64.84

 Effect of gain (loss) on settled commodity derivatives on average price (per BOE)

 (1.68
)

 (2.36
)

 (3.19
)

 Realized price on a BOE basis including settled commodity derivatives

 $
 66.28

 $
 57.04

 $
 61.66

 Expenses

 Production taxes, transportation and processing

 1,715,792

 226,062

 2,117,800

 Lease operating

 8,614,080

 1,453,367

 8,692,752

 Depletion, depreciation and amortization

 2,407,098

 352,127

 1,497,749

 Accretion of asset retirement obligations

 144,988

 11,062

 848,040

 General and administrative

 10,381,095

 3,553,117

 3,700,267

 Acquisition costs

 -

 9,999,860

 -

 Total expenses

 23,263,053

 15,595,595

 16,856,608

 Costs and expenses (per BOE):

 Production taxes, transportation, and processing

 $
 5.89

 $
 5.20

 $
 5.80

 Lease operating expenses

 29.59

 33.41

 23.82

 Depreciation, depletion, and amortization expense

 8.27

 8.09

 4.10

 Accretion of asset retirement obligations

 0.50

 0.25

 2.32

 General and administrative

 35.66

 81.67

 10.14

 Net producing wells at period-end

 Oil and Natural Gas Sales

 Our revenues vary from year to year primarily
as a result of changes in realized commodity prices and production volumes. For the year ended December 31, 2024, our oil and natural
gas sales decreased 15% from the year ended December 31, 2023 on a combined Successor and Predecessor basis, driven by a 28% decrease
in production volumes offset by a 6% increase in realized prices, excluding the effect of settled commodity derivatives. The higher average
price in the year ended December 31, 2024 compared to the combined year 2023, was driven by higher average NYMEX oil and natural gas prices
during the first nine months of the year. Realized production from oil and gas properties decreased due to an increase in well downtime.

 Production for the comparable periods is set forth
in the following table:

 For the year ended

 2024

 2023

 Production:

 Oil (MBbl)

 Natural gas (MMcf)

 Total (MBOE) (1)

 Average daily production:

 Oil (Bbl)

 Natural gas (Mcf)

 Total (BOE) (1)

 1,022

 (1)

 Natural gas is converted to BOE at the rate of one-barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not necessarily indicative of the relationship of oil and natural gas prices.

 Derivative Contracts

 We enter into commodity derivatives instruments
to manage the price risk attributable to future oil production.

 We recorded a loss on derivative contracts of
$850,374 for the year ended December 31, 2024 compared to a gain of $392,765 on a combined Successor and Predecessor basis for the year
ended December 31, 2023. Lower commodity prices in 2024, resulted in realized losses of $489,084 for the year ended December 31, 2024
compared to realized losses of $1,266,277 on a combined Successor and Predecessor basis for the year ended December 31, 2023. For the
year ended December 31, 2024, our average realized oil price per barrel after reflecting settled derivatives was $73.61, compared to $73.82
on a combined Successor and Predecessor basis for the year ended December 31, 2023.

 As of December 31, 2024, we ended the period with
a $106,397 net derivative asset compared to $467,687 as of December 31, 2023.

 Other Revenue

 Other revenue was $487,109 for the year ended
December 31, 2024, compared to $571,189 on a combined Successor and Predecessor basis for the year ended December 31, 2023. The revenue
is related to providing water services to a third party and the slight decrease is due to lower volumes in 2024 from supply line disruptions
during the third quarter of 2024

 Lease Operating Expenses

 Lease operating expenses were $8,614,080 for the
year ended December 31,2024, compared to $10,146,119 on a combined Successor and Predecessor basis for the year ended December 31, 2023.
On a per unit basis, production expenses increased 19% from $27.20 per BOE for the combined Successor and Predecessor year ended December
31, 2023, to $29.59 per BOE for the year ended December 31, 2024, due to increases in proactive maintenance activities, higher labor costs,
and increased oil field service and supplies costs. Additionally, because of the conveyance of the 10% ORRI in July 2023, the net production
volumes decreased, which increases the "per BOE" amounts.

 Production Taxes, Transportation and Processing

 We pay production taxes, transportation and processing
costs based on realized oil and natural gas sales. Production taxes, transportation and processing costs were $1,715,792 for the year
ended December 31, 2024 compared to $2,343,862 on a combined Successor and Predecessor basis for the year ended December 31, 2023. As
a percentage of oil and natural gas sales, these costs were 8.7% and 8.9% for the years ended December 31, 2024 and 2023 respectively.
Production taxes, transportation, and processing as a percent of total oil and natural gas sales are consistent with historical trends.

 Depletion, Depreciation and Amortization

 Depletion, depreciation and amortization ("DD&A")
was $2,407,098 as of December 31, 2024, compared to $1,849,876 on a combined Successor and Predecessor basis for the year ended December
31, 2023. DD&A was $8.27 per BOE for the year ended December 31, 2024, compared to $4.53 per BOE on a combined Successor and Predecessor
basis for the year ended December 31, 2023. The aggregate increase in DD&A expense for the year ended December 31, 2024 compared to
2023 was driven by a 48% increase in the DD&A rate per BOE, partially offset by a 28% decrease in production levels. The increase
in the DD&A rate per BOE was driven by the increase in the oil and gas properties balance due to the development of the Seven Rivers
waterflood interval and the decrease in the reserves balance due to the conveyance of the 10% overriding royalty interest to Royalty.

 Accretion of Asset Retirement Obligations

 Accretion expense was $144,988 as of December
31, 2024, compared to $859,102 on a combined Successor and Predecessor basis for the year ended December 31, 2023. Accretion expense was
$0.50 per BOE for the year ended December 31, 2024, compared to $2.32 per BOE on a combined Successor and Predecessor basis for the year
ended December 31, 2023. The aggregate decrease in accretion expense for the fiscal year ended December 31, 2024 compared to 2023 was
driven by changes in certain assumptions, specifically the inflation factor and discount rate as a result of the acquisition date where
we revised our estimates as part of its fair value estimates for the acquired business.

 General and Administrative

 General and administrative expenses were $10,381,095
as of December 31, 2024 compared to $7,253,384 on a combined Successor and Predecessor basis for the year ended December 31, 2023. The
increase for general and administrative expenses is primarily due to increased cost of outsourced legal, professional, and accounting
services as a result of the transaction disclosed in Note 1 in the notes to the consolidated financial statements and the costs of
being a public company, and includes stock-based compensation expense of $2,778,991 for the year ended December 31, 2024. The general
and administrative expense total of $3,553,117 for the period from November 15, 2023 to December 31, 2023 for the Successor includes $1,500,000
from the 138,122 shares of Class A common stock issued to White Lion for the commitment fee on the Common Stock Purchase Agreement, $910,565
in stock-based compensation to certain Founders under the Founder Pledge Agreement, and $135,400 in other stock-based compensation.

 Acquisition costs

 There were no acquisition costs as of December
31, 2024, compared to $9,999,860 during the Successor period from November 15, 2023 to December 31, 2023, and included an aggregate of
$7,854,660 in costs related to the Forward Purchase Agreement and the Non-Redemption Agreements, due diligence and broker fees related
to closing the Purchase.

 Interest Expense and amortization of debt discount

 Interest expense was $7,643,200 as of December
31, 2024, compared to $1,043,312 for the period from November 15, 2023 to December 31, 2023 (Successor), $1,834,208 for the period from
January 1, 2023 to November 14, 2023 (Predecessor), The Successor period interest expense is driven by the Senior Secured Term loan entered
into as part of the Closing, and the Private Notes Payable. The interest expense during the Predecessor period from January 1, 2023 to
November 15, 2023 was primarily due to an increase in the average amount of the Predecessor' revolving credit facility outstanding
and an increase in the weighted average interest rate. The revolving credit facility was not assumed in the Acquisition.

 Amortization of debt discount was $2,361,627 as
of December 31, 2024 compared to $1,191,553 period from November 15, 2023 to December 31, 2023 (Successor), and attributable to deferred
finance costs paid on the Senior Secured Term Loan, and discounts associated with the Private Notes Payable during 2023.

 Change in fair value of forward purchase agreement

 The change in fair value of forward purchase agreement
consisted of a gain of $561,099 for the year ended December 31, 2024, for the Successor related to the inputs used in the Company's
fair value estimate of the FPA Put Option. The key inputs to the fair value estimate include the Company's stock price, which declined
during the Successor period, and the likelihood, timing and price of a potential dilutive offering.

 Gain on extinguishment of liabilities

 The Company recognized a gain on extinguishment
of liabilities of $1,638,138 during the year ended December 31, 2024. In November 2024, the Company entered into a settlement agreement
with the FPA Seller to fully release the Company from the terms of the FPA. We agreed to issue to the FPA Seller 450,000 restricted Class
A Common shares which had a fair value of $450,000 based on the closing price of the Company's common stock at the agreement date.
The Company recognized a gain on settlement of the FPA liability of $82,998, which is included in Gain on Extinguishment of Liabilities
on the Company's consolidated statement of operations for the year ended December 31, 2024.

 The Company also recognized a gain of $1,720,000
related to the settlement of royalties payable and other claims with the Sellers. The Company recognized a loss on extinguishment of accounts
payable of $76,200, and recognized a loss of $88,660 related to the exchange of certain notes payable and warrant liabilities for convertible
note agreements.

 Change in fair value of warrant and convertible
note liabilities

 The change in fair value of warrant liabilities
consisted of a loss of $804,004 as of December 31, 2024, compared to a gain of $187,704 for the period from November 15, 2023 to December
31, 2023 for the Successor related to fluctuations in the trading price of the Company's warrants, a portion of which are accounted
for as liabilities due to the redemption provisions in those issued to Private Note holders. The Company also recognized a loss of $192,744
from the change in fair value of its convertible note liabilities during the year ended December 31, 2024.

 Loss on asset sales

 Loss on asset sales was $816,011 on a combined
Successor and Predecessor basis for the year ended December 31, 2023, compared to $0 for the year ended December 31, 2024. The decrease
was due to the loss that was recognized as a result of the conveyance of the 10% overriding royalty interest to Pogo Royalty in July 2023.

 Liquidity and Capital Resources

 Liquidity

 Our main sources of liquidity have been internally
generated cash flows from operations, credit facility borrowings and equity line financing sales and issuances. Our primary use of capital
has been for the development of oil and gas properties, payment to vendors, payment of debt obligations [and the return of initial invested
capital to our founders]. We continually monitor potential capital sources for opportunities to enhance liquidity or otherwise improve
our financial position.

 As of December 31, 2024, we had outstanding debt
of $23,641,517 under our Senior Secured Term Loan, $15,000,000 under the Seller Promissory Note, $3,556,750 of outstanding private notes
payable, and $948,982 from short term merchant loans. A total of $9,080,910 of this is due within one year. As of December 31, 2024, we
had $2,971,558 of cash and cash equivalents on hand, of which approximately $2,600,000 is in an escrow account pursuant to the requirements
of the Senior Secured Term Loan. At December 31, 2024 we had a working capital deficit of $31,213674. These conditions raise substantial
doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

 The Company had positive cash flow from operations
of $3,700,686 for the year ended December 31, 2024. Additionally, management's plans to alleviate this substantial doubt include
improving profitability through streamlining costs, maintaining active hedge positions for its proven reserve production, and the issuance
of additional shares of Class A common stock.

 We have a three-year equity line (ELOC) Common
Stock Purchase Agreement with a maximum funding limit of $150,000,000 that can fund our operations and production growth, and be used
to reduce liabilities. Through the date of this filing, we have received $6,992,906 in cash proceeds related to the sale of 7,000,000
shares of common stock under this agreement and expect to continue to utilize it to fund current operational needs. We cannot assure you,
however, that any additional capital will be available to us on favorable terms or at all. Our capital expenditures could be curtailed
if our cash flows decline from expected levels.

 Cash Flows

 Sources and uses of cash for the years ended December
31, 2024, and 2023, are as follows:

 2024

 2023 to December 31,

 2023

 2023 to November 14,

2023

 Net cash provided by operating activities

 $
 3,700,686

 $
 484,474

 $
 8,190,563

 Net cash (used in) provided by investing activities

 (3,575,062
)

 18,296,176

 (6,960,555
)

 Net cash used in financing activities

 (659,520
)

 (17,866,128
)

 (3,000,000
)

 Net change in cash and cash equivalents

 $
 (533,896
)

 $
 914,522

 $
 (1,769,992
)

 Operating Activities

 The decrease in net cash flow provided by operating
activities for the year ended December 31, 2024, as compared to 2023 on a combined Successor and Predecessor basis is primarily due to
increased net loss as a result of decreased prices and production volumes, and higher general and administrative costs associated with
public filings.

 Investing Activities

 Net cash used in investing activities for the
year ended December 31, 2024 was primarily due to the development of crude oil and gas properties. Net cash provided by investing activities
in the Successor period from November 15, 2023 to December 31, 2023 was primarily due to Trust Account withdrawals associated with the
Closing in November 2023 of $49,362,479, partially offset by the cash paid to the Sellers of EON of $30,827,804 at the Closing, net of
cash acquired. Cash flows used in investing activities in the Predecessor period ending November 14, 2023 consisted of $6,769,557 of cash
paid for oil and gas property costs, primarily due to significant expenditures in the previous year to upgrade certain wells and meet
compliance requirements.

 Financing Activities

 Net cash used in financing activities for the
year ended December 31, 2024 was primarily due to repayments of long-term debt offset by the proceeds from the sale of common stock under
the Common Stock Purchase Agreement. Net cash used by financing activities during the Successor period from November 15, 2023 to December
31, 2023 were primarily related to the redemptions of common stock of Public Shares at Closing of $44,737,839, partially offset by the
net proceeds from the Senior Secured Term Loan of $27,191,008.

 Off Balance Sheet Arrangements

 As of December 31, 2024 and 202, the Company did
not have any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission (SEC).

 Contractual Obligations

 We have contractual commitments under our Senior
Secured Term Loan, the Seller Promissory Note and the Private Notes Payable which include periodic interest payments. See Note 5 to our
interim condensed consolidated unaudited financial statements. We have contractual commitments that may require us to make payments upon
future settlement of our commodity derivative contracts. See Note 4 to our interim condensed consolidated unaudited financial statements.

 Our other liabilities represent current and noncurrent
other liabilities that are primarily comprised of environmental contingencies, asset retirement obligations and other obligations for
which neither the ultimate settlement amounts nor their timings can be precisely determined in advance.

 Critical Accounting Estimates

 The following is a discussion of our most critical
accounting estimates, judgements and uncertainties that are inherent in the Company's application of GAAP.

 Proved Reserve Estimates

 Estimates of our proved reserves included in this
report are prepared in accordance with GAAP and SEC guidelines. The accuracy of a proved reserve estimate is a function of:

 the quality and quantity of available data;

 the interpretation of that data;

 the accuracy of various mandated economic assumptions; and

 the judgment of the persons preparing the estimate.

 Our proved reserve information included in this
filing as of December 31, 2024 and 2023, was prepared by independent petroleum engineers. Because these estimates depend on many assumptions,
all of which may substantially differ from future actual results, proved reserve estimates will be different from the quantities of oil
and gas that are ultimately recovered. In addition, results of drilling, testing and production after the date of an estimate may justify,
positively or negatively, material revisions to the estimate of proved reserves.

 It should not be assumed that the standardized
measure included as of December 31, 2024, is the current market value of our estimated proved reserves. In accordance with SEC requirements,
we based the 2024 standardized measure on a twelve-month average of commodity prices on the first day of each month in 2024 and prevailing
costs on the date of the estimate. Actual future prices and costs may be materially higher or lower than the prices and costs utilized
in the estimate. See Note 13 of notes to the consolidated financial statements for additional information.

 Our estimates of proved reserves materially impact
depletion expense. If the estimates of proved reserves decline, the rate at which we records depletion expense will increase, reducing
future net income. Such a decline may result from lower commodity prices, which may make it uneconomical to drill for and produce higher
cost fields. In addition, a decline in proved reserve estimates may impact the outcome of our assessment of our proved properties for
impairment.

 Impairment of Proved Oil and Gas Properties

 We review our proved properties to be held and
used whenever management determines that events or circumstances indicate that the recorded carrying value of the properties may not be
recoverable. Management assesses whether or not an impairment provision is necessary based upon estimated future recoverable proved reserves,
commodity price outlooks, production and capital costs expected to be incurred to recover the reserves, discount rates commensurate with
the nature of the properties and net cash flows that may be generated by the properties. Proved oil and gas properties are reviewed for
impairment at the level at which depletion of proved properties is calculated. See Note 2 of notes to the consolidated financial statements.

 Asset Retirement Obligations

 We have significant obligations to remove tangible
equipment and facilities and to restore the land at the end of crude oil and natural gas production operations. Our removal and restoration
obligations are primarily associated with plugging and abandoning wells. Estimating the future restoration and removal costs is difficult
and requires management to make estimates and judgments because most of the removal obligations are many years in the future and contracts
and regulations often have vague descriptions of what constitutes removal. Asset removal technologies and costs are constantly changing,
as are regulatory, political, environmental, safety and public relations considerations.

 Inherent in the present value calculation are
numerous assumptions and judgments including the ultimate settlement amounts, credit-adjusted discount rates, timing of settlement and
changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact
the present value of the existing asset retirement obligations, a corresponding adjustment is generally made to the crude oil and natural
gas property or other property and equipment balance. See Note 5 of notes to the consolidated financial statements.

 Litigation and Environmental Contingencies

 We make judgments and estimates in recording liabilities
for ongoing litigation and environmental remediation. Actual costs can vary from such estimates for a variety of reasons. The costs to
settle litigation can vary from estimates based on differing interpretations of laws and opinions and assessments on the amount of damages.
Similarly, environmental remediation liabilities are subject to change because of changes in laws and regulations, developing information
relating to the extent and nature of site contamination and improvements in technology. A liability is recorded for these types of contingencies
if we determine the loss to be both probable and reasonably estimable. See Note 10 of notes to the consolidated financial statements.

 Forward Purchase Agreement Valuation

 The Company has determined
that the FPA Put Option, including the Maturity Consideration, within the Forward Purchase Agreement is (i) a freestanding financial instrument
and (ii) a liability (i.e., an in-substance written put option). This liability was recorded as a liability at fair value on the consolidated
balance sheet as of the reporting date in accordance with ASC 480. The fair value of the liability was estimated using a Monte-Carlo Simulation
in a risk-neutral framework. Specifically, the future stock price is simulated assuming a Geometric Brownian Motion ("GBM").
For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted back to present.
Finally, the value of the forward is calculated as the average present value over all simulated paths. The model also considered the likelihood
of a dilutive offering of common stock.

 Derivative Instruments

 The Company uses derivative financial instruments
to mitigate its exposure to commodity price risk associated with oil prices. The Company's derivative financial instruments are
recorded on the consolidated balance sheets as either an asset or a liability measured at fair value. The Company has elected not to apply
hedge accounting for its existing derivative financial instruments, and as a result, the Company recognizes the change in derivative fair
value between reporting periods currently in its consolidated statements of operations. The fair value of the Company's derivative
financial instruments is determined using industry-standard models that consider various inputs including: (i) quoted forward prices
for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as
well as other relevant economic measures. Realized gains and losses from the settlement of derivative financial instruments and unrealized
gains and unrealized losses from valuation changes in the remaining unsettled derivative financial instruments are reported in a single
line item as a component of revenues in the consolidated statements of operations. Cash flows from derivative contract settlements are
reflected in operating activities in the accompanying consolidated statements of cash flows. See Note 4 for additional information
about the Company's derivative instruments.

 New Accounting Pronouncements

 The effects of new accounting pronouncements are
discussed in Note 2 to the consolidated financial statements.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

 We are a smaller reporting company as defined
by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 This information appears following Item 16
of this report and is included herein by reference.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

 Disclosure controls and procedures are controls
and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive
Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer) and Controller (Principal Accounting Officer),
as appropriate to allow timely decisions regarding required disclosure.

 As required by Rules 13a-15 and 15d-15 under the
Exchange Act, our Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer) and Controller
(Principal Accounting Officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2024. Based upon his evaluation, our Chief Executive Officer (Principal Executive Officer), Chief Financial
Officer (Principal Financial Officer) and Controller (Principal Accounting Officer) concluded that, our disclosure controls and procedures
were not effective related to the lack of sufficient accounting personnel to manage the Company's financial accounting process,
lack of segregation of duties, proper accounting for complex financial instruments and lack of design and implementation of controls related
to oil and gas activities which combined constituted a material weakness in our internal control over financial reporting. As a result,
we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally
accepted accounting principles. Accordingly, management believes that the financial statements included in this Annual Report on Form
10-K present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

 A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of the company's annual or interim financial statements will not be prevented or detected on a timely basis. Management concluded
that a deficiency in internal control over financial reporting existed relating to the lack of sufficient accounting personnel to manage
the Company's financial accounting process, lack of segregation of duties, proper accounting for complex financial instruments and
lack of design and implementation of controls related to oil and gas activities constituted a material weakness as defined in the SEC
regulations.

 Management's Report on Internal Controls Over Financial Reporting

 As required by SEC rules and regulations implementing
Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with GAAP. Our internal
control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts
and expenditures are being made only in accordance with authorizations of our management and directors, and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect
on the consolidated financial statements.

 Management assessed the effectiveness of our internal
control over financial reporting at December 31, 2024. In making these assessments, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessments
and those criteria, management determined that we did not maintain effective internal control over financial reporting as of December
31, 2024 due to the material weakness in our internal control over financial reporting described above.

 We plan to enhance our processes to identify and
appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards
that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials
and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting
applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives
will ultimately have the intended effects.

 This Annual Report on Form 10-K does not include
an attestation report on internal control over financial reporting from our independent registered public accounting firm due to our status
as an emerging growth company under the JOBS Act.

 Changes in Internal Control over Financial Reporting

 During the most recently completed fiscal quarter,
there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION.

 During the three months ended December 31, 2024,
none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a "Rule 10b5-1
trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as such terms are defined under Item 408 of Regulation
S-K.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS.

 Not applicable.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Directors and Executive Officers

 Our Board of Directors consists of five directors. Three of the five
directors are independent. Our current directors and executive officers are as follows:

 Name

 Age

 Title

 Chief Executive Officer, President and Director

 Chief Financial Officer and Director

 General Counsel and Secretary

 Joseph V. Salvucci Sr

 Director and Chairman

 Joseph V. Salvucci Jr.

 Director

 Byron Blount

 Director

 Dante Caravaggio — Chief Executive
Officer, President and Director. Mr. Caravaggio joined the company and has served as our Chief Executive Officer, President, and Director
since December 2023. Since April 2021, Mr. Caravaggio has served as Chairman of SWI Excavating, one of the leading regional underground
utility contractors in Colorado. From January 2020 to April 2022, Mr. Caravaggio served on the board of directors of McCarl's Inc.,
a leading energy constructor in the northeast United States. Prior to joining McCarl's Inc., Mr. Caravaggio was Senior Vice President,
Hydrocarbons Americas for KBR (US) since January 2018. Prior to his role with KBR (US), Mr. Caravaggio held a number of roles as an executive
and project manager with Parsons Corp. and Jacobs Engineering, overseeing upstream and downstream hydrocarbon projects. Mr. Caravaggio
received his MBA at Pepperdine University in Malibu, California and his BS and MS in Petroleum Engineering at the University of Southern
California.

 Mr. Caravaggio is qualified to serve as CEO
and as a member of our board of directors based on our review of his qualifications, attributes, and skills, including his oil and gas
management experience and oil and gas acquisition experience.

 Mitchell B. Trotter — Chief
Financial Officer and Director. Mr. Trotter joined the company and has served as our Senior Vice President of Finance since
October 2022 and became Chief Financial Officer and Director in November 2023. Mr. Trotter has 41 years of experience beginning
his career in 1981 as an auditor with Coopers & Lybrand for seven years. He then served as CFO of two private investor backed
private companies where the first was in real estate development and the latter in the engineering and construction industry. For the
next 30 years, Mr. Trotter served in various CFO and Controller positions with three publicly traded companies in the engineering
and construction services industry which were: Earth Tech to 2002; Jacobs Engineering to 2017; and AECOM to 2022. In those roles Mr. Trotter
managed up to 400 plus staff across six continents supporting global operations with clients in multiple industries across private, semi-public
and public sectors. Mr. Trotter earned his BS Accounting from Virginia Tech in 1981 and his MBA from Virginia Commonwealth University
in 1994. He professional credentials are: Certified Public Accountant in Virginia; Certified Management Accountant; and Certified in Financial
Management.

 David M. Smith, Esq. — Vice President, General
Counsel and Secretary of the Company. Mr. Smith has served as our General Counsel and Secretary since November 2023. Mr.
Smith is a licensed attorney in Texas with over 40 years' experience in the legal field of oil and gas exploration and production,
manufacturing, purchase and sale agreements, exploration agreements, land and leaseholds, right of ways, pipelines, surface use, joint
operating agreements, joint interest agreements, participation agreements and operations as well as transactional and litigation experience
in oil and gas, real estate, bankruptcy and commercial industries. Mr. Smith purchased 142,500 shares as a founder. Mr. Smith has represented
a number of companies in significant oil and gas transactions, mergers and acquisitions, intellectual property research and development
and sales in the oil and gas drilling business sector. Mr. Smith began his career by serving in a land and legal capacity as Vice President
of Land and, subsequently, as President of a public Canadian company until beginning his legal practice as a partner with several law
firms and ultimately creating his own independent legal practice. Mr. Smith holds a degree in Finance from Texas A&M University, a
Doctor of Jurisprudence from South Texas College of Law and is licensed before the Texas Supreme Court.

 Joseph V. Salvucci, Sr. — Independent
Director and Chairman of the Board. Joseph V. Salvucci, Sr. has served as a member of our board of directors since December 2021.
JVS Alpha Property, LLC, an entity which the majority is beneficially owned by Mr. Salvucci, with the balance owned by his immediate
family, purchased 940,000 shares as a founder. Mr. Salvucci acquired PEAK Technical Staffing USA ("PEAK"), peaktechnical.com
in 1986 and has grown the business to be a premier provider of USA-based contract engineers and technical specialists, on assignment worldwide
through a comprehensive, customer focused, enterprise-wide Managed Staffing Solution. During his 35-year tenure as owner of the company,
PEAK has expanded from Pittsburgh to do business in all 50 States, Canada, Europe, South America, India, and the Philippines. He served
10 years on the board of directors culminating as President and Board Chairman of the National Technical Services Association, a
trade association representing 300,000 contractors on assignment in the technical staffing industry that later merged with the American
Staffing Association. He is an active member of the Young Presidents Organization (YPO GOLD), formerly known as the World Presidents Organization
(WPO) and has served as a member of the WPO International Board, as well as chairman of East Central US (ECUS) Region and Pittsburgh chapters
as Chairman of the Board. As a 1976 Civil Engineering graduate of the University of Pittsburgh, he was a member of the Triangle (Engineering)
Fraternity and its Alumni Association. He earned the Triangle Fraternity Distinguished Alumnus Citation in 2011 and currently serves on
the Board of Directors. After earning the rank of Eagle Scout in 1970, he has remained active with the Boy Scouts of America, having served
as the founding Chairman of the Board of the Pittsburgh Chapter of the National Eagle Scout Association, earning the NOESA (National Outstanding
Eagle Scout Award) and the Silver Beaver Award and is past VP of Development and a board member of the Laurel Highlands Council in Western
Pennsylvania. He was awarded the Manifesting the Kingdom of God Award by the Catholic Diocese of Pittsburgh in 2011. He was awarded the
"Big Mac Award" from the Ronald McDonald Charities. As well as earning his BS in Civil Engineering from the University of
Pittsburgh in 1976 and attended Harvard Business School's OPM 33, graduating in 2003.

 Joseph V. Salvucci, Jr. — Independent
Director. Joseph V. Salvucci, Jr. has served as a member of our board of directors since December 2021. Mr. Salvucci began
his career with PEAK Technical Staffing USA in November 2010 and is currently serving as the Chief Executive Officer overseeing nine
branches with several hundred employees, and managing strategic initiatives for the company, including Staff Training, Career Pathing,
and Organic Growth. Mr. Salvucci Jr received his Executive MBA from the University of Pittsburgh. In addition to his responsibilities
as President/COO of PEAK, Mr. Salvucci serves on the board of Temporary Services Insurance Limited, a Workers' Compensation
company serving staffing companies.

 Byron Blount — Independent
Director. Mr. Blount joined the board of directors and is the chair of the audit committee since November 2023. Mr. Blount has extensive
experience in finance, investments, and acquisitions. He was Managing Director for the Blackstone Real Estate Group from 2011 to 2021
where he: had Primary Asset Management responsibilities for several industries and portfolio companies; oversaw the onboarding of acquisitions
and establishment of Blackstone-affiliated portfolio companies; and had Primary Disposition responsibilities for several portfolios and
companies across several industries. Mr. Blount was the LXR/Blackstone Executive Vice President from 2005 to 2010. His primary responsibilities
involved: underwriting and acquisition of domestic and international property and mortgage loan portfolios; asset management; renovation
and reconstruction projects, debt, and business model restructuring; and dispute resolution. He was a Principal of Colony Capital from
1993 to 2004 and was responsible for sourcing and structuring new investments, consummating transactions valued in excess of $5 billion.
His Primary Acquisitions responsibilities included domestic and international acquisitions of real property, distressed mortgage debt,
and real estate-related assets and entities. From 1987 to 1992, Mr. Blount was Vice President of WSGP which was formed to capitalize on
the struggles of the US Savings and Loan industry and the FSLIC. He was responsible for structuring and managing/working out new investment
opportunities, generally acquired from failed financial institutions. He graduated from University of Southern California in 1982 with
a B.S. in Business Administration. Mr. Blount earned his MBA from University of Southern California's Marshall School of Business
in 1987 and is a member Beta Gamma Sigma (International Business Honor Society).

 Family Relationships

 There are no family relationships between any
of our officers and directors, except that Mr. Joseph V. Salvucci, Sr. and Mr. Joseph V. Salvucci, Jr. are father and son, respectively.

 Number and Terms of Office of Officers and Directors

 Our board of directors has five directors. Our
board of directors is divided into two classes with only one class of directors being elected in each year and each class (except for
those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. The class I directors consist of
Dante Caravaggio and Joseph V. Salvucci, Jr., and their term will expire at the annual meeting of stockholders in even-numbered years.
The class II directors consist of Mitchell Trotter, Byron Blount, and Joseph V. Salvucci, Sr. and their term will expire at the annual
meeting of stockholders in odd-numbered years.

 Our officers are elected by the board of directors
and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized
to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of
a Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other
offices as may be determined by the board of directors.

 Director Independence

 The NYSE American listing standards require that
a majority of our board of directors be independent. An "independent director" is defined generally as a person other than
an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company's
board of directors, would interfere with the director's exercise of independent judgment in carrying out the responsibilities of
a director. Of the current members of our board of directors, Messrs. Salvucci Sr., Salvucci Jr., and Byron Blount are each considered
an "independent director" under the NYSE American listing standards and applicable SEC rules. Our independent directors will
have regularly scheduled meetings at which only independent directors are present.

 Committees of the Board of Directors

 The standing committees of our Board of Directors
consist of an audit committee (the "Audit Committee"), a compensation committee (the "Compensation Committee"),
and a Nominating and Corporate Governance Committee (the "Nominating Committee"). The Audit Committee, Compensation Committee,
and the Nominating Committee report to the Board of Directors.

 Audit Committee

 The members of our Audit Committee are Messrs.
Blount and Salvucci Sr., and Mr. Blount serves as chairman of the Audit Committee. As a smaller reporting company under the NYSE
American listing standards, we are required to have at least two members on the Audit Committee. The rules of the NYSE American and Rule 10A-3
of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Each of Messrs.
Salvucci Sr. and Blount qualifies as an independent director under applicable rules. Each member of the Audit Committee is financially
literate and our board of directors has determined that Mr. Blount qualifies as an "audit committee financial expert" as defined
in applicable SEC rules.

 We have adopted an audit committee charter, which
details the principal functions of the audit committee, including:

 the appointment, compensation, retention, replacement, and oversight of the work of the independent registered accounting firm and any other independent registered public accounting firm engaged by us;

 pre-approving all audit and non-audit services to be provided by the independent registered accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

 reviewing and discussing with the independent registered accounting firm all relationships the auditors have with us in order to evaluate their continued independence;

 setting clear hiring policies for employees or former employees of the independent registered accounting firm;

 setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

 obtaining and reviewing a report, at least annually, from the independent registered accounting firm describing (i) the independent registered accounting firm's internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

 reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

 reviewing with management, the independent registered accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

 Compensation Committee

 The members of our Compensation Committee are
Messrs. Salvucci Sr., Salvucci, Jr., and Blount. Mr. Salvucci, Jr. serves as chairman of the Compensation Committee. Under the NYSE
American listing standards and applicable SEC rules, we are required to have at least two members on the Compensation Committee, all of
whom must be independent.

 We have adopted a compensation committee charter,
which details the principal functions of the compensation committee, including:

 reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer's compensation, evaluating our Chief Executive Officer's performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

 reviewing and approving the compensation of all of our other executive officers;

 reviewing our executive compensation policies and plans;

 implementing and administering our incentive compensation equity-based remuneration plans;

 assisting management in complying with our proxy statement and annual report disclosure requirements;

 approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

 producing a report on executive compensation to be included in our annual proxy statement; and

 reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

 The charter also provides that the Compensation
Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will
be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving
advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence
of each such adviser, including the factors required by the NYSE American and the SEC.

 Nominating and Corporate Governance Committee

 The members of our Nominating Committee are Messrs.
Blount, Salvucci Sr. and Salvucci Jr. Mr. Salvucci Jr. serves as chair of Nominating Committee.

 The primary purposes of our Nominating Committee
is to assist the board in:

 identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors;

 developing, recommending to the board of directors and overseeing implementation of our corporate governance guidelines;

 coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and

 reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.

 The Nominating Committee is
governed by a charter that complies with the rules of the NYSE American.

 A copy of each of our Nominating Committee Charter,
Compensation Committee Charter, and Audit Committee Charter are accessible at

 Director Nominations

 Our Nominating Committee will recommend to the
board of directors candidates for nomination for election at the annual meeting of the stockholders. The board of directors will also
consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to
stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

 We have not formally established any specific,
minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating
nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our
business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

 Compensation Committee Interlocks and Insider
Participation

 None of our future executive officers currently
serves, and in the past year has not served, as a member of the board of directors or compensation committee of any entity that has one
or more executive officers serving on our board of directors.

 Short Swing Profit Disgorgement

 Dante Caravaggio, our Chief Executive Officer,
has disbursed $[ ] to us in order for us to recapture short swing profits received by him when he sold shares and repurchased them for
a profit in 2025.

 Code of Ethics

 We have adopted a Code of Ethics applicable to
our directors, officers and employees. The Code of Ethics is available on our website accessible at  In
addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or
waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

 Insider Trading Policy

 Our board of directors has adopted
an Insider Trading Policy which prohibits trading based on "material, nonpublic information" regarding our company or any
company whose securities are listed for trading or quotation in the United States. The policy covers all officers and directors of the
company and its subsidiaries, all other employees of the company and its subsidiaries, and consultants or contractors to the company or
its subsidiaries who have or may have access to material non-public information and members of the immediate family or household of any
such person. The policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and Nasdaq listing
standards. The policy is filed as an exhibit to this Annual Report on Form 10-K.

 Clawback Policy

 Our board of directors has adopted
a clawback policy, which provides that in the event we are required to prepare an accounting restatement due to noncompliance with any
financial reporting requirements under the securities laws or otherwise erroneous data or we determine there has been a significant misconduct
that causes financial or reputational harm, we shall recover a portion or all of any incentive compensation. The policy is filed as an
exhibit to this Annual Report on Form 10-K.

 Timing of Option Awards

 We provide the following discussion of the timing
of option awards in relation to the disclosure of material nonpublic information, as required by Item 402(x) of Regulation S-K. We have
no policy or practice regarding option grant timing because we do not grant, and have not granted, options to our NEOs. We have not timed
the disclosure of material nonpublic information to affect the value of executive compensation. During 2024, we did not grant any stock
options to the NEOs during any period beginning four business days before the filing of a periodic report on Form 10-Q or Form 10-K or
the filing or furnishing of a current report on Form 8-K disclosing material non-public information (other than a current report on Form
8-K disclosing a material new stock option award under Item 5.02(e) of such Form 8-K), and ending one business day after the filing or
furnishing of such report with the SEC.

 Executive Officers

 Our executive officers are:

 Name

 Position

 Age

 Chief Executive Officer

 Chief Financial Officer

 General Counsel and Secretary

 Biographical information for these individuals is set forth above.

 Limitation on Liability and Indemnification of Officers and Directors

 Our Second A&R Charter provides that our officers
and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended.
In addition, our Second A&R Charter provides that our directors will not be personally liable for monetary damages to us for breaches
of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the
DGCL.

 Our bylaws also permit us to maintain insurance
on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law
would permit such indemnification. We have obtained a policy of directors' and officers' liability insurance that insures
our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against
our obligations to indemnify our officers and directors.

 These provisions may discourage stockholders from
bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the
likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit
us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement
and damage awards against officers and directors pursuant to these indemnification provisions.

 We believe that these provisions, the directors'
and officers' liability insurance and the indemnification agreements are necessary to attract and retain talented and experienced
officers and directors.

 Section 16(a) Beneficial Ownership Reporting
Compliance

 Section 16(a) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more than 10%
of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of our shares of common stock and other equity securities. These executive officers, directors, and greater than
10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons.

 Based solely on our review of such forms furnished
to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive
officers, directors and greater than 10% beneficial owners were filed in a timely manner, except for: (i) one late Form 4 filing for Joseph
Salvucci, Jr., (ii) two late Form 4 filings for Dante Caravaggio (which one such filing has not been made as of the date of this Annual
Report on Form 10-K, and (iii) one late Form 4 filing for Byron Blount.

 ITEM 11. EXECUTIVE COMPENSATION

 Summary Compensation Table

 The following table sets forth information regarding
compensation earned during the years ended December 31, 2024 and 2023 by our principal executive officers and our two other most highly
compensated executive officers as of the end of December 31, 2024 ("NEOs").

 (a)

 (b)

 (c)

 (d)

 (e)

 (f)

 (g)

 (h)

 (i)

 (j)

 Name and Principal Position

 Year

 Salary

 Bonus

 Stock Awards (1)

 Option Awards (2)

 Non-equity Incentive plan compensation

 Nonqualified deferred compensation earnings

 All other compensation

 Total

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 2024

 104,000

 -

 96,000

 118,285

 -

 146,000

 20,100

 484,385

 Chief Executive Officer and President

 2023

 4,000

 -

 -

 -

 -

 6,417

 -

 10,417

 2024

 104,000

 -

 96,000

 78,857

 -

 146,000

 4,448

 429,305

 Chief Financial Officer

 2023

 12,000

 -

 -

 -

 -

 19,250

 -

 31,250

 2024

 104,000

 -

 96,000

 78,857

 -

 146,000

 20,100

 444,957

 General Counsel and Secretary

 2023

 12,000

 -

 -

 -

 -

 19,250

 -

 31,250

 (1)

 The fair value of the stock awards to Messrs. Caravaggio, Trotter and Smith were based on the closing price of the Company's Class A Common Stock on March 4, 2024 in accordance with FASB ASC 718.

 (2)

 The fair value of the option awards to Messrs. Caravaggio, Trotter and Smith were estimated under FASB ASC 718 using a Black-Scholes Option Pricing Model and the following assumptions: (1) expected volatility of 110.42% based on a group of comparable peer companies; (2) an exercise price of $2.02; (3) a stock price of $2.02 based on the closing price of the Company's Class A Common Stock on the grant date of March 12, 2024; (4) an expected term of 4.5 years; (5) a risk-free rate of 4.26%; and (6) a dividend rate of 0%.

 Narrative Disclosures Regarding Compensation;
Employment Agreements

 None of our NEOs received any cash compensation
prior to the Closing of the Purchase on November 15, 2023, other than the $10,000 per month, including the deferred payments, administrative
fee for office space, utilities, secretarial and administrative services, and the reimbursement for out-of-pocket expenses paid to
Rh ne Merchant Resources Inc., and $5,000 per month paid to Donald W. Orr, no compensation or fees of any kind was paid to the Sponsor,
or members of our management team or their respective affiliates, for services rendered prior to or in connection with the consummation
of our initial business combination.

 Effective December 18, 2023, we entered into an
employment agreement (the "Caravaggio Employment Agreement") with Dante Caravaggio, pursuant to which he serves as our Chief
Executive Officer, President, and a member of our board of directors. The Caravaggio Employment Agreement is on our standard form for
executives, and provides that we pay to Mr. Caravaggio an annual base salary of $250,000. In addition, we agreed to issue a one-time Equity
Sign-On Incentive to Mr. Caravaggio under the 2023 HNR Acquisition Corp Omnibus Incentive Plan (the "2023 Plan"), which consists
of restricted stock units ("RSUs"), equal to 200% of base salary divided by $10 (i.e. 50,000 RSUs), subject to time-based
vesting as follows: 1/3 on the first anniversary of the date of grant, 1/3 on the second anniversary of the date of grant, and 1/3 on
the third anniversary of the date of grant, so long as Mr. Caravaggio continues to provide service through such vesting date. As
of December 31, 2023, the RSUs had not yet been granted to Mr. Caravaggio. Mr. Caravaggio will be permitted to participate in any broad-based
retirement, health and welfare plans that will be offered to all of our employees.

 Pursuant to the Caravaggio Employment Agreement,
if we terminate Mr. Caravaggio's employment without Cause (as defined in the Caravaggio Employment Agreement) or Mr. Caravaggio
terminates his employment for Good Reason (as defined in the Caravaggio Employment Agreement), then Mr. Caravaggio will be entitled to:
(i) any accrued obligations as of the date of termination, including base salary, PTO and holidays, and continued benefits required by
our employee benefit plans; (ii) continued base salary for 12 months following the date of termination, paid in accordance with our payroll
practices; (iii) the total monthly cost of coverage for Mr. Caravaggio and his covered dependents under COBRA, if elected; and (iv) full
vesting in all equity grants as of the date of termination. To receive such severance benefits, Mr. Caravaggio will be required to execute
a non-competition agreement, non-solicitation agreement, or confidentiality agreement or invention assignment agreement and release of
claims.

 Effective November 15, 2023, we entered into an
employment agreement (the "Trotter Employment Agreement") with Mitchell B. Trotter, pursuant to which he serves as our Chief
Financial Officer and a member of our board of directors. The Trotter Employment Agreement is on our standard form for executives, and
provides that we pay to Mr. Trotter an annual base salary of $250,000. In addition, we agreed to issue a one-time Equity Sign-On Incentive
to Mr. Trotter under the 2023 Plan, which consists of RSUs equal to 200% of base salary divided by $10 (i.e. 50,000 RSUs), subject to
time-based vesting as follows: 1/3 on the first anniversary of the date of grant, 1/3 on the second anniversary of the date of grant,
and 1/3 on the third anniversary of the date of grant so long as Mr. Trotter continues to provide service through such vesting date.
As of December 31, 2023, the RSUs had not yet been granted to Mr. Trotter. Mr. Trotter will be permitted to participate in any broad-based
retirement, health and welfare plans that will be offered to all of our employees.

 Pursuant to the Trotter Employment Agreement,
if we terminate Mr. Trotter's employment without Cause (as defined in the Trotter Employment Agreement) or Mr. Trotter terminates
his employment for Good Reason (as defined in the Trotter Employment Agreement), then Mr. Trotter will be entitled to: (i) any accrued
obligations as of the date of termination, including base salary, PTO and holidays, and continued benefits required by our employee benefit
plans; (ii) continued base salary for 12 months following the date of termination, paid in accordance with our payroll practices; (iii)
the total monthly cost of coverage for Mr. Trotter and his covered dependents under COBRA, if elected; and (iv) full vesting in all equity
grants as of the date of termination. To receive such severance benefits, Mr. Trotter will be required to execute a non-competition agreement,
non-solicitation agreement, or confidentiality agreement or invention assignment agreement and release of claims.

 Effective November 15, 2023, we entered into
an employment agreement (the "Smith Employment Agreement") with David M. Smith, pursuant to which he serves as our
General Counsel and Secretary. The Smith Employment Agreement is on our standard form for executives, and provides that we pay to
Mr. Smit Pursuant to the Smith Employment Agreement, if we terminate Mr. Smith's employment without Cause (as defined in
the Smith Employment Agreement) or Mr. Smith terminates his employment for Good Reason (as defined in the Smith Employment
Agreement), then Mr. Smith will be entitled to: (i) any accrued obligations as of the date of termination, including base salary,
PTO and holidays, and continued benefits required by our employee benefit plans; (ii) continued base salary for 12 months following
the date of termination, paid in accordance with our payroll practices; (iii) the total monthly cost of coverage for Mr. Smith and
his covered dependents under COBRA, if elected; and (iv) full vesting in all equity grants as of the date of termination. To receive
such severance benefits, Mr. Smith will be required to execute a non-competition agreement, non-solicitation agreement, or
confidentiality agreement or invention assignment agreement and release of claims.

 Compensation Advisor

 The Compensation Committee
retained Pearl Meyer & Partners, LLC ("Pearl Meyer"), a compensation consulting firm, to assist it in evaluating
the elements and levels of our executive compensation, including base salaries, annual cash incentive awards and equity-based incentives
for our executive officers, consultant, and directors. In November 2022, the Compensation Committee determined that Pearl Meyer is
independent from management and that Pearl Meyer's work has not raised any conflicts of interest. Pearl Meyer reports directly to
the Compensation Committee and the Compensation Committee has the sole authority to approve Pearl Meyer's compensation and may terminate
the relationship at any time.

 Outstanding Equity Awards at Fiscal Year End

 The following table sets forth
information regarding the outstanding equity awards held by our Named Executive Officers as of December 31, 2024:

 Option Awards

 Stock Awards

 Name

 Securities
 Underlying
 Unexercised
 Options
 (#)
 Exercisable

 Securities
 Underlying
 Unexercised
 Options
 (#)
 Unexercisable

 Equity
 Incentive
 Plan
 Awards:
 Securities
 Underlying
 Unexercised
 Unearned
 Options
 (#)

 Exercise
 Price
 ($)

 Expiration
 Date

 Shares or
 Units of
 Stock
 That Have
 Not Vested
 (#)

 Market
 Value of
 Shares or
 Units of
 Stock
 That Have
 Not Vested
 ($)

 Equity
 Incentive
 Plan
 Awards:
 Unearned
 Shares,
 Units or
 Other
 Rights
 That Have
 Not Vested
 (#)

 Equity
 Incentive
 Plan
 Awards:
 Market
 or Payout
 Value of
 Unearned
 Shares,
 Units or
 Other
 Rights That
 Have Not
 Vested
 ($)

 -

 -

 75,000

 2.02

 March 11,
 2034

 -

 -

 33,333

 $
 27,333

 -

 -

 50,000

 2.02

 March 11, 2034

 -

 -

 33,333

 $
 27,333

 -

 -

 50,000

 2.02

 March 11, 2034

 -

 -

 33,333

 $
 27,333

 Donald W. Orr

 -

 -

 -

 -

 -

 -

 -

 -

 $
 -

 Donald H. Goree

 -

 -

 -

 -

 -

 -

 -

 -

 $
 -

 Option Re-pricings

 We have not engaged in any option re-pricings
or other modifications to any of our outstanding equity awards to our NEOs during fiscal years 2024 and 2023.

 Payments Upon Termination or Change in Control

 None of our NEOs are entitled to receive payments
or other benefits upon termination of employment or a change in control.

 Retirement Plans

 We do not maintain any deferred compensation,
retirement, pension or profit-sharing plans.

 Employee Benefits

 All of our full-time employees are eligible to
participate in health and welfare plans maintained by us, including:

 medical, dental and vision benefits; and

 basic life and accidental death & dismemberment insurance.

 Our NEOs participate in these plans on the same
basis as other eligible employees. We do not maintain any supplemental health and welfare plans for our NEOs.

 Nonqualified Deferred Compensation

 During the years ended December 31, 2024 and 2023,
our NEOs deferred a portion of their salaries not paid by us during the years 2024 and 2023, as disclosed in the table above. Such payments
were deferred because timely payments further jeopardize our ability to continue as a going concern. We intend to make such payments as
soon as we are able.

 Omnibus Equity Incentive Plan

 On November 15, 2023, we adopted the 2023 Plan,
the material terms of which are described below.

 Purpose and Eligibility. The
purpose of the 2023 Plan is (i) to provide eligible persons with an incentive to contribute to our success and to operate and manage
our business in a manner that will provide for our long-term growth and profitability and that will benefit our stockholders and
other important stakeholders, including our employees and customers, and (ii) to provide a means of recruiting, rewarding, and retaining
key personnel.

 Equity awards may be granted under the 2023 Plan
to officers, directors, including non-employee directors, other employees, advisors, consultants or other service providers of the
company or our subsidiaries or other affiliates, and to any other individuals who are approved by the Compensation Committee as eligible
to participate in the 2023 Plan. Only our employees or employees of our corporate subsidiaries are eligible to receive incentive stock
options.

 Effective Date and Term. The 2023 Plan
is effective as of November 15, 2023 and will terminate automatically at 11:59PM ET on the day before the 10 th anniversary
of the such date, unless earlier terminated by our board of directors or in accordance with the terms of the 2023 Plan.

 Administration, Amendment and
Termination. The 2023 Plan will generally be administered by the Compensation Committee. Except where the authority to act on
such matters is specifically reserved to the full board of directors under the 2023 Plan or applicable law, the Compensation
Committee will have full power and authority to interpret and construe all provisions of the 2023 Plan, any award, and any award
agreement, and take all actions and to make all determinations required or provided for under the 2023 Plan, any award, and any
award agreement, including the authority to:

 designate grantees of awards;

 determine the type or types of awards to be made to a grantee;

 determine the number of shares of Class A Common Stock subject to an award or to which an award relates;

 establish the terms and conditions of each award;

 prescribe the form of each award agreement;

 subject to limitations in the 2023 Plan (including the prohibition on repricing of options or share appreciation rights without stockholder approval), amend, modify, or supplement the terms of any outstanding award; and

 make substitute awards.

 Our board of directors is also authorized to appoint
one or more committees of the board of directors consisting of one or more directors who need not meet the independence requirements under
the listing rules of any stock exchange on which Class A Common Stock is listed for certain limited purposes permitted by the 2023 Plan,
and to the extent permitted by applicable law, the Compensation Committee is authorized to delegate authority to the Chief Executive Officer
and/or any other officers of the company for certain limited purposes permitted by the 2023 Plan. Our board of directors will retain the
authority under the 2023 Plan to exercise any or all of the powers and authorities related to the administration and implementation of
the 2023 Plan.

 Our board of directors may amend, suspend, or
terminate the 2023 Plan at any time; provided that with respect to awards that are granted under the 2023 Plan, no amendment, suspension
or termination may materially impair the rights of the award holder without such holder's consent. No such action may amend the
2023 Plan without the approval of stockholders if the amendment is required to be submitted for stockholder approval by our board of directors,
the terms of the 2023 Plan, or applicable law.

 Awards. Awards under the 2023
Plan may be made in the form of:

 stock options, which may be either incentive stock options or nonqualified stock options;

 stock appreciation rights or "SARs";

 restricted stock;

 restricted stock units;

 dividend equivalent rights;

 performance awards, including performance shares;

 other equity-based awards; or

 cash.

 An incentive stock option is an option that meets
the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and a nonqualified stock
option is an option that does not meet those requirements. A SAR is a right to receive upon exercise, in the form of stock, cash or a
combination of stock and cash, the excess of the fair market value of one share on the exercise date over the exercise price of the SAR. Restricted
stock is an award of common stock subject to restrictions over restricted periods that subject the shares to a substantial risk of forfeiture,
as defined in Section 83 of the Code. A restricted stock unit or deferred stock unit is an award that represents a conditional right
to receive shares in the future and that may be made subject to the same types of restrictions and risk of forfeiture as restricted stock.
Dividend equivalent rights are awards entitling the grantee to receive cash, shares, other awards under the 2023 Plan or other property
equal in value to dividends or other periodic payments paid or made with respect to a specified number of shares of stock. Performance
awards are awards made subject to the achievement of one or more performance goals over a performance period established by the Compensation
Committee. Other equity-based awards are awards representing a right or other interest that may be denominated or payable in, valued
in whole or in part by reference to, or otherwise based on or related to stock, other than an option, SAR, restricted stock, restricted
stock unit, unrestricted stock, dividend equivalent right, or a performance award.

 The 2023 Plan provides that each award will be
evidenced by an award agreement, which may specify terms and conditions of the award that differ from the terms and conditions that would
otherwise apply under the 2023 Plan in the absence of the different terms and conditions in the award agreement. In the event of any inconsistency
between the 2023 Plan and an award agreement, the provisions of the 2023 Plan will control.

 Awards under the 2023 Plan may be granted alone
or in addition to, in tandem with, or in substitution or exchange for any other award under the 2023 Plan, other awards under another
compensatory plan of the company or any of our affiliates (or any business entity that has been a party to a transaction with the company
or any of our affiliates), or other rights to payment from the company or any of our affiliates. Awards granted in addition to or in tandem
with other awards may be granted either at the same time or at different times.

 The Compensation Committee may permit or require
the deferral of any payment pursuant to any award into a deferred compensation arrangement, which may include provisions for the payment
or crediting of interest or dividend equivalent rights, in accordance with rules and procedures established by the Compensation Committee.
Awards under the 2023 Plan generally will be granted for no consideration other than past services by the grantee of the award or, if
provided for in the award agreement or in a separate agreement, the grantee's promise to perform future services to the company
or one of our subsidiaries or other affiliates.

 Forfeiture; Recoupment. We may reserve
the right in an award agreement to cause a forfeiture of the gain realized by a grantee with respect to an award on account of actions
taken by, or failed to be taken by, such grantee in violation or breach of, or in conflict with, any employment agreement, non-competition agreement,
agreement prohibiting solicitation of employees or clients of the company or any affiliate, confidentiality obligations with respect to
the company or any affiliate, or otherwise in competition with the company or any affiliate, to the extent specified in such award agreement.
If the grantee is an employee and is terminated for "Cause" (as defined in the 2023 Plan), the Compensation Committee may
annul the grantee's award as of the date of the grantee's termination.

 In addition, any award granted pursuant to the
2023 Plan will be subject to mandatory repayment by the grantee to the company to the extent (i) set forth in the 2023 Plan or in
an award agreement, or (ii) the grantee is or becomes subject to our clawback policy, or any applicable laws which impose mandatory
recoupment.

 Shares Subject to the 2023 Plan. Subject
to adjustment as described below, the maximum number of shares of common stock reserved for issuance under the 2023 Plan is equal to 1,400,000 shares
of Class A Common Stock. The maximum number of shares of Class A Common Stock available for issuance pursuant to incentive stock
options granted under the 2023 Plan will be the same as the total number of shares of Class A Common Stock reserved for issuance under
the 2023 Plan. Shares issued under the 2023 Plan may be authorized and unissued shares, or treasury shares, or a combination of the foregoing.

 Any shares covered by an award, or portion of
an award, granted under the 2023 Plan that are not purchased or forfeited or canceled, or expire or otherwise terminate without the issuance
of shares or are settled in cash in lieu of shares, will again be available for issuance under the 2023 Plan.

 Shares subject to an award granted under the 2023
Plan will be counted against the maximum number of shares reserved for issuance under the 2023 Plan as one share for every one share subject
to such an award. In addition, at least the target number of shares of stock issuable under a performance award will be counted against
the maximum number of shares reserved for issuance under the 2023 Plan as of the grant date, but such number will be adjusted to equal
the actual number of shares of stock issued upon settlement of the performance award to the extent different from such number initially
counted against the share reserve.

 The number of shares available for issuance under
the 2023 Plan will not be increased by the number of shares of Class A Common Stock: (i) tendered or withheld or subject to an award
surrendered in connection with the purchase of shares upon exercise of an option; (ii) that were not issued upon the net settlement
or net exercise of a stock-settled SAR, (iii) deducted or delivered from payment of an award in connection with our tax withholding
obligations; or (iv) purchased by us with proceeds from option exercises.

 Options. The 2023 Plan authorizes
the Compensation Committee to grant incentive stock options (under Section 422 of the Code) and options that do not qualify as incentive
stock options. An option granted under the 2023 Plan will be exercisable only to the extent that it is vested. Each option will become
vested and exercisable at such times and under such conditions as the Compensation Committee may approve consistent with the terms of
the 2023 Plan. No option may be exercisable more than ten years after the option grant date, or five years after the option
grant date in the case of an incentive stock option granted to a "ten percent stockholder" (as defined in the 2023 Plan);
provided that, to the extent deemed necessary or appropriate by the Compensation Committee to reflect differences in local law, tax policy,
or custom with respect to any option granted to a grantee who is a foreign national or is a natural person who is employed outside of
the United States, such option may terminate, and all rights to purchase shares of stock thereunder may cease, upon the expiration
of a period longer than ten (10) years from the date of grant of such option as the Compensation Committee shall determine. The Compensation
Committee may include in the option agreement provisions specifying the period during which an option may be exercised following termination
of the grantee's service. The exercise price of each option will be determined by the Compensation Committee, provided that the
per share exercise price will be equal to or greater than 100% of the fair market value of a share of Class A Common Stock on the grant
date (other than as permitted for substitute awards). If we were to grant incentive stock options to any ten percent stockholder, the
per share exercise price will not be less than 110% of the fair market value of a share of Class A Common Stock on the grant date.

 Incentive stock options and nonqualified stock
options are generally non-transferable, except for transfers by will or the laws of descent and distribution. The Compensation Committee
may, in its discretion, determine that a nonqualified stock option may be transferred to family members by gift or other transfers deemed
not to be for value.

 Share Appreciation Rights. The 2023 Plan
authorizes the Compensation Committee to grant SARs that provide the recipient with the right to receive, upon exercise of the SAR, cash,
Class A Common Stock, or a combination of the two. The amount that the recipient will receive upon exercise of the SAR generally will
equal the excess of the fair market value of shares of Class A Common Stock on the date of exercise over the fair market value of shares
of Class A Common Stock on the grant date. SARs will become exercisable in accordance with terms determined by the Compensation Committee.
SARs may be granted in tandem with an option grant or independently from an option grant. The term of a SAR cannot exceed ten (10) years
from the date of grant. The per share exercise price of a SAR will be no less than the fair market value of one share of Class A Common
Stock on the grant date of such SAR.

 SARs will be nontransferable, except for transfers
by will or the laws of descent and distribution. The Compensation Committee may determine that all or part of a SAR may be transferred
to certain family members of the grantee by gift or other transfers deemed not to be for value.

 Fair Market Value. For so long
as the Class A Common Stock remains listed on NYSE American, the fair market value of the Class A Common Stock on an award's grant
date, or on any other date for which fair market value is required to be established under the 2023 Plan, will be the closing price of
the Class A Common Stock as reported on NYSE American on such date. If there is no such reported closing price on such date, the fair
market value of the Class A Common Stock will be the closing price of the Class A Common Stock as reported on such market on the next
preceding date on which any sale of Class A Common Stock will have been reported.

 If the Class A Common Stock ceases to be listed
on NYSE American and is listed on another established national or regional stock exchange, or traded on another established securities
market, fair market value will similarly be determined by reference to the closing price of the Class A Common Stock on the applicable
date as reported on such other stock exchange or established securities market.

 If the Class A Common Stock ceases to be listed
on NYSE American or another established national or regional stock exchange, or traded on another established securities market, the Compensation
Committee will determine the fair market value of the Class A Common Stock by the reasonable application of a reasonable valuation method
in a manner consistent with Section 409A of the Code.

 No Repricing. Except in connection
with a corporate transaction involving the company (including, without limitation, any stock dividend, distribution (whether in the form
of cash, shares of stock, other securities or other property), stock split, extraordinary dividend, recapitalization, change in control,
reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of stock or other securities
or similar transaction), we may not, without obtaining stockholder approval, (a) amend the terms of outstanding options or SARs to
reduce the exercise price of such outstanding options or SARs, (b) cancel outstanding options or SARs in exchange for, or in substitution
of, options or SARs with an exercise price that is less than the exercise price of the original options or SARs, (c) cancel outstanding
options or SARs with an exercise price above the current price of Class A Common Stock in exchange for cash or other securities, in each
case, unless such action is (i) subject to and approved by our stockholders or (ii) would not be deemed to be a repricing under
the rules of any stock exchange or securities market on which the Class A Common Stock is listed or publicly traded.

 Restricted Stock; Restricted Stock Units. The
2023 Plan authorizes the Compensation Committee to grant restricted stock and restricted stock units. Subject to the provisions of the
2023 Plan, the Compensation Committee will determine the terms and conditions of each award of restricted stock and restricted stock units,
including the restricted period for all or a portion of the award, the restrictions applicable to the award, and the purchase price, if
any, for the shares of stock subject to the award. The restrictions, if any, may lapse over a specified period of time or through the
satisfaction of conditions, in installments or otherwise, as the Compensation Committee may determine. A grantee of restricted stock will
have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote the shares and receive dividends
or distributions on the shares, except to the extent limited by the Compensation Committee. The Compensation Committee may provide in
an award agreement evidencing a grant of restricted stock that (a) cash dividend payments or distributions paid on restricted stock
will be reinvested in shares of stock, which may or may not be subject to the same vesting conditions and restrictions as applicable to
such shares of restricted stock or (b) any dividend payments or distributions declared or paid on shares of restricted stock will
only be made or paid upon satisfaction of the vesting conditions and restrictions applicable to such shares of restricted stock. Dividend
payments or distributions declared or paid on shares of restricted stock which vest or are earned based on upon the achievement of performance
goals will not vest unless such performance goals for such shares of restricted stock are achieved, and if such performance goals are
not achieved, the grantee of such shares of restricted stock will promptly forfeit and, to the extent already paid or distributed, repay
to us such dividend payments or distributions. Grantees of restricted stock units and deferred stock units will have no voting or dividend
rights or other rights associated with share ownership, although the Compensation Committee may award dividend equivalent rights on such
units.

 During the restricted period, if any, when restricted
stock and restricted stock units are non-transferable or forfeitable, a grantee is prohibited from selling, transferring, assigning,
pledging, exchanging, hypothecating, or otherwise encumbering or disposing of the grantees' restricted stock and restricted stock
units.

 Dividend Equivalent Rights. The 2023 Plan
authorizes the Compensation Committee to grant dividend equivalent rights. Dividend equivalent rights may be granted independently or
in connection with the grant of any equity-based award, except that no dividend equivalent right may be granted in connection with,
or related to an option or SAR. Dividend equivalent rights may be paid currently (with or without being subject to forfeiture or
a repayment obligation) or may be deemed to be reinvested in additional shares of stock or awards which may thereafter accrue additional
dividend equivalent rights (with or without being subject to forfeiture or a repayment obligation) and may be payable in cash, common
shares, or a combination of the two. Dividend equivalent rights granted as a component of another award may (a) provide that such
dividend equivalent right will be settled upon exercise, settlement, or payment of, or lapse of restriction on, such other award and that
such dividend equivalent will expire or be forfeited or annulled under the same conditions as such award or (b) contain terms and
conditions which are different from the terms and conditions of such other award, provided that dividend equivalent rights credited pursuant
to a dividend equivalent right granted as a component of another award which vests or is earned based on the achievement of performance
goals will not vest unless such performance goals for such underlying award are achieved, and if such performance goals are not achieved,
the grantee of such dividend equivalent right will promptly forfeit and, to the extent already paid or distributed, repay to us payments
or distributions made in connection with such dividend equivalent rights.

 Performance Awards. The
2023 Plan authorizes the Compensation Committee to grant performance awards. The Compensation Committee will determine the applicable
performance period, the performance goals, and such other conditions that apply to the performance award. Any performance measures may
be used to measure the performance of the company and our subsidiaries and other affiliates as a whole or any business unit of the company,
our subsidiaries, and/or our affiliates or any combination thereof, as the Compensation Committee may deem appropriate, or any performance
measures as compared to the performance of a group of comparable companies, or published or special index that the Compensation Committee
deems appropriate. Performance goals may relate to our financial performance or the financial performance of our operating units, the
grantee's performance, or such other criteria determined by the Compensation Committee. If the performance goals are met, performance
awards will be paid in cash, shares of stock, other awards, or a combination thereof.

 Other Equity-Based Awards. The
2023 Plan authorizes the Compensation Committee to grant other types of stock-based awards under the 2023 Plan. The terms and conditions
that apply to other equity-based awards are determined by the Compensation Committee.

 Forms of Payment. The exercise price for
any option or the purchase price (if any) for restricted stock, and vested restricted stock units is generally payable (i) in cash
or in cash equivalents acceptable to the company, (ii) to the extent the award agreement provides, by the tender (or attestation
of ownership) of shares of Class A Common Stock having a fair market value on the date of tender (or attestation) equal to the exercise
price or purchase price, (iii) to the extent permitted by law and to the extent permitted by the award agreement, through a broker-assisted cashless
exercise, or (iv) to the extent the award agreement provides and/or unless otherwise specified in an award agreement, any other form
permissible by applicable law, including net exercise or net settlement and service rendered to us or our affiliates.

 Change in Capitalization. The Compensation
Committee may adjust the terms of outstanding awards under the 2023 Plan to preserve the proportionate interests of the holders
in such awards on account of any recapitalization, reclassification, share split, reverse share split, spin-off, combination of share,
exchange of shares, share dividend or other distribution payable in capital shares, or other increase or decrease in such shares effected
without receipt of consideration by the company. The adjustments will include proportionate adjustments to (i) the number and kind
of shares subject to outstanding awards and (ii) the per share exercise price of outstanding options or SARs.

 Transaction not Constituting a Change in Control.
 If the company is the surviving entity in any reorganization, merger, or consolidation with one or more other entities which does
not constitute a "change in control" (as defined in the 2023 Plan), any awards will be adjusted to pertain to and apply to
the securities to which a holder of the number of common shares subject to such award would have been entitled immediately after such
transaction, with a corresponding proportionate adjustment to the per share price of options and SARs so that the aggregate price per
share of each option or SAR thereafter is the same as the aggregate price per share of each option or SAR subject to the option or SAR
immediately prior to such transaction. Further, in the event of any such transaction, performance awards (and the related performance
measures if deemed appropriate by the Compensation Committee) will be adjusted to apply to the securities that a holder of the number
of Class A Common Stock subject to such performance awards would have been entitled to receive following such transaction.

 Effect of a Change in Control in which Awards
are not Assumed. Except as otherwise provided in the applicable award agreement, in another agreement with the grantee, or as otherwise
set forth in writing, upon the occurrence of a change in control in which outstanding awards are not being assumed or continued, the following
provisions will apply to such awards, to the extent not assumed or continued:

 Immediately prior to the occurrence of such change in control, in each case with the exception of performance awards, all outstanding shares of restricted stock and all restricted stock units, and dividend equivalent rights will be deemed to have vested, and all shares of stock and/or cash subject to such awards will be delivered; and either or both of the following two actions will be taken:

 At least 15 days prior to the scheduled consummation of such change in control, all options and SARs outstanding will become immediately exercisable and will remain exercisable for a period of 15 days. Any exercise of an option or SAR during this 15-day period will be conditioned on the consummation of the applicable change in control and will be effective only immediately before the consummation thereof, and upon consummation of such change in control, the 2023 Plan and all outstanding but unexercised options and SARs will terminate, with or without consideration as determined by the Compensation Committee in its sole discretion; and/or

 The Compensation Committee may elect, in its sole discretion, to cancel any outstanding awards of options, SARs, restricted stock, restricted stock units, and/or dividend equivalent rights and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or capital stock having a value (as determined by the Compensation Committee acting in good faith), in the case of restricted stock, restricted stock units, deferred stock units, and dividend equivalent rights (for shares of stock subject thereto), equal to the formula or fixed price per share paid to holders of shares of stock pursuant to such change in control and, in the case of options or SARs, equal to the product of the number of shares of stock such subject to such options or SARs multiplied by the amount, if any, which (i) the formula or fixed price per share paid to holders of shares of stock pursuant to such change in control exceeds (ii) the option price or SAR price applicable to such options or SARs.

 For performance awards, if less than half of the performance period has lapsed, such awards will be treated as though the target performance thereunder has been achieved. If at least half of the performance period has lapsed, such performance awards will be earned, as of immediately prior to but contingent on the occurrence of such change in control, based on the greater of (i) deemed achievement of target performance or (ii) determination of actual performance as of a date reasonably proximate to the date of consummation of the change in control as determined by the Compensation Committee, in its sole discretion.

 Other Equity-Based Awards will be governed by the terms of the applicable award agreement.

 Effect of a Change in Control in which Awards
are Assumed. Except as otherwise provided in the applicable award agreement, in another agreement with the grantee, or
as otherwise set forth in writing, upon the occurrence of a change in control in which outstanding awards are being assumed or continued,
the following provisions will apply to such awards, to the extent not assumed or continued: The 2023 Plan and the options, SARs, restricted
stock, restricted stock units, dividend equivalent rights, and other equity-based equity awards granted under the 2023 Plan will
continue in the manner and under the terms so provided in the event of any change in control to the extent that provision is made in writing
in connection with such change in control for the assumption or continuation of such awards, or for the substitution for such awards of
new options, SARs, restricted stock, restricted stock units, dividend equivalent rights, and other equity-based awards relating to
the capital stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustment as to the number of shares and
exercise price of options and SARs.

 In general, a "change in control"
means:

 a transaction or series of related transactions whereby a person or group (other than the company or any of our affiliates) becomes the beneficial owner of 50% or more of the total voting power of the our voting stock on a fully diluted basis;

 individuals who constitute the our board of directors, cease to constitute a majority of the members of our board of directors then in office;

 a merger or consolidation of the company, other than any such transaction in which the holders of our voting stock immediately prior to the transaction own directly or indirectly at least a majority of the voting power of the surviving entity immediately after the transaction;

 a sale of substantially all of our assets to another person or entity; or

 the consummation of a plan or proposal for the dissolution or liquidation of the company.

 Compensation of Directors

 The following Director Compensation
Table sets forth information concerning compensation for services rendered by our independent directors for fiscal year 2024.

 Name

 Fees
 Earned
 or Paid
 in Cash
 ($)

 Stock
 Awards
 ($)

 Awards
 ($)

 All Other
 Compensation
 ($)

 Total
 ($)

 Byron Blount (1)

 $
 125,000

 $
 139,200

 $
 -

 $
 5,025

 $
 369,225

 Joseph Salvucci, Jr. (2)

 110,000

 143,040

 -

 -

 253,040

 Joseph Salvucci, Sr. (3)

 100,000

 148,800

 -

 -

 248,800

 Total:

 $
 335,000

 $
 431,040

 $
 -

 $
 5,025

 $
 771,065

 (1)

 Mr. Blount was appointed to serve as a member of the Board of Directors in November 2023.

 (2)

 Mr. Salvucci, Jr. was appointed to serve as a member of the Board of Directors in December 2021.

 (3)

 Mr. Salvucci, Sr. was appointed to serve as a member of the Board of Directors in December 2021.

 Messrs. Caravaggio and Trotter have not been included
in the Director Compensation Table because there were NEOs of our company for all of our 2024 fiscal year, and all compensation paid to
or earned by each of them during our 2024 fiscal year is reflected in the Summary Compensation Table above.

 Director Compensation Program

 We believe that attracting and retaining qualified
directors is critical to our ability to grow in a manner that is consistent with our corporate governance principles and that is designed
to create value for stockholders. We also believe that structuring director compensation with a significant equity component is key to
achieving our goals. We believe that this structure will also allow directors to carry out their responsibilities with respect to oversight
of the Company while also maintaining alignment with stockholder interests and fiduciary obligations. We anticipate that embedding these
core principles and values of alignment and solid governance will enhance our ability to grow and unlock value for stockholders. We have
implemented a director compensation policy for our non-employee directors, which consists of:

 An annual retainer for non-employee directors of $75,000;

 An annual grant for non-employee directors of RSUs, calculated by dividing $75,000 by the then current-stock price, which will vest on the first anniversary of the grant;

 An additional annual retainer payment of $50,000 to the Chairman; $25,000 to the Chair of the Audit Committee; $20,000 to the Chair of the Compensation Committee; and $15,000 to the Chair of the Nominating Committee.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The following table sets forth information known
to us regarding the beneficial ownership of Class A Common Stock as of March 31, 2025 by:

 each person who is the beneficial owner of more than 5% of the outstanding shares of Class A Common Stock;

 each of the Company's named executive officers and directors; and

 all of the Company's executive officers and directors as a group.

 Beneficial ownership is determined according to
the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or
shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the individual
or entity has the right to acquire, such as through the exercise of warrants or stock options or the vesting of restricted stock units,
within 60 days of March 31, 2025. Shares subject to warrants or options that are currently exercisable or exercisable within 60 days of
March 31, 2025 or subject to restricted stock units that vest within 60 days of March 31, 2025 are considered outstanding and beneficially
owned by the person holding such warrants, options or restricted stock units for the purpose of computing the percentage ownership of
that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Shares issuable
pursuant to the exchange of OpCo Class B Units listed in the table below are represented in shares of Class A Common Stock.

 Except as described in the footnotes below and
subject to applicable community property laws and similar laws, the Company believes that each person listed above has sole voting and
investment power with respect to such shares.

 The beneficial ownership of EON securities is
based on (i) 17,862,626 shares of Class A Common Stock issued and outstanding as of March 31, 2025, and (ii) 0 shares of Class B Common
Stock issued and outstanding as of March 31, 2025.

 Name and Address of Beneficial Owners (1)

 Number of Shares

 % of Total Voting Power

 Directors of officers:

 Byron Blount (2)

 187,292

 1.04
 %

 Dante Caravaggio (3)

 830,190

 4.60
 %

 Joseph V. Salvucci, Sr. (4)

 2,076,227

 11.27
 %

 Joseph V. Salvucci, Jr. (5)

 932,617

 4.99
 %

 Mitchell B. Trotter (6)

 249,963

 1.36
 %

 David M. Smith (7)

 209,516

 1.17
 %

 All directors and officers after as a group (6 persons)

 4,481,805

 22.97
 %

 Five Percent Holders:

 JVS Alpha Property, LLC (8)

 2,482,929

 13.18
 %

 Donald H. Gor e (9)

 924,064

 5.05
 %

 Steve Wright (10)

 1,500,000

 7.75
 %

 *
 Less
than one percent (1%)

 (1)
 Unless
otherwise noted, the business address of each of the following entities or individuals is 3730 Kirby Drive, Suite 1200, Houston, Texas
77098.

 (2)

 Consists of (1) 91,072 shares of Class A Common Stock held by Mr. Blount,
(2) 53,053 shares of Class A Common Stock underlying 70,737 warrants held by Mr. Blount, and (3) 49,167 shares underlying vested RSUs.

 (3)

 Consists of (1) 1,400 shares of Class A Common Stock held by Mr. Caravaggio, (2) 460,040 shares of Class A Common Stock held by Dante Caravaggio, LLC, of which Mr. Caravaggio has voting and dispositive control over the shares held by such entity, (3) 89,000 shares of Class A Common Stock held by Alexandria VMA Capital, LLC, of which Mr. Caravaggio's son has voting and dispositive control over the shares held by such entity, (4) 141,750 shares of Class A Common Stock underlying 189,000 warrants held by Dante Caravaggio, LLC, (5) 100,000 shares of Class A Common Stock held by Donna Caravaggio, the wife of Mr. Caravaggio (6) 13,000 shares underlying vested RSUs, and (7) 25,000 shares underlying vested common stock options.

 (4)

 Consists of 1,732,929 shares of Class A Common Stock held by JVS Alpha Property, LLC, over which Mr. Salvucci, Sr. has voting and dispositive control, (2) 292,465 shares of Class A Common Stock underlying 389,953 warrants and (3) 50,833 shares underlying vested RSUs.

 (5)

 Consists of (1) 132,784 shares of Class A Common Stock held directly by Mr. Salvucci, Jr., (2) 750,000 shares of Class A Common Stock underlying 1,000,000 warrants held by JVS Alpha Property, LLC, over which Mr. Salvucci, Jr. has voting and dispositive control and (4) 49,833 shares underlying vested RSUs.

 (6)

 Consists of (1) 73,796 shares of Class A Common Stock held by Mr. Trotter, (2) 142,500 shares of Class A Common Stock underlying 190,000 warrants held by Mr. Trotter, (3) 13,000 shares underlying vested RSUs, and (4) 16,667 shares underlying stock options vesting on March 12, 2025.

 (7)

 Consists of (1) 159,693 shares of Class A Common Stock held directly by Mr. Smith, (2) 20,156 shares of Class A Common Stock underlying warrants held by Mr. Smith, (3) 13,000 shares underlying vested RSUs, and (4) 16,667 shares underlying stock options vesting on March 12, 2025.

 (8)

 JVS Alpha Property, LLC's Manager is Joseph V. Salvucci, Jr., who has voting and dispositive control over the shares held by such entity. The business address for this holder is 583 Epsilon Drive, Pittsburgh, PA 15238.

 (9)

 Mr. Gor e has sole voting and dispositive control over the securities held by Rh ne Merchant House Ltd, which indirectly holds 286,758 private placement shares by virtue of its 75% ownership in HNRAC Sponsors LLC, which owns 382,344 private placement shares. Includes the assumption that 284,063 shares of Class A Common Stock underlying 378,750 warrants held by HNRAC Sponsors LLC have been issued, and includes 150,000 shares of Class A Common Stock issued to Rh ne Merchant House Ltd pursuant to the May 6, 2024 settlement agreement. The business address of Rh ne Merchant House Ltd. is 81 Rue de France, 5 TH Floor, Nice, France 06000.

 (10)

 Consists of 1,500,000 shares of Class A Common Stock underlying 2,000,000 warrants held by Mr. Wright. The business address of Mr. Wright is 1121 Boyce Rd, Suite 400, Pittsburgh, PA 15241.

 Changes in Control

 None.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

 Other than compensation arrangements for our named
executive officers and directors, we describe below each transaction or series of similar transactions, since January 1, 2024, to which
we were a party or will be a party, in which:

 the amounts involved exceeded or will exceed $120,000; and

 any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

 See Item 11 of Part III of this report for a description
of certain arrangements with our executive officers and directors.

 Related Party Loans and Costs

 In March 2024, we issued 100,000 warrants to
our Vice President of Finance and Administration having terms substantially similar to the private placement warrants in connection with
the receipt of $100,000 in cash and the issuance of a promissory note.

 In April 2024, we issued 100,000 warrants to
our Chief Financial Officer having terms substantially similar to the private placement warrants in connection with the receipt of $100,000 in
cash and the issuance of a promissory note.

 In May 2024, we issued 100,000 warrants to a stockholder
controlled by a director having terms substantially similar to the private placement warrants in connection with the receipt of $100,000
in cash and the issuance of a promissory note.

 Founder Pledge Agreement

 In connection with the Closing, we entered into
the Founder Pledge Agreement with the Founders whereby, in consideration of placing the Trust Shares into escrow and entering into the
Backstop Agreement, we agreed: (a) by January 15, 2024, to issue to the Founders an aggregate number of newly issued shares of Class A
Common Stock equal to 10% of the number of Trust Shares; (b) by January 15, 2024, to issue to the Founders a number of warrants to purchase
an aggregate number of shares of Class A Common Stock equal to 10% of the number of Trust Shares, which such warrants shall be exercisable
for five years from issuance at an exercise price of $11.50 per shares; (c) if the Backstop Agreement is not terminated prior to the Lockup
Expiration Date, to issue an aggregate number of newly issued shares of Class A Common Stock equal to (i) (A) the number of Trust Shares,
 divided by (B) the simple average of the daily VWAP of the Class A Common Stock during the five (5) Trading Days prior to the date
of the termination of the Backstop Agreement, subject to a minimum of $6.50 per share, multiplied by (C) a price between $10.00-$13.00
per share (as further described in the Founder Pledge Agreement), minus (ii) the number of Trust Shares; and (d) following the
purchase of OpCo Preferred Units by a Founder pursuant to the Put Right, to issue a number of newly issued shares of Class A Common Stock
equal to the number of Trust Shares sold by such Founder. Until the Founder Pledge Agreement is terminated, the Founders are not permitted
to engage in any transaction which is designed to sell short the Class A Common Stock or any other publicly traded securities of
EON.

 Pursuant to the Founder Pledge Agreement, the
Company issued (i) 94,000 shares of Class A Common Stock to JVS Alpha Property, LLC, an entity controlled by Joseph Salvucci, Jr., a member
of our Board of Directors, (ii) 2,500 shares of Class A Common Stock to Byron Blount, a member of our Board of Directors, and (iii) 30,000
shares of Class A Common Stock to Dante Caravaggio, LLC, an entity controlled by Dante Caravaggio, our Chief Executive Officer, President,
and member of our Board of Directors.

 Consulting Agreement

 In connection with a Referral Fee and Consulting
Agreement (the "Consulting Agreement") by and between us and Alexandria VMA Capital, LLC, an entity controlled by Dante Caravaggio,
our Chief Executive Officer, President, and member of our Board of Directors ("Consultant"), we issued 89,000 shares of Class
A Common Stock to Consultant in connection with the closing of the Purchase as consideration for services rendered with a value of $900,000.
The Consultant also earned an additional $900,000 transaction fee, of which the Company owes $403,000 as of December 31, 2024.

 Other

 In October 2024, we issued 27,963 shares of Class
A Common Stock (the "Pledge Shares") issued to Dante Caravaggio, Mitch Trotter, David Smith, Byron Blount, and Jesse Allen
(our VP of Operations) in connection with their agreement to pledge equity in favor of First International Bank & Trust ("FIBT").

 In October 2024, we issued 50,000 shares of Class
A Common Stock to Mark Williams in connection with the forgiveness of $50,000 of accounts payable due to him for his services as a consultant
prior to our initial business combination.

 Policy for Approval of Related Party Transactions

 Our Audit Committee must review and approve any
related person transaction we propose to enter into. Our Audit Committee charter details the policies and procedures relating to transactions
that may present actual, potential or perceived conflicts of interest and may raise questions as to whether such transactions are consistent
with the best interest of our company and our stockholders. A summary of such policies and procedures is set forth below.

 Any potential related party transaction that is
brought to the Audit Committee's attention will be analyzed by the Audit Committee, in consultation with outside counsel or members
of management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a related party transaction.
At its meetings, the Audit Committee will be provided with the details of each new, existing or proposed related party transaction, including
the terms of the transaction, the business purpose of the transaction and the benefits to us and to the relevant related party.

 In determining whether to approve a related party
transaction, the Audit Committee must consider, among other factors, the following factors to the extent relevant:

 whether the terms of the transaction are fair to us and on the same basis as would apply if the transaction did not involve a related party;

 whether there are business reasons for us to enter into the transaction;

 whether the transaction would impair the independence of an outside director;

 whether the transaction would present an improper conflict of interest for any director or executive officer; and

 any pre-existing contractual obligations.

 Any member of the Audit Committee who has an interest
in the transaction under discussion must abstain from any voting regarding the transaction, but may, if so requested by the chairman of
the Audit Committee, participate in some or all of the Audit Committee's discussions of the transaction. Upon completion of its
review of the transaction, the Audit Committee may determine to permit or to prohibit the transaction.

 Our Audit Committee reviews on a quarterly basis all payments that
were made to our sponsor, officers or directors, or our or their affiliates.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The following is a summary of fees paid or to
be paid to CBIZ Inc. (formerly Marcum LLP ("CBIZ"), for services rendered.

 Audit Fees. Audit fees consist of fees
billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by
CBIZ in connection with regulatory filings. The aggregate fees to be billed by CBIZ for professional services rendered for the audit of
our annual financial statements for the year ended December 31, 2024 and 2023 and interim review of our financial statements were $412,539
and $383,655, respectively. The above amounts include interim procedures and audit fees.

 Audit-Related Fees. Audit-related
services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of
our financial statements and are not reported under "Audit Fees." These services include attest services that are not required
by statute or regulation and consultations concerning financial accounting and reporting standards. We incurred fees of $81,369 and $241,844
for audit-related services from CBIZ for consultations concerning financial accounting and reporting standards for the years ended December
31, 2024 and 2023.

 Tax Fees. We paid no fees to CBIZ for tax
planning and tax advice for the years ended December 31, 2024 and 2023.

 All Other Fees. We incurred $0 in other
fees for services from CBIZ during the years ended December 31, 2024 and 2023, respectively.

 Pre-Approval Policy

 Since the formation of our Audit Committee, and
on a going-forward basis, the Audit Committee has and will pre-approve all auditing services and permitted non-audit services to be performed
for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in
the Exchange Act which are approved by the Audit Committee prior to the completion of the audit).

 ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES

 (a)

 The following documents are filed as part of this Report:

 (1)

 Financial Statements:

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID#[ ])

 Report of Independent Registered Public Accounting Firm (PCAOB ID#688)

 Balance Sheets

 Statements of Operations

 Statements of Changes in Stockholders' Equity

 Statements of Cash Flows

 Notes to Financial Statements

 (2)

 Financial Statement Schedules:

 None.

 (3)

 Exhibits

 We hereby file as part of this Report the exhibits
listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference
facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained
from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at
www.sec.gov.

 Exhibit No.

 Description

 2.1

 Amended and Restated Membership Interest Purchase Agreement, dated August 28, 2023, by and among Buyer, Seller, and Sponsor (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Registrant on August 30, 2023).

 2.2

 Amendment No. 1 to the Amended and Restated Membership Interest Purchase Agreement, dated November 15, 2023, by and among Buyer, Seller, and Sponsor (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 2.3

 Letter
 Agreement between Buyer and Seller Re: Settle Up between Parties, dated November 15, 2023 (incorporated by reference to Exhibit 2.3 to
 the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 2.4

 Purchase, Sale, Termination and Exchange Agreement by and among Company, OpCo, SPAC Subsidiary, HNRA Royalties, Pogo Royalty, CIC, DenCo, Pogo Management, and 4400 Holdings LLC dated February 10, 2025 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Registration on February 13, 2025).

 3.1

 Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 3.2

 Certificate of Amendment to Certificate of Incorporation as filed with the Secretary of State of the State of Delaware on September 16, 2024 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on September 18, 2024).

 3.3

 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the Registrant on September 18, 2024).

 3.4

 Amendedment No. 1 to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on November 26, 2024).

 4.1

 Description of Registrant's Securities (filed as Exhibit 4.2 to the Company's Annual Report on Form 10-K filed on May 3, 2024 and incorporated herein by reference).

 4.2

 Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K filed by the Registrant on April 15, 2022).

 4.3

 Warrant issued by EON Resources Inc. to Pryor Cashman LLP, dated October 18, 2024 (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 21, 2024 and incorporated herein by reference).

 10.1

 Insider Letter between the Company and each of its executive officers, directors, HNRAC Sponsors LLC and its permitted transferees (incorporated by reference to Exhibit 10.1 to the Annual Report on Form 10-K filed by the Registrant on April 15, 2022).

 10.2

 Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Company (incorporated by reference to Exhibit 10.2 to the Annual Report on Form 10-K filed by the Registrant on April 15, 2022).

 10.3

 Securities Subscription Agreement (founder shares), dated December 24, 2020, between the Company and HNRAC Sponsors LLC (incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K filed by the Registrant on April 15, 2022).

 10.4

 Unit Subscription Agreement between the Company and HNRAC Sponsors LLC (private placement units) (incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K filed by the Registrant on April 15, 2022).

 10.6

 Registration Rights Agreement, dated as of October 17, 2022, by and between HNR Acquisition Corp and White Lion Capital LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed by the Registrant on October 21, 2022).

 10.7

 Amended and Restated Limited Liability Company Agreement of HNRA Upstream, LLC by and among HNRA Upstream, LLC, EON Royalty, LLC, and HNR Acquisition Corp, dated November 15, 2023 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.8

 Senior Secured Term Loan Agreement, dated November 15, 2023, by and among First International Bank & Trust, HNR Acquisition Corp, HNRA Upstream, LLC, HNRA Partner, Inc., EON Resources, LLC, and LH Operating, LLC (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.9

 Security Agreement, dated November 15, 2023, by and among First International Bank & Trust, HNR Acquisition Corp, HNRA Upstream, LLC, HNRA Partner, Inc., PogoEON Resources, LLC, and LH Operating, LLC (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.10

 Second Amendment to Term Loan Agreement dated April 18, 2024, effective March 31, 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on April 23, 2024).

 10.11

 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-1 filed by the Registrant on December 28, 2021).

 10.12+

 2023 HNR Acquisition Corp Omnibus Incentive Plan (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.13

 Guaranty Agreement, dated as of November 15, 2023 (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.14

 Promissory Note, dated November 15, 2023 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.15

 Registration Rights Agreement, dated November 15, 2023 between the Registrant and certain security holders (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.16

 Option Agreement, dated as of November 15, 2023 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.17

 Director Nomination and Board Observer Agreement, dated as of November 15, 2023, by and between the Company and CIC EON LP, (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.18

 Backstop Agreement, dated as of November 15, 2023 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.19

 Founder Pledge Agreement, dated as of November 15, 2023 (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed by the Registrant on November 21, 2023).

 10.20

 Satisfaction and Discharge of Indebtedness pursuant to Underwriting Agreement, dated September 7, 2023, by and between the Company and EF Hutton, a division of Benchmark Investments, LLC (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed by the Registrant on September 13, 2023).

 10.21+

 Executive Employment Agreement, dated January 29, 2024, by and between the Company and Mark Williams (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on February 1, 2024).

 10.22+

 Separation and Release Agreement, dated December 17, 2023, by and between the Company and Diego Rojas (incorporated by reference to Exhibit 10.1 on the Current Report on Form 8-K filed by the Registrant on December 20, 2023).

 10.23+

 Executive Employment Agreement, dated December 18, 2023, by and between the Company and Dante Caravaggio (incorporated by reference to Exhibit 10.2 on the Current Report on Form 8-K filed by the Registrant on December 20, 2023).

 10.24

 Amendment No.1 to the Common Stock Purchase Agreement, dated March 7, 2024, by and between the Company and White Lion Capital, LLC (incorporated by reference to Exhibit 10.1 on the Current Report on Form 8-K filed by the Registrant on March 7, 2024).

 10.25

 Employment Agreement, dated December 13, 2023, by and between the Company and Mitchell B. Trotter (incorporated by reference to Exhibit 10.31 to the Company's Registrant Statement on Form S-1/A filed on August 5, 2024).

 10.26

 Employment Agreement, dated December 13, 2023, by and between the Company and David M. Smith (incorporated by reference to Exhibit 10.32 to the Company's Registrant Statement on Form S-1/A filed on August 5, 2024).

 10.27

 Amendment No. 2 to Common Stock Purchase Agreement between the Company and White Lion Capital LLC, dated June 17, 2024 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed by the Registrant on June 20, 2024).

 10.28

 Form of Exchange Agreement (incorporated by reference to Exhibit 10.1 on the Current Report on Form 8-K filed by the Registrant on January 24, 2025).

 10.29

 Form of Convertible Note (incorporated by reference to Exhibit 10.2 on the Current Report on Form 8-K filed by the Registrant on January 24, 2025).

 19.1*

 Insider Trading Policy

 21.1

 List of Subsidiaries of EON Resources Inc. (incorporated by reference to Exhibit 21.1 on the Annual Report on Form 10-K filed by the Registrant on May 3, 2024).

 23.1*

 Consent of Haas and Cobb Petroleum Consultants, LLC

 31.1*

 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1**

 Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2**

 Certification of Principal Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1

 Clawback Policy (incorporated
 by reference to Exhibit 97.1 on the Annual Report on Form 10-K filed by the Registrant on May 3, 2024).

 99.1*

 Report of William M. Cobb
 & Associates, Inc.

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 104*

 *

 Filed herewith.

 **

 Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

 Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

 +

 Denotes a management contract or compensatory plan or arrangement.

 ITEM 16. FORM 10-K SUMMARY

 Not applicable.

 SIGNATURES

 Pursuant to the requirements of Section 13
or 15(d) of the Securities Act of 1934, the registrant has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.

 EON Resources Inc.

 / s / Dante Caravaggio

 Name:

 Title:

 Chief Executive Officer

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

 Name

 Position

 Date

 /s/ Dante Caravaggio

 Chief Executive Officer, President and Director

 ( Principal Executive Officer)

 /s/ Mitchell B. Trotter

 Chief Financial Officer and Director

 (Principal Financial Officer)

 /s/ Mark Williams

 Controller and VP Finance and Admin

 Mark Williams

 (Principal Accounting Officer)

 /s/ Joseph V. Salvucci, Sr.

 Chairman and Director

 Joseph V. Salvucci, Sr.

 /s/ Joseph V. Salvucci, Jr.

 Director

 Joseph V. Salvucci, Jr.

 /s/ Byron Blount.

 Director

 Byron Blount

 EON RESOURCES, INC.

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm (PCAOB ID# 688)

 Consolidated Financial Statements:

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Changes in Stockholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 F- 1

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Shareholders and Board of Directors of

 EON Resources Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of EON Resources Inc. (Formerly HNR Acquisition Corp.) (the "Company") as of December 31, 2024 and 2023, the
related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the year ended December 31, 2024,
the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the periods from November
15, 2023 to December 31, 2023 (Successor), the period from January 1, 2023 to November 14, 2023 (Predecessor), and the related notes (collectively
referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the year
in the period ended December 31, 2024, the results of its operations and its cash flows for the period from November 15, 2023 to December
31, 2023, and the period from January 1, 2023 to November 14, 2023 in conformity with accounting principles generally accepted in the
United States of America.

 Explanatory Paragraph – Going Concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant
working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

 Restatement of September 30, 2024 Financial Statements

 We draw attention to Note 14 to the financial
statements, which describes the restatement of previously issued consolidated financial statements due to a material misstatement as of
and for the three and nine months ended September 30, 2024. The restatement has been made to ensure that the financial statements are
in conformity with generally accepted accounting principles. Our opinion on the financial statements is not modified with respect to this
matter.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ Marcum llp

 Marcum llp

 We have served as the Company's auditor since 2022.

 Houston, Texas

 F- 2

 CONSOLIDATED BALANCE SHEETS

 2024

 2023

 ASSETS

 Cash and cash equivalents

 $
 2,971,558

 $
 3,505,454

 Accounts receivable

 Crude Oil and natural gas sales

 1,777,846

 2,103,341

 Other

 4,418

 90,163

 Short-term derivative instrument asset

 106,397

 391,488

 Prepaid expenses and other current assets

 298,886

 722,002

 Total current assets

 5,159,105

 6,812,448

 Crude oil and natural gas properties, successful efforts method:

 Proved Properties

 100,285,138

 94,189,372

 Accumulated depreciation, depletion, amortization and impairment

 ( 2,759,226
)

 ( 352,127
)

 Total oil and natural gas properties, net

 97,525,912

 93,837,245

 Other property, plant and equipment, net

 20,000

 -

 Long-term derivative instrument asset

 -

 76,199

 TOTAL ASSETS

 $
 102,705,017

 $
 100,725,892

 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 Current liabilities

 Accounts payable

 $
 8,870,324

 $
 4,033,208

 Accounts payable – related parties

 445,349

 762,000

 Accrued liabilities and other

 7,923,613

 4,422,183

 Revenue and royalties payable

 3,191,171

 461,773

 Revenue and royalties payable - Related Parties

 132,563

 1,523,138

 Deferred underwriting fee payable

 1,065,000

 1,300,000

 Related party notes payable, net of discount

 3,556,750

 2,359,048

 Current portion of warrant liability

 5,681,849

 -

 Current portion of long term debt

 5,524,160

 4,157,602

 Forward purchase agreement liability

 -

 1,094,097

 Total current liabilities

 36,390,779

 20,113,049

 Long-term debt, net of current portion and discount

 33,286,385

 37,486,206

 Warrant liability

 -

 4,777,971

 Convertible note liability

 891,364

 -

 Deferred tax liability

 2,692,733

 6,163,140

 Asset retirement obligations

 1,049,285

 904,297

 Other liabilities

 675,000

 675,000

 Total for non-current liabilities

 38,594,767

 50,006,614

 Total liabilities

 74,985,546

 70,119,663

 Commitments and Contingencies

 Stockholders' (deficit) equity

 Preferred stock, $ 0.0001 par value; 1,000,000 authorized shares, 0 shares issued and outstanding at December 31, 2024 and 2023, respectively

 -

 -

 Class A Common stock, $ 0.0001 par value; 100,000,000 authorized shares, 10,323,205 and 5,235,131 shares issued and outstanding at December 31, 2024 and 2023, respectively

 1,032

 Class B Common stock, $ 0.0001 par value; 20,000,000 authorized shares, 500,000 and 1,800,000 shares issued and outstanding at December 31, 2024 and 2023, respectively

 Additional paid in capital

 31,312,003

 16,317,856

 Accumulated deficit

 ( 28,199,028
)

 ( 19,118,745
)

 Total stockholders' equity (deficit) attributable to HNR Acquisition Corp

 3,114,057

 ( 2,800,185
)

 Noncontrolling interest

 24,605,414

 33,406,414

 Total stockholders' equity

 27,719,471

 30,606,229

 Total liabilities and stockholders' equity

 $
 102,705,017

 $
 100,725,892

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 3

 CONSOLIDATED STATEMENTS OF OPERATIONS

 2024

 2023

 November 14,

 2023

 Revenues

 Crude oil

 $
 19,298,698

 $
 2,513,197

 $
 22,856,521

 Natural gas and natural gas liquids

 483,486

 70,918

 809,553

 Gain (loss) on derivative instruments, net

 ( 850,374
)

 340,808

 51,957

 Other revenue

 487,109

 50,738

 520,451

 Total revenues

 19,418,919

 2,975,661

 24,238,482

 Expenses

 Production taxes, transportation and processing

 1,715,792

 226,062

 2,117,800

 Lease operating

 8,614,080

 1,453,367

 8,692,752

 Depletion, depreciation and amortization

 2,407,098

 352,127

 1,497,749

 Accretion of asset retirement obligations

 144,988

 11,062

 848,040

 General and administrative

 10,381,095

 3,553,117

 3,700,267

 Acquisition costs

 -

 9,999,860

 -

 Total expenses

 23,263,053

 15,595,595

 16,856,608

 Operating income (loss)

 ( 3,844,134
)

 ( 12,619,934
)

 7,381,874

 Other Income (expenses)

 Change in fair value of warrant liability

 ( 804,004
)

 187,704

 -

 Change in fair value of convertible note liability

 ( 192,744
)

 Change in fair value of FPA liability

 561,099

 3,268,581

 -

 Amortization of debt discount

 ( 2,361,627
)

 ( 1,191,553
)

 -

 Interest expense

 ( 7,643,200
)

 ( 1,043,312
)

 ( 1,834,208
)

 Interest income

 58,793

 6,736

 313,401

 Gain on extinguishment of liabilities

 1,638,138

 -

 -

 Loss on sale of assets

 -

 -

 ( 816,011
)

 Other Income (expense)

 36,989

 2,937

 ( 74,193
)

 Total other income (expenses)

 ( 8,706,556
)

 1,231,093

 ( 2,411,011
)

 Loss before income taxes

 ( 12,550,690
)

 ( 11,388,841
)

 Income tax provision (benefit)

 3,470,407

 2,387,639

 -

)

)

 Net income (loss) attributable to noncontrolling interests

 -

 -

 -

 Net income (loss) attributable to HNR Acquisition Corp.

 $
)

 $
)

 $

 Weighted average share outstanding, common stock - basic and diluted

 6,477,052

 5,235,131

 -

 Net income (loss) per share of common stock – basic and diluted

 $
 ( 1.40
)

 $
 ( 1.72
)

 $
 -

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 4

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)

 Owner's Equity

 Balance at December 31, 2022

 28,504,247

 Net income

 Equity-based compensation

 Balance at November 14, 2023

 $
 33,475,110

 Total

 Stockholders'

 Class A

 Class B

 Additional

 (Deficit) Equity Attributable to HNR

 Total Stockholders'

 Common Stock

 Common Stock

 Common Stock

 Paid-In

 Accumulated

 Acquisition

 Noncontrolling

 (Deficit)

 Amount

 Amount

 Amount

 Capital

 deficit

 Corp.

 Interest

 Equity

 Balance – November 15, 2023

 3,457,813

 -

 -

 -

 $
 -

 $
 ( 9,719,485
)

 $
 ( 10,079,371
)

 $
 ( 19,798,856
)

 $
 -

 $
 ( 19,798,856
)

 Reclassification of shares under two class structure and
 non-redemptions

 ( 3,457,813
)

 ( 346
)

 3,457,813

 -

 -

 -

 -

 -

 -

 -

 Reclassification of Public shares not redeemed

 -

 -

 445,626

 -

 -

 4,878,030

 -

 4,878,075

 -

 4,878,075

 Shares reclassified under Non redemption agreement

 -

 -

 600,000

 -

 -

 6,567,879

 -

 6,567,939

 -

 6,567,939

 Shares not redeemed under forward purchase agreement to
 FPA Seller

 -

 -

 140,070

 -

 -

 1,533,272

 -

 1,533,286

 -

 1,533,286

 Excise tax imposed on common stock redemptions

 -

 -

 -

 -

 -

 -

 -

 ( 38,172
)

 ( 38,172
)

 -

 ( 38,172
)

 Forward purchase agreement prepayment

 -

 -

 -

 -

 -

 -

 8,190,554

 -

 8,190,554

 -

 8,190,554

 Share-based compensation

 -

 -

 381,622.00

 -

 -

 3,445,927

 -

 3,445,965

 -

 3,445,965

 Shares issued for Acquisition

 -

 -

 210,000.00

 1,800,000

 1,421,679

 -

 1,421,880

 33,406,414

 34,828,297

 Net loss

 -

 -

 -

 -

 -

 -

 -

)

)

 -

)

 Balance – December 31, 2023

 -

 $
 -

 5,235,131

 $

 1,800,000

 $

 $
 16,317,856

 $
 ( 19,118,745
)

 $
 ( 2,800,185
)

 $
 33,406,414

 $
 30,606,229

 Share-based compensation

 -

 -

 848,074

 -

 -

 2,778,907

 -

 2,778,991

 -

 2, 778,991

 Shares issued under equity line of credit

 -

 -

 2,230,000

 -

 -

 2,628,111

 -

 2,628,334

 -

 2,628,334

 Class B exchanged for Class A

 -

 -

 1,300,000

 ( 1,300,000
)

 ( 130
)

 8,801,000

 -

 8,801,000

 ( 8,801,000
)

 -

 Shares issued to settle FPA

 -

 -

 450,000

 -

 -

 449,955

 -

 450,000

 -

 450,000

 Shares issued to settle accounts payable

 -

 -

 260,000

 -

 -

 336,174

 -

 336,200

 336,200

 Net loss

 -

 -

 -

 -

 -

 -

 -

)

)

 -

)

 Balance – December 31, 2024

 -

 $
 -

 10,323,205

 $
 1,032

 500,000

 $

 $
 31,312,003

 $
 ( 28,199,028
)

 $
 3,114,057

 $
 24,605,414

 $
 27,719,471

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 5

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 Year Ended December 31, 2024

 November 15, 2023 to December 31, 2023

 January 1, 2023 to November 14, 2023

 Operating activities:

 $
)

 $
)

 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 Depreciation, depletion, and amortization expense

 2,407,098

 352,127

 1,497,749

 Accretion of asset retirement obligations

 144,988

 11,062

 843,865

 Equity-based compensation

 2,778,991

 3,445,965

 -

 Deferred income tax benefit

 ( 3,470,407
)

 ( 2,365,632
)

 -

 Amortization of operating lease right-of-use assets

 -

 -

 ( 403
)

 Amortization of debt issuance costs

 2,361,627

 1,191,553

 3,890

 Gain on extinguishment of liabilities

 ( 1,638,138
)

 -

 -

 Change in fair value of unsettled derivatives

 361,290

 ( 443,349
)

 ( 1,215,693
)

 Change in fair value of convertible note liability

 192,744

 -

 -

 Change in fair value of warrant liability

 804,004

 ( 187,704
)

 -

 Change in fair value of forward purchase agreement

 ( 561,099
)

 ( 3,268,581
)

 -

 Change in other property, plant, and equipment, net

 -

 -

 83,004

 Loss on sale of assets

 -

 -

 816,011

 Changes in operating assets and liabilities:

 Accounts receivable

 411,240

 1,793,055

 ( 921,945
)

 Prepaid expenses and other assets

 423,116

 ( 258,431
)

 26,833

 Related party note receivable interest income

 -

 -

 ( 313,401
)

 Accounts payable

 3,024,413

 8,091,598

 1,480,138

 Accounts payable – related parties

 ( 316,651
)

 ( 138,000
)

 -

 Accrued liabilities and other

 3,018,930

 1,251,677

 753,595

 Royalties payable

 2,729,398

 ( 313,381
)

 157,991

 Royalties payable, related party

 109,425

 323,717

 8,066

 Net cash provided by operating activities

 3,700,686

 484,474

 8,190,563

 Investing activities:

 Development of crude oil and gas properties

 ( 3,555,062
)

 ( 238,499
)

 ( 6,769,557
)

 Purchases of other equipment

 ( 20,000
)

 -

 -

 Acquisition of business, net of cash acquired

 -

 ( 30,827,804
)

 -

 Trust Account withdrawals

 -

 49,362,479

 -

 Issuance of related party note receivable

 -

 -

 ( 190,998
)

 Net cash provided by (used in) investing activities

 ( 3,575,062
)

 18,296,176

 ( 6,960,555
)

 Financing activities:

 Proceeds from issuance of long-term debt

 -

 28,000,000

 -

 Payment of debt issuance costs

 -

 ( 808,992
)

 -

 Repayments of long-term debt

 ( 3,984,286
)

 ( 319,297
)

 ( 3,000,000
)

 Proceeds of short-term notes payable

 1,298,200

 -

 -

 Repayment of short-term notes payable

 ( 989,018
)

 -

 -

 Proceeds from related party notes payable

 450,000

 -

 -

 Repayment of related party notes payable

 ( 62,750
)

 -

 -

 Proceeds from sale of common stock

 2,628,334

 -

 -

 Redemptions of common stock

 -

 ( 44,737,839
)

 -

 Net cash used in financing activities

 ( 659,520
)

 ( 17,866,128
)

 ( 3,000,000
)

 Net change in cash and cash equivalents

 ( 533,896
)

 914,522

 ( 1,769,992
)

 Cash and cash equivalents at beginning of period

 3,505,454

 2,590,932

 2,016,315

 Cash and cash equivalents at end of period

 $
 2,971,558

 $
 3,505,454

 $
 246,323

 Cash paid during the period for:

 Interest on debt

 $
 6,146,139

 $
 370,625

 $
 2,002,067

 Income taxes

 $
 -

 $
 154,000

 $
 -

 Amounts included in the measurement of operating lease liabilities

 $
 -

 $
 -

 $
 56,625

 Supplemental disclosure of non-cash investing and financing activities:

 Operating lease assets obtained in exchange for operating lease obligations

 $
 -

 $
 -

 $
 -

 Accrued purchases of property and equipment at period end

 $
 2,540,703

 $
 141,481

 $
 256,237

 The accompanying notes are an integral part of
these consolidated financial statements.

 F- 6

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS

 Organization and General

 EON Resources, Inc., Formerly HNR Acquisition
Corp (the "Company") was incorporated in Delaware on December 9, 2020. The Company was a blank check company formed for
the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses (the "Business Combination"). The Company is an "emerging growth company," as defined
in Section 2(a) of the Securities Act of 1933, as amended, or the "Securities Act," as modified by the
Jumpstart Our Business Startups Act of 2012 (the "JOBS Act").

 The registration statement for the Company's
IPO was declared effective on February 10, 2022 (the "Effective Date"). On February 15, 2022, the Company consummated the
IPO of 7,500,000 units (the "Units" and, with respect to the common stock included in the Units sold, the "Public Shares"),
at $ 10.00 per Unit. Additionally, the underwriter fully exercised its option to purchase 1,125,000 additional Units. Simultaneously with
the closing of the IPO, the Company consummated the sale of 505,000 units (the "Private Placement Units") at a price of $ 10.00
per unit generating proceeds of $ 5,050,000 in a private placement to HNRAC Sponsors, LLC, the Company's sponsor (the "Sponsor")
and EF Hutton (formerly Kingswood Capital Markets) ("EF Hutton").

 The Sponsor and other parties, purchased, in the
aggregate, 505,000 units ("Private Placement Units") at a price of $ 10.00 per Private Placement Unit in a private placement
which included a share of common stock and warrant to purchase three quarters of one share of common stock at an exercise price of $ 11.50
per share, subject to certain adjustments ("Private Placement Warrants" and together, the "Private Placement")
that occurred immediately prior to the Public Offering.

 Effective November 15,
2023, the Company completed its business combination as described in Note 3. Through its subsidiary EON Resources, LLC, a Texas limited
liability Company "("EON" or "EON Resources") and its subsidiary LH Operating, LLC, a Texas limited liability
company "("LHO"), the Company is an independent oil and natural gas company focused on the acquisition, development,
exploration, and production of oil and natural gas properties in the Permian Basin. The Permian Basin is located in west Texas and southeastern
New Mexico and is characterized by high oil and liquids-rich natural gas content, multiple vertical and horizontal target horizons, extensive
production histories, long-lived reserves and historically high drilling success rates. The Company's properties are in the Grayburg-Jackson
Field in Eddy County, New Mexico, which is a sub-area of the Permian Basin. The Company focuses exclusively on vertical development drilling.

 Inflation Reduction Act of 2022

 On August 16, 2022, the Inflation Reduction Act
of 2022 (the "IR Act") was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1 % excise
tax on certain repurchases (including redemptions) of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries
of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation
itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1 % of the fair market value
of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations
are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the
same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the "Treasury")
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

 Any redemption or other repurchase that occurs
after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether
and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise
would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business
Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any "PIPE"
or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination
but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.
In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment
of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business
Combination and in the Company's ability to complete a Business Combination.

 F- 7

 On May 11, 2023, in connection with the stockholder
vote for the amendment to the Company's certificate of incorporation, a total of 4,115,597 Public Shares for an aggregate redemption
amount of $ 43,318,207 were redeemed from the Trust Account by the stockholders of the Company. On November 15, 2023, a total of 3,323,707
Public Shares were redeemed for an aggregate redemption amount of $ 12,346,791. As a result of these redemptions of common stock, the Company
recognized an estimated liability for the excise tax of $ 474,837, included in Accrued liabilities and other on the Company's
consolidated balance sheet pursuant to the 1 % excise tax under the IR Act partially offset by issuance of common stock subsequent to the
redemptions. The liability does not impact the consolidated statements of operations and is offset against accumulated deficit, and had a balance of $ 474,837 as of December 31, 2024 and 2023, included
in Accrued Liabilities and Other on the Company's consolidated balance sheets.

 Going Concern Considerations

 At December 31, 2024, the Company had $ 2,971,558
in cash and a working capital deficit of $ 31,231,674. These conditions raise substantial doubt about the Company's ability to continue
as a going concern within one year after the date that the financial statements are issued. The Company had positive cash flow from operations
of $ 3,700,686 for the year ended December 31, 2024. Additionally, management's plans to alleviate this substantial doubt include
improving profitability through streamlining costs, maintaining active hedge positions for its proven reserve production, and the issuance
of additional shares of Class A common stock under the Common Stock Purchase Agreement. The Company has a three-year Common Stock Purchase
Agreement with a maximum funding limit of $ 150,000,000 that can fund the Company operations and production growth, and be used to
reduce liabilities of the Company, subject to the Company's Form S-1 Registration Statement, which was declared effective by the
Securities and Exchange Commission ("SEC") on August 9, 2024. Through December 31, 2024, the Company has received $ 2,628,344 in
cash proceeds related to the sale of 2,230,000 shares of common stock under the Common Stock Purchase Agreement. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

 NOTE 2 — SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

 Basis of Presentation

 On November 15, 2023 (the "Closing Date"),
the Company consummated a business combination which resulted in the acquisition of EON Resources, LLC, a Texas limited liability Company
"("EON" or "EON Resources") and its subsidiary LH Operating, LLC, a Texas limited liability company "("LHO",
and collectively, the EON Business") (the "Acquisition"). The Company was deemed the accounting acquirer in the Acquisition
based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") 805, Business Combinations, and
the EON Business was deemed to be the Predecessor entity. Accordingly, the historical consolidated financial statements of the EON Business
became the historical financial statements of the Company's upon consummation of the Acquisition. As a result, the financial statements
included in this report reflect (i) the historical operating results of EON Business prior to the Acquisition ("Predecessor")
and (ii) the combined results of the companies, including EON Business following the closing of the Acquisition ("Successor").
The accompanying financial statements include a Predecessor period, which was the period January 1, 2023 through November 14, 2023, concurrent
with completion of the Acquisition and Successor period from November 15, 2023 through December 31, 2023. As a result of the Acquisition,
the results of operations, financial position and cash flows of the Predecessor and Successor may not be directly comparable. A black-line
between the Successor and Predecessor periods has been placed in the consolidated financial statements and in the tables to the notes
to the consolidated financial statements to highlight the lack of comparability between these two periods as the Acquisition resulted
in a new basis of accounting for the EON Business. See Note 3 for additional information.

 The accompanying financial statements are presented
in U.S. dollars in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP")
and pursuant to the rules and regulations of the SEC.

 F- 8

 Principles of Consolidation

 The accompanying consolidated financial statements
include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated
in consolidation.

 Segments Reporting

 The Company manages its operations as a single
segment for the purpose of assessing performance and making operating decisions. The Company's Chief Operating Decision Maker ("CODM")
is its executive management committee. The CODM allocates resources and evaluates the performance of the Company using information about
combined net income from operations. All significant operating decisions are based upon an analysis of the Company as one operating
segment, which is the same as its reporting segment.

 Emerging Growth Company

 Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Securities Exchange Act of 1934) are required to comply with the new or revised financial accounting standards.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of the Company's consolidated financial statements with another public company which is neither
an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.

 Net Income (Loss) Per Share:

 Net income (loss) per share of common stock is
computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding
during the period, excluding shares of common stock subject to forfeiture.

 The Company's Class B Common shares do not
have economic rights to the undistributed earnings of the Companyand are not considered participating securities under ASC 260. As such,
they are excluded from the calculation of net income (loss) per common share.

 The Company has not considered the effect of the
warrants sold in the Initial Public Offering and private placement warrants to purchase an aggregate of 6,847,500 shares, warrants
to purchase 4,188,000 shares issued in connection with Private Notes Payable and warrant to purchase 1,200,000 issued to a vendor in the
calculation of diluted income per share, since the effective of those instruments would be anti-dilutive. As a result, diluted income
(loss) per share of common stock is the same as basic loss per share of common stock for the period presented.

 Use of Estimates

 The preparation of financial statements in conformity
with GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant estimates and assumptions reflected in the financial statements include: i) estimates of proved
reserves of oil and natural gas, which affect the calculation of depletion, depreciation, and amortization ("DD&A") and
impairment of proved oil and natural gas properties, ii) impairment of undeveloped properties and other assets; and iii) the valuation
of commodity and other derivative financial instruments. These estimates are based on information available as of the date of the financial
statements; therefore, actual results could differ materially from management's estimates using different assumptions or under different
conditions. Future production may vary materially from estimated oil and natural gas proved reserves. Actual future prices may vary significantly
from price assumptions used for determining proved reserves and for financial reporting.

 F- 9

 Cash

 The Company considers all cash on hand, depository
accounts held by banks, money market accounts and investments with an original maturity of three months or less to be cash equivalents.
The Company's cash and cash equivalents are held in financial institutions in amounts that exceed the insurance limits of the Federal
Deposit Insurance Corporation. The Company believes its counterparty risks are minimal based on the reputation and history of the institutions
selected.

 Accounts Receivable

 Accounts receivable consist
of receivables from crude oil and natural gas purchasers and are generally uncollateralized. Accounts receivables are typically due within
30 to 60 days of the production date and 30 days of the billing date and are stated at amounts due from purchasers and industry
partners. Amounts are considered past due if they have been outstanding for 60 days or more. No interest is typically charged on
past due amounts.

 The Company reviews its
need for an allowance for doubtful accounts on a periodic basis and determines the allowance, if any, by considering the length of time
past due, previous loss history, future net revenues associated with the debtor's ownership interest in oil and natural gas properties
operated by the Company and the debtor's ability to pay its obligations, among other things. The Company believes its accounts receivable
are fully collectible. Accordingly, no allowance for doubtful accounts has been provided.

 As of December 31,
2024 and 2023, the Company had approximately 99 % and 96 % of accounts receivable with two customers, respectively.

 Crude Oil and Natural
Gas Properties

 The Company accounts
for its crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs of proved developed
producing properties, successful exploratory wells and developmental dry hole costs are capitalized. Internal costs that are directly
related to acquisition and development activities, including salaries and benefits, are capitalized. Internal costs related to production
and similar activities are expensed as incurred. Capitalized costs are depleted by the unit-of-production method based on estimated proved
developed producing reserves. The Company calculates quarterly depletion expense by using the estimated prior period-end reserves as the
denominator. The process of estimating and evaluating crude oil and natural gas reserves is complex, requiring significant decisions in
the evaluation of available geological, geophysical, engineering, and economic data. The data for a given property may also change substantially
over time because of numerous factors, including additional development activity, evolving production history and a continual reassessment
of the viability of production under changing economic conditions. As a result, revisions in existing reserve estimates occur. Capitalized
development costs of producing oil and natural gas properties are depleted over proved developed reserves and leasehold costs are depleted
over total proved reserves. Upon the sale or retirement of significant portions of or complete fields of depreciable or depletable property,
the net book value thereof, less proceeds or salvage value, is recognized as a gain or loss.

 Exploration costs, including
geological and geophysical expenses, seismic costs on unproved leaseholds and delay rentals are expensed as incurred. Exploratory well
drilling costs, including the cost of stratigraphic test wells, are initially capitalized, but charged to expense if the well is determined
to be economically nonproductive. The status of each in-progress well is reviewed quarterly to determine the proper accounting treatment
under the successful efforts method of accounting. Exploratory well costs continue to be capitalized so long as the Company has identified
a sufficient quantity of reserves to justify completion as a producing well, is making sufficient progress assessing reserves with economic
and operating viability, and the Company remains unable to make a final determination of productivity.

 F- 10

 If an in-progress exploratory
well is found to be economically unsuccessful prior to the issuance of the financial statements, the costs incurred prior to the end of
the reporting period are charged to exploration expense. If the Company is unable to make a final determination about the productive status
of a well prior to issuance of the financial statements, the costs associated with the well are classified as suspended well costs until
the Company has had sufficient time to conduct additional completion or testing operations to evaluate the pertinent geological and engineering
data obtained. At the time the Company can make a final determination of a well's productive status, the well is removed from suspended
well status and the resulting accounting treatment is recorded.

 The Successor recognized
depreciation, depletion, and amortization expense totaling $ 2,407,098 for the year ended December 31, 2024 and $ 352,127 for the period
from November 15, 2023 to December 31, 2023, and the Predecessor recognized $ 1,497,749 for the period from January 1, 2023 to November
14, 2023.

 Impairment of Oil
and Gas Properties

 Proved oil and natural
gas properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying
amount of such property. The Company estimates the expected future cash flows of its oil and natural gas properties and compares the undiscounted
cash flows to the carrying amount of the oil and natural gas properties, on a field-by-field basis, to determine if the carrying amount
is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will write down the carrying
amount of the oil and natural gas properties to estimated fair value.

 The Company and the Predecessor
did not recognize any impairment of oil and natural gas properties in the periods presented.

 Asset Retirement Obligations

 The Company recognizes
the fair value of an asset retirement obligation ("ARO") in the period in which it is incurred if a reasonable estimate of
fair value can be made. The asset retirement obligation is recorded as a liability at its estimated present value, with an offsetting
increase recognized in oil and natural gas properties on the consolidated balance sheets. Periodic accretion of the discounted value of
the estimated liability is recorded as an expense in the consolidated statements of operations.

 Other Property and
Equipment, net

 Other property and equipment
are recorded at cost. Other property and equipment are depreciated over its estimated useful life on a straight-line basis. The Company
expenses maintenance and repairs in the period incurred. Upon retirements or dispositions of assets, the cost and related accumulated
depreciation are removed from the consolidated balance sheet with the resulting gains or losses, if any, reflected in operations.

 Materials and supplies
are stated at the lower of cost or market and consist of oil and gas drilling or repair items such a tubing, casing, and pumping units.
These items are primarily acquired for use in future drilling or repair operations and are carried at lower of cost or market.

 The Company reviews its
long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. If such assets are considered impaired, the impairment to be recorded is measured by the amount by which the carrying amount
of the asset exceeds its estimated fair value. The estimated fair value is determined using either a discounted future cash flow model
or another appropriate fair value method.

 F- 11

 Derivative Instruments

 The Company uses derivative
financial instruments to mitigate its exposure to commodity price risk associated with oil prices. The Company's derivative financial
instruments are recorded on the consolidated balance sheets as either an asset or a liability measured at fair value. The Company has
elected not to apply hedge accounting for its existing derivative financial instruments, and as a result, the Company recognizes the change
in derivative fair value between reporting periods currently in its consolidated statements of operations. The fair value of the Company's
derivative financial instruments is determined using industry-standard models that consider various inputs including: (i) quoted
forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying
instruments, as well as other relevant economic measures. Realized gains and losses from the settlement of derivative financial instruments
and unrealized gains and unrealized losses from valuation changes in the remaining unsettled derivative financial instruments are reported
in a single line item as a component of revenues in the consolidated statements of operations. Cash flows from derivative contract settlements
are reflected in operating activities in the accompanying consolidated statements of cash flows. See Note 4 for additional information
about the Company's derivative instruments.

 The Company's credit
risk related to derivatives is a counterparties' failure to perform under derivative contracts owed to the Company. The Company
uses credit and other financial criteria to evaluate the credit standing of, and to select, counterparties to its derivative instruments.
Although the Company does not obtain collateral or otherwise secure the fair value of its derivative instruments, associated credit risk
is mitigated by the Company's credit risk policies and procedures.

 The Company has entered
into International Swap Dealers Association Master Agreements ("ISDA Agreements") with its derivative counterparty. The terms
of the ISDA Agreements provide the Company and the counterparty with rights of set off upon the occurrence of defined acts of default
by either the Company or a counterparty to a derivative, whereby the party not in default may set off all derivative liabilities owed
to the defaulting party against all derivative asset receivables from the defaulting party.

 Product Revenues

 The Company accounts
for sales in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers.
Revenue is recognized when the Company satisfies a performance obligation in an amount reflecting the consideration to which it expects
to be entitled. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying
the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price;
(4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the performance
obligation is satisfied.

 The Company enters into
contracts with customers to sell its oil and natural gas production. Revenue from these contracts is recognized when the Company's
performance obligations under these contracts are satisfied, which generally occurs with the transfer of control of the oil and natural
gas to the purchaser. Control is generally considered transferred when the following criteria are met: (i) transfer of physical custody,
(ii) transfer of title, (iii) transfer of risk of loss and (iv) relinquishment of any repurchase rights or other similar
rights. Given the nature of the products sold, revenue is recognized at a point in time based on the amount of consideration the Company
expects to receive in accordance with the price specified in the contract. Consideration under oil and natural gas marketing contracts
is typically received from the purchaser one to two months after production.

 Most of the Company's
oil marketing contracts transfer physical custody and title at or near the wellhead or a central delivery point, which is generally when
control of the oil has been transferred to the purchaser. The majority of the oil produced is sold under contracts using market-based
pricing, which price is then adjusted for differentials based upon delivery location and oil quality. To the extent the differentials
are incurred at or after the transfer of control of the oil, the differentials are included in oil revenues on the statements of operations,
as they represent part of the transaction price of the contract. If other related costs are incurred prior to the transfer of control
of the oil, those costs are included in production taxes, transportation and processing expenses on the Company's consolidated statements
of operations, as they represent payment for services performed outside of the contract with the customer.

 The Company's natural
gas is sold at the lease location. Most of the Company's natural gas is sold under gas purchase agreements. Under the gas purchase
agreements, the Company receives a percentage of the net production from the sale of the natural gas and residue gas, less associated
expenses incurred by the buyer.

 The Company does not
disclose the value of unsatisfied performance obligations under its contracts with customers as it applies the practical expedient in
accordance with ASC 606. The expedient, as described in ASC 606-10-50-14(a), applies to variable consideration that is recognized
as control of the product is transferred to the customer. Since each unit of product represents a separate performance obligation, future
volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required.

 F- 12

 Customers

 The Company sold 100 %
of its crude oil and natural gas production to two customers for the years ended December 31, 2024, and 2023. Inherent to the
industry is the concentration of crude oil, natural gas and natural gas liquids ("NGLs") sales to a limited number of customers.
This concentration has the potential to impact the Company's overall exposure to credit risk in that its customers may be similarly
affected by changes in economic and financial conditions, commodity prices or other conditions. Given the liquidity in the market for
the sale of hydrocarbons, the Company believes the loss of any single purchaser, or the aggregate loss of several purchasers, could be
managed by selling to alternative purchasers in the operating areas.

 Warranty Obligations

 The Company provides
an assurance-type warranty that guarantees its products comply with agreed-upon specifications. This warranty is not sold separately and
does not convey any additional goods or services to the customer; therefore, the warranty is not considered a separate performance obligation.
As the Company typically incurs minimal claims under the warranties, no liability is estimated at the time goods are delivered, but rather
at the point of a claim.

 Other Revenue

 Other revenue is generated
from the fees the Company charges a single customer for the disposal of water, saltwater, brine, brackish water, and other water (collectively,
"Water") into the Company's water injection system. Revenue recognized under the agreement is variable in nature and
primarily based on the volume of Water accepted during the period.

 Warrant Liabilities

 The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance
in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ASC 480, Distinguishing Liabilities from
Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants
are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's
own common stock, among other conditions for equity classification. This assessment is conducted at the time of warrant issuance and as
of each subsequent quarterly period end date while the warrants are outstanding.

 In accordance with Accounting
Standards Codification ASC 815-40, Derivatives and Hedging—Contracts in Entity's Own Equity, the warrants issued in connection
with the Private Notes Payable do not meet the criteria for equity classification due to the redemption right whereby the holder may require
the Company to settle the warrant in cash 18 months after the closing of the MIPA, and must be recorded as liabilities. The warrants are
measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes
in fair value recognized in the statements of operations in the period of change.

 Forward Purchase Agreement Valuation

 The Company has determined
that the FPA Put Option, including the Maturity Consideration, within the Forward Purchase Agreement is (i) a freestanding financial instrument
and (ii) a liability (i.e., an in-substance written put option). This liability was recorded as a liability at fair value on the consolidated
balance sheet as of the reporting date in accordance with ASC 480. The fair value of the liability was estimated using a Monte-Carlo Simulation
in a risk-neutral framework. Specifically, the future stock price is simulated assuming a Geometric Brownian Motion ("GBM").
For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted back to present.
Finally, the value of the forward is calculated as the average present value over all simulated paths. The model also considered the likelihood
of a dilutive offering of common stock.

 F- 13

 Concentration of Credit Risk:

 Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal
Depository Insurance Coverage ("FDIC") of $ 250,000. As of December 31, 2024, the Company's cash balance did not exceeded
the FDIC limit. At December 31, 2024, the Company had not experienced losses on this account and management believes the Company is not
exposed to significant risks on such account.

 Income Taxes

 The Company follows the asset and liability method
of accounting for income taxes under FASB ASC 740, "Income Taxes." Deferred tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 FASB ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing
authorities. There were no unrecognized tax benefits as of December 31, 2024 and 2023. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at December
31, 2024 and 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals,
or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

 Prior the closing of the Acquisition, the Predecessor
elected to be treated as a partnership for income tax purposes and was not subject to federal, state, or local income taxes. Any taxable
income or loss was recognized by the owners. Accordingly, no federal, state, or local income taxes have been reflected in the accompanying
consolidated financial statements of the Predecessor. Significant differences may exist between the results of operations reported in
these consolidated financial statements and those determined for income tax purposes primarily due to the use of different asset valuation
methods for tax purposes.

 Segment Reporting

 Segment information is prepared on the same basis
that our CEO, who is our Chief Operating Decision Maker ("CODM"), manages our segments, evaluates financial results, and makes
key operating decisions. The Company has one reportable operating segment, its oil and gas operations which derives its revenue from the
sale of oil and gas products. The CODM uses net income from operations to evaluate and make key operating decisions. The information regularly
provided to the CODM on the segment's revenues and significant expenses aligns with the categories presented in the Consolidated
Statements of Operations. Furthermore, the segment's assets are reported on the Consolidated Balance Sheets as total assets.

 Recent Accounting Pronouncements

 In November 2023, the FASB issued Accounting Standards
Update (ASU) 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures, which adds new
disclosure requirements related to significant segment expenses regularly provided to the chief operating decision maker (CODM) and included
in each reported measure of segment profit or loss, other segment items that constitute the difference between segment revenues less significant
segment expenses and the measure of profit or loss, disclosure of the CODM's title and position as well as an explanation of how the CODM
uses the reported measures and expanded interim disclosures. ASU 2023-07 is effective for financial statements for annual periods beginning
after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company has implemented this ASU
during the year ended December 31, 2024, and determined no retrospective changes were necessary.

 F- 14

 In December 2023, the FASB issued ASU 2023-09, Income
Taxes (Topic 740) — Improvements to Income Tax Disclosures. Under this ASU, entities must disclose, on an annual basis, specific
categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In
addition, ASU 2023-09 requires entities to disclose additional information about income taxes paid. ASU 2023-09 is
effective for financial statements for annual periods beginning after December 15, 2024. The Company is currently evaluating the potential
impact of adopting this guidance on the consolidated financial statements and the notes to consolidated financial statements.

 Management does not believe that any recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's consolidated
financial statements.

 NOTE 3 — BUSINESS COMBINATION

 The Company entered into that certain Amended
and Restated Membership Interest Purchase Agreement, dated as of August 28, 2023 (as amended, the "MIPA"), by and among HNRA,
HNRA Upstream, LLC, a newly formed Delaware limited liability company which is managed by, and is a subsidiary of, HNRA ("OpCo"),
and HNRA Partner, Inc., a newly formed Delaware corporation and wholly owned subsidiary of OpCo ("SPAC Subsidiary", and together
with the Company and OpCo, "Buyer" and each a "Buyer"), CIC EON LP, a Delaware limited partnership ("CIC"),
DenCo Resources, LLC, a Texas limited liability company ("DenCo"), EON Resources Management, LLC, a Texas limited liability
company ("EON Management"), 4400 Holdings, LLC, a Texas limited liability company ("4400" and, together with CIC,
DenCo and EON Management, collectively, "Seller" and each a "Seller"), and, solely with respect to Section 6.20
of the MIPA, the Sponsor.

 On November 15, 2023 (the "Closing Date"),
as contemplated by the MIPA:

 HNRA filed a Second Amended and Restated Certificate of Incorporation (the "Second A&R Charter") with the Secretary of State of the State of Delaware, pursuant to which the number of authorized shares of HNRA's capital stock, par value $ 0.0001 per share, was increased to 121,000,000 shares, consisting of (i) 100,000,000 shares of Class A common stock, par value $ 0.0001 per share (the "Class A Common Stock"), (ii) 20,000,000 shares of Class B common stock, par value $ 0.0001 per share (the "Class B Common Stock"), and (iii) 1,000,000 shares of preferred stock, par value $ 0.0001 per share;

 The current shares of common stock of HNRA were reclassified as Class A Common Stock, the Class B Common Stock have no economic rights but entitles its holder to one vote on all matters to be voted on by stockholders generally, holders of shares of Class A Common Stock and shares of Class B Common Stock will vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by the Second A&R Charter;

 (A) HNRA contributed to OpCo (i) all of its assets (excluding its interests in OpCo and the aggregate amount of cash required to satisfy any exercise by HNRA stockholders of their Redemption Rights (as defined below)) and (ii) 2,000,000 newly issued shares of Class B Common Stock (such shares, the "Seller Class B Shares") and (B) in exchange therefor, OpCo issued to HNRA a number of Class A common units of OpCo (the "OpCo Class A Units") equal to the number of total shares of Class A Common Stock issued and outstanding immediately after the closing (the "Closing") of the transactions (the "Transactions") contemplated by the HNRA (following the exercise by HNRA stockholders of their Redemption Rights) (such transactions, the "SPAC Contribution");

 Immediately following the SPAC Contribution, OpCo contributed $ 900,000 to SPAC Subsidiary in exchange for 100 % of the outstanding common stock of SPAC Subsidiary (the "SPAC Subsidiary Contribution"); and

 Immediately following the SPAC Subsidiary Contribution, Seller sold, contributed, assigned, and conveyed to (A) OpCo, and OpCo acquired and accepted from Seller, ninety-nine percent ( 99.0 %) of the outstanding membership interests of EON Resources, LLC, a Texas limited liability company ("EON" or the "Target"), and (B) SPAC Subsidiary, and SPAC Subsidiary purchased and accepted from Seller, one percent ( 1.0 %) of the outstanding membership interest of Target (together with the ninety-nine ( 99.0 %) interest, the "Target Interests"), in each case, in exchange for (x) $ 900,000 of the Cash Consideration (as defined below) in the case of SPAC Subsidiary and (y) the remainder of the Aggregate Consideration (as defined below) in the case of OpCo (such transactions, together with the SPAC Contribution and SPAC Subsidiary Contribution, the "Acquisition").

 F- 15

 The "Aggregate Consideration" for
the EON Business was (a), cash in the amount of $ 31,074,127 in immediately available funds (the "Cash Consideration"),
(b) 2,000,000 Class B common units of OpCo ("OpCo Class B Units") (the "Common Unit Consideration"), which will
be equal to and exchangeable into 2,000,000 shares of Class A Common Stock issuable upon exercise of the OpCo Exchange Right (as
defined below), as reflected in the amended and restated limited liability company agreement of OpCo that became effective at Closing
(the "A&R OpCo LLC Agreement"), (c) and the 2,000,000 Seller Class B Shares, (d) $ 15,000,000 payable through a promissory
note to Seller (the "Seller Promissory Note"), (e) 1,500,000 preferred units of OpCo (the "OpCo Preferred Units"
and together with the Opco Class A Units and the OpCo Class B Units, the "OpCo Units") of OpCo (the "Preferred Unit
Consideration", and, together with the Common Unit Consideration, the "Unit Consideration"), and (f) an agreement to,
on or before November 21, 2023, Buyer shall settle and pay to Seller $ 1,925,873 from sales proceeds received from oil and gas production
attributable to EON, including pursuant to its third party contract with affiliates of Chevron. At Closing, 500,000 Seller Class B Shares
(the "Escrowed Share Consideration") were placed in escrow for the benefit of Buyer pursuant to an escrow agreement and the
indemnity provisions in the MIPA. The Aggregate Consideration is subject to adjustment in accordance with the MIPA.

 OpCo A&R LLC Agreement

 In connection with the Closing, HNRA and EON Royalty,
LLC, a Texas limited liability company, an affiliate of Seller and Seller's designated recipient of the Aggregate Consideration
("EON Royalty"), entered into an amended and restated limited liability company agreement of OpCo (the "OpCo A&R
LLC Agreement"). Pursuant to the A&R OpCo LLC Agreement, each OpCo unitholder (excluding HNRA) will, subject to certain timing
procedures and other conditions set forth therein, have the right(the "OpCo Exchange Right") to exchange all or a portion
of its OpCo Class B Units for, at OpCo's election,(i) shares of Class A Common Stock at an exchange ratio of one share of Class
A Common Stock for each OpCo Class B Unit exchanged, subject to conversion rate adjustments for stock splits, stock dividends and reclassifications
and other similar transactions, or (ii) an equivalent amount of cash. Additionally, the holders of OpCo Class B Units will be required
to exchange all of their OpCo Class B Units (a "Mandatory Exchange") upon the occurrence of the following: (i) upon the direction
of HNRA with the consent of at least fifty percent ( 50 %) of the holders of OpCo Class B Units; or (ii) upon the one-year anniversary of
the Mandatory Conversion Trigger Date. In connection with any exchange of OpCo Class B Units pursuant to the OpCo Exchange Right or acquisition
of OpCo Class B Units pursuant to a Mandatory Exchange, a corresponding number of shares of Class B Common Stock held by the relevant
OpCo unitholder will be cancelled.

 Immediately upon the Closing, EON Royalty exercised
the OpCo Exchange Right as it relates to 200,000 OpCo Class B units (and 200,000 shares of Class B Common Stock).

 The OpCo Preferred Units will be automatically
converted into OpCo Class B Units on the two-year anniversary of the issuance date of such OpCo Preferred Units (the "Mandatory
Conversion Trigger Date") at a rate determined by dividing (i) $ 20.00 per unit (the "Stated Conversion Value"),
by (ii) the Market Price of the Class A Common Stock, (the "Conversion Price"). The "Market Price" means
the simple average of the daily VWAP of the Class A Common Stock during the five ( 5) trading days prior to the date of conversion.
On the Mandatory Conversion Trigger Date, the Company will issue a number of shares of Class B Common Stock to Seller equivalent
to the number of OpCo Class B Units issued to Seller. If not exchanged sooner, such newly issued OpCo Class B Units shall
automatically exchange into Class A Common Stock on the one-year anniversary of the Mandatory Conversion Trigger Date at a ratio
of one OpCo Class B Unit for one share of Class Common Stock. An equivalent number of shares of Class B Common Stock must
be surrendered with the OpCo Class B Units to the Company in exchange for the Class A Common Stock. As noted above, the
OpCo Class B Units must be exchanged upon the one-year anniversary of the Mandatory Conversion Trigger Date.

 F- 16

 Option Agreement

 In connection with the Closing, HNRA Royalties,
LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of HNRA ("HNRA Royalties") and EON Royalty
entered into an Option Agreement (the "Option Agreement"). EON Royalty owns certain overriding royalty interests in certain
oil and gas assets owned by EON Resources, LLC (the "ORR Interest"). Pursuant to the Option Agreement, EON Royalty granted
irrevocable and exclusive option to HNRA Royalties to purchase the ORR Interest for the Option Price (as defined below) at any time prior
to November 15, 2024. The option is not exercisable while the Seller Promissory Note is outstanding.

 The purchase price for the ORR Interest upon exercise
of the option is: (i) (1) $ 30,000,000 the ("Base Option Price"), plus (2) an additional amount equal to interest
on the Base Option Price of twelve percent ( 12 %), compounded monthly, from the Closing Date through the date of acquisition of the ORR
Interest, minus (ii) any amounts received by EON Royalty in respect of the ORR Interest from the month of production in which the
effective date of the Option Agreement occurs through the date of the exercise of the option (such aggregate purchase price, the "Option
Price").

 The Option Agreement and the option will immediately
terminate upon the earlier of (a) EON Royalty's transfer or assignment of all of the ORR Interest in accordance with the Option
Agreement and (b) November 15, 2024. As consideration for the Option Agreement, the Company issued 10,000 shares of Class A common
stock to EON Royalty with a fair value of $ 67,700. EON Royalty obtained the ORR Interest effective July 1, 2023, when the Predecessor
transferred to EON Royalty an assigned and undivided royalty interest equal in amount to ten percent ( 10 %) of the Predecessors'
interest all oil, gas and minerals in, under and produced from each lease. The Predecessor recognized a loss on sale of assets of $ 816,011
in connection with this transaction.

 Backstop Agreement

 In connection with the Closing, HNRA entered a
Backstop Agreement (the "Backstop Agreement") with EON Royalty and certain of HNRA's founders listed therein (the "Founders")
whereby the EON Royalty will have the right ("Put Right") to cause the Founders to purchase Seller's OpCo Preferred
Units at a purchase price per unit equal to $ 10.00 per unit plus the product of (i) the number of days elapsed since the
effective date of the Backstop Agreement and (ii) $ 10.00 divided by 730. Seller's right to exercise the Put Right will survive
for six (6) months following the date the Trust Shares (as defined below) are not restricted from transfer under the Letter Agreement
(as defined in the MIPA) (the "Lockup Expiration Date").

 As security that the Founders will be able to
purchase the OpCo Preferred Units upon exercise of the Put Right, the Founders agreed to place at least 1,300,000 shares of
Class A Common Stock into escrow (the "Trust Shares"), which the Founders can sell or borrow against to meet their obligations
upon exercise of the Put Right, with the prior consent of Seller. HNRA is not obligated to purchase the OpCo Preferred Units from
EON Royalty under the Backstop Agreement. Until the Backstop Agreement is terminated, EON Royalty and its affiliates are not permitted
to engage in any transaction which is designed to sell short the Class A Common Stock or any other publicly traded securities of
HNRA.

 Founder Pledge Agreement

 In connection with the Closing, HNRA entered a
Founder Pledge Agreement (the "Founder Pledge Agreement") with the Founders whereby, in consideration of placing the Trust
Shares into escrow and entering into the Backstop Agreement, HNRA agreed: (a) by January 15, 2024, to issue to the Founders an aggregate
number of newly issued shares of Class A Common Stock equal to 10 % of the number of Trust Shares; (b) by January 15, 2024, to issue to
the Founders number of warrants to purchase an aggregate number of shares of Class A Common Stock equal to 10 % of the number of Trust
Shares, which such warrants shall be exercisable for five years from issuance at an exercise price of $ 11.50 per shares; (c) if the Backstop
Agreement is not terminated prior to the Lockup Expiration Date, to issue an aggregate number of newly issued shares of Class A Common
Stock equal to (i) (A) the number of Trust Shares, divided by (B) the simple average of the daily VWAP of the Class
A Common Stock during the five (5) Trading Days prior to the date of the termination of the Backstop Agreement, subject to a minimum of
$ 6.50 per share, multiplied by (C) a price between $ 10.00 -$ 13.00 per share (as further described in the Founder Pledge
Agreement), minus (ii) the number of Trust Shares; and (d) following the purchase of OpCo Preferred Units by a Founder
pursuant to the Put Right, to issue a number of newly issued shares of Class A Common Stock equal to the number of Trust Shares sold
by such Founder. Until the Founder Pledge Agreement is terminated, the Founders are not permitted to engage in any transaction which
is designed to sell short the Class A Common Stock or any other publicly traded securities of HNRA.

 F- 17

 The above description of the Founder Pledge Agreement
is a summary only and is qualified in its entirety by the text of the Founder Pledge Agreement. In consideration for entering into the
Backstop agreement, the Company issued the Founders an aggregate of 134,500 shares of Class A Common Stock, with a fair value of $ 910,565
based on the closing price of the Company's common stock of $ 6.77 on November 15, 2023.

 The Acquisition was accounted for as a business
combination under ASC 805. The purchase price of the EON Business has been allocated to the assets acquired and liabilities assumed based
on their estimated relative fair values as follows:

 Purchase Price:

 Cash

 $
 31,074,127

 Side Letter payable

 1,925,873

 Promissory note to Sellers of EON Business

 15,000,000

 10,000 HNRA Class A Common shares for Option Agreement

 67,700

 200,000 HNRA Class A Common shares

 1,354,000

 1,800,000 OpCo Class B Units

 12,186,000

 1,500,000 OpCo Preferred Units

 21,220,594

 Total purchase consideration

 $
 82,828,294

 Purchase Price Allocation

 Cash

 $
 246,323

 Accounts receivable

 3,986,559

 Prepaid expenses

 368,371

 Oil & gas reserves

 93,809,392

 Derivative assets

 51,907

 Accounts payable

 ( 2,290,475
)

 Accrued liabilities and other

 ( 1,244,633
)

 Revenue and royalties payable

 ( 775,154
)

 Revenue and royalties payable, related parties

 ( 1,199,420
)

 Short-term derivative liabilities

 ( 27,569
)

 Deferred tax liabilities

 ( 8,528,772
)

 Asset retirement obligations, net

 ( 893,235
)

 Other liabilities

 ( 675,000
)

 Net assets acquired

 $
 82,828,294

 The fair value of the Class A common shares is
based on the closing price of the Company's common stock at November 15, 2023, which was $ 6.77. The fair value of the OpCo Class
B Units is based on the equivalent of 1,800,000 shares of Class A common stock and the same closing price. The fair value of the OpCo
Preferred Units was estimated based on the present value of the maximum Stated Conversion Value of 1,500,000 units over the two-year period
using a weighted average cost of capital.

 Effective June 20, 2024, the Company and the Seller
entered into a settlement agreement and Release (the "Settlement Agreement"). Under the Settlement Agreement, and in settlement
of the working capital provisions of the Amended MIPA, the Seller agreed to waive all rights and claims to the amount of royalties payable
under the ORRI as of December 31, 2023, totaling $ 1,500,000 and agreed to pay certain amounts related to vendor payable claims assumed
by the Company at Closing totaling $ 220,00. During the year ended December 31, 2024, the Company recognized a gain on settlement of liabilities
of $ 1,720,000 related to the Settlement Agreement, included in other income on the unaudited consolidated statement of operations.

 As of December 31, 2024, the Company owes $ 645,873
of the Side Letter payable, included in accrued expenses and other current liabilities on the consolidated balance sheet.

 F- 18

 Unaudited
Pro Forma Financial Information

 The following table sets
forth the pro-forma consolidated results of operations of the combined Successor Predecessor companies for the year ended December 31,
2023 as if the Acquisition occurred on January 1, 2023. The pro forma results of operations are presented for informational purposes only
and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted
above, or of results that may occur in the future.

 Year ended

 2023

 Revenue

 $
 27,214,143

 Operating income

 4,962,026

 Net income

 1,486,496

 Net income per common share

 $
 0.28

 Weighted Average common shares outstanding

 5,235,131

 NOTE 4 — DERIVATIVES

 Derivative Activities

 The Company is exposed
to volatility in market prices and basis differentials for natural gas, oil and NGLs, which impacts the predictability of its cash flows
related to the sale of those commodities. These risks are managed by the Company's use of certain derivative financial instruments.
The company has historically used crude diff swaps, fixed price swaps, and costless collars. As of December 31, 2023, the Company's
derivative financial instruments consisted of costless collars and crude diff swaps, which are described below:

 Costless Collars

 Arrangements that contain
a fixed floor price ("purchased put option") and a fixed ceiling price ("sold call option") based on an index
price which, in aggregate, have no net cost. At the contract settlement date, (1) if the index price is higher than the ceiling price,
the Company pays the counterparty the difference between the index price and ceiling price, (2) if the index price is between the
floor and ceiling prices, no payments are due from either party, and (3) if the index price is below the floor price, the Company
will receive the difference between the floor price and the index price.

 Additionally, the Company
will occasionally purchase an additional call option at a higher strike price than the aforementioned fixed ceiling price. Often this
is accomplished in conjunction with the costless collar at no additional cost. If an additional call option is utilized, at the contract
settlement date, (1) if the index price is higher than the sold call strike price but lower than the purchased option strike price,
then the Company pays the difference between the index price and the sold call strike price, (2) if the index price is higher than
the purchased call price, then the company pays the difference between the purchased call option and the sold call option, and the company
receives payment of the difference between the index price and the purchased option strike price, (3) if the index price is between
the purchased put strike price and the sold call strike price, no payments are due from either party, (4) if the index price is below
the floor price, the Company will receive the difference between the floor price and the index price.

 The Company had no agreements
in place classified as costless collars as of December 31, 2024

 F- 19

 The following table sets forth the derivative
volumes by period as of December 31, 2023 for the Company:

 Price collars

 Period

 Volume
 (Bbls/month)

 floor price
 ($/Bbl)

 ceiling price
 ($/Bbl)

 sold call
 ($/Bbl)

 Q1-Q2 2024

 9,000

 $
 70.00

 $
 91,90

 $
 91.90

 Q3-Q4 2024

 9,000

 $
 70.00

 $
 85.50

 $
 85.50

 Crude price differential swaps

 During the year ended
December 31, 2023, the Company has entered into commodity swap contracts that are effective over the next 1 to 24 months and are used
to hedge against location price risk of the respective commodity resulting from supply and demand volatility and protect cash flows against
price fluctuations.

 The following table reflects
the weighted-average price of open commodity swap contracts as of December 31, 2024:

 Commodity Swaps

 Volume

 Period

 (Bbls/month)

 price ($/Bbl)

 Q1-Q4 2024

 5,000

 $
 70.21

 Q1-Q4 2025

 5,000

 $
 70.21

 The following table reflects
the weighted-average price of open commodity swap contracts as of December 31, 2023:

 Commodity Swaps

 Volume

 Period

 (Bbls/month)

 price ($/Bbl)

 Q1-Q4 2024

 3,000

 $
 71.30

 Q1-Q4 2025

 3,000

 $
 67.96

 Derivative Assets and Liabilities

 As of December 31,
2024 and 2023, the Company is conducting derivative activities with one counterparty, which is secured by the lender in the Company's
bank credit facility. The Company believes the counterparty is acceptable credit risk, and the credit worthiness of the counterparty is
subject to periodic review. The assets and liabilities are netted given that all positions are held by a single counterparty and subject
to a master netting arrangement. The combined fair value of derivatives included in the accompanying consolidated balance sheets as of
December 31, 2024 and 2023 is summarized below.

 As of December 31, 2024 (Successor)

 Gross fair value

 Amounts netted

 Net fair value

 Commodity derivatives:

 Short-term derivative asset

 $
 151,303

 $
 ( 44,906
)

 $
 106,397

 Long-term derivative asset

 —

 —

 —

 Short-term derivative liability

 ( 44,906
)

 ( 44,906
)

 —

 Long-term derivative liability

 —

 —

 —

 Total derivative asset

 $
 106,397

 F- 20

 As of December 31, 2023 (Successor)

 Gross fair
 value

 Amounts
 netted

 Net fair
 value

 Commodity derivatives:

 Short-term derivative asset

 $
 583,035

 $
 ( 191,547
)

 $
 391,488

 Long-term derivative asset

 76,199

 —

 76,199

 Short-term derivative liability

 ( 191,547
)

 ( 191,547
)

 —

 Long-term derivative liability

 —

 —

 —

 Total derivative liability

 $
 467,687

 The effects of the Company's derivatives
on the consolidated statements of operations are summarized below:

Year ended
 2024

 2023

 November 14,
 2023

 Total gain on unsettled derivatives

 $
 ( 361,290
)

 $
 443,349

 $
 1,215,693

 Total loss on settled derivatives

 ( 489,084
)

 ( 102,541
)

 ( 1,163,736
)

 Net gain (loss) on derivatives

 $
 ( 850,374
)

 $
 340,808

 $
 51,957

 NOTE 5 — LONG-TERM DEBT AND
NOTES PAYABLE

 The Company's debt instruments are as follows:

 2024

 2023

 Senior Secured Term Loan

 $
 23,696,417

 $
 27,680,703

 Seller Promissory Note

 15,000,000

 15,000,000

 Merchant Cash Advances

 948,982

 -

 Convertible Notes Payable at fair value

 891,363

 -

 Private loans

 3,556,750

 3,469,500

 Total

 44,093,512

 46,150,203

 Less: unamortized financing cost

 ( 834,853
)

 ( 2,147,346
)

 Less: current portion including amortization

 ( 9,080,910
)

 ( 6,516,651
)

 Long-term debt, net of current portion

 $
 34,177,749

 $
 37,486,206

 Senior Secured Term Loan Agreement

 In connection with the
Closing, HNRA (for purposes of the Loan Agreement, the "Borrower") and First International Bank & Trust ("FIBT"
or "Lender"), OpCo, SPAC Subsidiary, EON, and LH Operating, LLC (for purposes of the Loan Agreement, collectively, the "Guarantors"
and together with the Borrower, the "Loan Parties"), and FIBT entered into a Senior Secured Term Loan Agreement on November
15, 2023 (the "Loan Agreement"), setting forth the terms of a senior secured term loan facility in an aggregate principal
amount of $ 28,000,000 (the "Term Loan").

 Pursuant to the terms
of the Term Loan Agreement, the Term Loan was advanced in one tranche on the Closing Date. The proceeds of the Term Loan were used to
(a) fund a portion of the purchase price, (b) partially fund a debt service reserve account funded with $ 2,600,000 at the Closing
Date, (c) pay fees and expenses in connection with the purchase and the closing of the Term Loan and (e) other general corporate purposes.
The Term Loan accrues interest at a per annum rate equal to the FIBT prime rate plus 6.5 % and fully matures on the third anniversary of
the Closing Date ("Maturity Date"). Payments of principal and interest will be due on the 15 th day of
each calendar month, beginning December 15, 2023, each in an amount equal to the Monthly Payment Amount (as defined in the Term Loan Agreement),
except that the principal and interest payment due on the Maturity Date will be in the amount of the entire remaining principal amount
of the Term Loan and all accrued but unpaid interest then outstanding. An additional one-time payment of principal is due on the date
the annual financial report for the year ending December 31, 2024, is due to be delivered by Borrower to Lender in an amount that Excess
Cash Flow (as defined in the Term Loan Agreement) exceeds the Debt Service Coverage Ratio (as defined in the Term Loan Agreement) of 1.35x
as of the end of such quarter; provided that in no event shall the amount of the payment exceed $5,000,000. As of December 31, 2024, the
Company had no such Excess Cash Flow and no additional repayment was required.

 F- 21

 The Borrower may elect
to prepay all or a portion greater than $1,000,000 of the amounts owed prior to the Maturity Date. In addition to the foregoing, the Borrower
is required to prepay the Term Loan with the net cash proceeds of certain dispositions and upon the decrease in value of collateral.

 On the Closing Date,
Borrower deposited $ 2,600,000 into a Debt Service Reserve Account (the "Debt Service Reserve Account") and, within 60 days
following the Closing Date, Borrower must deposit such additional amounts such that the balance of the Debt Service Reserve Account is
equal to $ 5,000,000 at all times. The Debt Service Reserve Account may be used by Lender at any time and from time to time, in Lender's
sole discretion, to pay (or to supplement Borrower's payments of) the obligations due under the Term Loan Agreement.

 On
April 18, 2024, the Company and FIBT entered into a Second Amendment to Term Loan Agreement (the "Amendment") effective as
of March 31, 2024. Pursuant to the Amendment, the Term Loan Agreement was modified to provide that the Company must, on or before December
31, 2024, deposit funds in a Debt Service Reserve Account (as defined in the Loan Agreement) such that the balance of the account equals
$ 5,000,000 and FIBT waived the provision that such amount had to be deposited within 60 days of the closing date of the Loan Agreement.
In addition, the Amendment provides that, if at any time prior to December 31, 2024, the Company or any of its affiliates enter into a
sale leaseback transaction with respect to any of its equipment, the Company will deposit an amount equal to the greater of (A) $ 500,000
or (B) 10 % of the proceeds of such transaction into the Debt Service Reserve Account on the effective date of such sale and leaseback
transaction.

 The Term Loan Agreement
contains affirmative and restrictive covenants and representations and warranties. The Loan Parties are bound by certain affirmative covenants
setting forth actions that are required during the term of the Term Loan Agreement, including, without limitation, certain information
delivery requirements, obligations to maintain certain insurance, and certain notice requirements. Additionally, the Loan Parties from
time to time will be bound by certain restrictive covenants setting forth actions that are not permitted to be taken during the term of
the Term Loan Agreement without prior written consent, including, without limitation, incurring certain additional indebtedness, entering
into certain hedging contracts, consummating certain mergers, acquisitions or other business combination transactions, consummating certain
dispositions of assets, making certain payments on subordinated debt, making certain investments, entering into certain transactions with
affiliates, and incurring any non-permitted lien or other encumbrance on assets. The Term Loan Agreement also contains other customary
provisions, such as confidentiality obligations and indemnification rights for the benefit of the Lender. The Company was in compliance
with covenants of the Term Loan Agreement as of December 31, 2024.

 For year ended December
31, 2024, the Company amortized $ 425,837 to interest expense related to deferred finance costs on the Term Loan Agreement. For the period
from November 15, 2023 to December 31, 2023, the Company amortized $ 56,422 to interest expense. As of December 31, 2024, the principal
balance on the Term Loan was $ 23,696,417, unamortized financing costs was $ 611,938 and accrued interest was $ 171,714. As of December
31, 2023, the principal balance on the Term Loan was $ 27,680,703, unamortized financing costs was $ 1,036,895 and accrued interest
was $ 173,004.

 Pledge and Security Agreement

 In connection with the
Term Loan, FIBT and the Loan Parties entered into a Pledge and Security Agreement on November 15, 2023 (the "Security Agreement"),
whereby the Loan Parties granted a senior security interest to FIBT on all assets of the Loan Parties, except certain excluded assets
described therein, including, among other things, any interests in the ORR Interest.

 F- 22

 Guaranty Agreement

 In connection with the
Term Loan, FIBT and the Loan Parties entered into a Guaranty Agreement on November 15, 2023 (the " Guaranty Agreement "),
whereby the Guarantors guaranteed payment and performance of all Loan Parties under the Term Loan Agreement.

 Subordination Agreement

 In connection with the
Term Loan and the Seller Promissory Note, the Lenders, the Sellers and the Company entered into a Subordination Agreement whereby the
Sellers cannot require repayment, nor commence any action or proceeding at law or equity against the Company or the Lenders to recover
any or all of the unpaid Seller Promissory Note until the Term Loan is repaid in full.

 Seller Promissory
Note

 In connection with the Closing, OpCo issued the
Seller Promissory Note to EON Royalty in the principal amount of $ 15,000,000. The Seller Promissory Note matured on May 15, 2024, bears
an interest rate equal 18 % per annum, and contains no penalty for prepayment. The Seller Promissory Note is subordinated to the Term Loan
as discussed above. Accrued interest on the Seller Promissory Note was $ 2,952,123 as of December 31, 2024. As a result of the Subordination
Agreement, the Company has classified the Seller Promissory Note as a long-term liability on the consolidated balance sheet.

 Private Notes Payable

 Prior to December 31, 2023 the Company entered
into various unsecured promissory notes with existing investors of the Company for total principal of $ 5,434,000 (the "Private Notes
Payable"). The Private Notes Payable bear interest at the greater of 15 % or the highest rate allowed under law, and have a stated
maturity date of the five-year anniversary of the closing of the MIPA. The investors may demand repayment beginning six months after the
closing of the MIPA. The investors also received common stock warrants equal to the principal amount funded. Each warrant entitles the
holder to purchase three quarters of one share of common stock at a price of $ 11.50. Each warrant will become exercisable on the closing
date of the MIPA and is exercisable through the five-year anniversary of the promissory note agreement date. The warrants also grant the
holder a one-time redemption right to require the Company pay the holder in cash equal to $ 1 per warrant 18 months following the closing
of the MIPA, or May 15, 2025. A total of 5,434,000 warrants were issued to these investors. Based on the redemption right present in these
warrants, the warrants are accounted for as a liability in accordance with ASC 480 and ASC 815 and a debt discount on the Private Notes
Payable, with the changes in fair value of the warrants recognize in the statement of operations.

 During the year ended
December 31, 2024, the Company received an additional $ 450,000 in cash proceeds under unsecured promissory notes with investors with
the same terms as those described above. The Company issued an additional 450,000 warrants with an exercise price of $ 11.50 to
these investors in connection with the agreements. There are a total of 5,884,000 warrants issued to these investors.

 On November 13, 2023, the Company entered into
exchange agreements ("Exchange Agreements") with certain holders of Private Notes Payable, The Company issued 451,563 shares
of Class A common stock to certain holders of the Private Notes Payable to settle aggregate principal of $ 2,089,500 and aggregate accrued
interest of $ 168,271, and recognized a loss on extinguishment of $ 2,280,437 based on the fair value of the shares of common stock issued
at the date of the Exchange Agreements.

and certain note holders, including White Lion, entered into exchange agreements whereby the holders agreed to exchange their outstanding
working capital notes totaling $ 300,000 and connected warrants with a fair value of $ 309,960 at the time of the exchange, for new convertible
notes with an aggregate principal amount of $ 600,000. As a result of the exchange, which added a substantive conversion feature, the Company
determined the exchange qualified for extinguishment accounting and recorded a loss on extinguishment of $ 88,660.

 F- 23

 The Company is amortizing the debt discount through
a period of nine months from the Closing Date. The Company recognized amortization of debt discount of $ 1,519,786 during the year ended
December 31, 2024. The Company recognized amortization of debt discount of $ 1,135,131 during the period from November 15, 2023 to December
31, 2023. Accrued interest on the promissory notes was $ 145,761 and $ 158,801 as of December 31, 2024 and 2023, respectively.

 Convertible Notes Payable

and certain note holders entered into exchange agreements whereby the holders agreed to exchange their outstanding working capital notes
totaling $ 300,000 and connected warrants with a fair value of $ 309,960 at the time of the exchange, for new convertible notes. The Convertible
notes have a maturity of three years after the issuance date, accrue interest at a rate of 7.5 %, and are convertible into Class A common
shares at a rate of 90 % multiplied by the average of the four lowest VWAP trading prices during the seven day trading period prior to
the conversion date. The Company evaluated the instrument under ASC 480 and determined the instrument should be accounted for at fair
value due to the variable share settlement. The Company estimate the fair value to be $ 698,620 at issuance of the notes payable, and estimated
the fair value to be $ 891,364 as of December 31, 2024. The Company recognized a loss of $ 192,744 during the year ended December 31, 2024.

 Accrued interest on the promissory notes was $ 11,590
as of December 31, 2024.

 Predecessor Revolving Credit Facility

 On June 25, 2019, the Predecessor entered into
a credit agreement (the "Credit Agreement") with a banking institution for a revolving credit facility (the "Predecessor
Revolver") that provided for a maximum facility amount of $ 50,000,000 and a letter of credit sublimit not to exceed ten percent
of the available borrowing base. As of December 31, 2022, the Company had $ 26,750,000 of outstanding borrowings under the Revolver and
$ 702,600 of letters of credit outstanding As of November 14, 2023, the balance of the Predecessor Revolver was $ 23,750,000. The Predecessor
Revolver was not assumed by the Company in the MIPA, and was settled by the Sellers from its proceeds from the sale of EON to the Company.

 Future Maturities of Long-term debt

 The following summarizes the Company's maturities
of all debt instruments described above:

 Principal

 Fiscal year ended:

 December 31, 2025

 $
 9,303,826

 December 31, 2026

 5,072,930

 December 31, 2027

 29,425,393

 December 31, 2028

 —

 Total

 $
 43,802,149

 NOTE 6 — FORWARD
PURCHASE AGREMENT

 Forward Purchase
Agreement

 On November 2, 2023,
the Company entered into an agreement with (i) Meteora Capital Partners, LP ("MCP"), (ii) Meteora Select Trading Opportunities
Master, LP ("MSTO"), and (iii) Meteora Strategic Capital, LLC ("MSC" and, collectively with MCP and MSTO, "FPA
Seller") (the "Forward Purchase Agreement") for OTC Equity Prepaid Forward Transactions. For purposes of the Forward
Purchase Agreement, the Company is referred to as the "Counterparty". Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to such terms in the Forward Purchase Agreement.

 F- 24

 The Forward Purchase
Agreement provides for a prepayment shortfall in an amount in U.S. dollars equal to 0.50 % of the product of the Recycled Shares and the
Initial Price (defined below). FPA Seller in its sole discretion may sell Recycled Shares (i) at any time following November 2, 2023 (the
"Trade Date") at prices greater than the Reset Price or (ii) commencing on the 180th day following the Trade Date at any sales
price, in either case without payment by FPA Seller of any Early Termination Obligation until such time as the proceeds from such sales
equal 100 % of the Prepayment Shortfall (as set forth under the section entitled "Shortfall Sales" in the Forward Purchase
Agreement) (such sales, "Shortfall Sales," and such Shares, "Shortfall Sale Shares"). A sale of Shares is only
(a) a "Shortfall Sale," subject to the terms and conditions herein applicable to Shortfall Sale Shares, when a Shortfall Sale
Notice is delivered under the Forward Purchase Agreement, and (b) an Optional Early Termination, subject to the terms and conditions of
the Forward Purchase Agreement applicable to Terminated Shares, when an OET Notice is delivered under the Forward Purchase Agreement,
in each case the delivery of such notice in the sole discretion of the FPA Seller (as further described in the "Optional Early Termination"
and "Shortfall Sales" sections in the Forward Purchase Agreement).

 Following the Closing,
the reset price (the "Reset Price") will be $ 10.00; provided that the Reset Price shall be reduced pursuant to a Dilutive
Offering Reset immediately upon the occurrence of such Dilutive Offering. The Purchased Amount subject to the Forward Purchase Agreement
shall be increased upon the occurrence of a Dilutive Offering Reset to that number of Shares equal to the quotient of (i) the Purchased
Amount divided by (ii) the quotient of (a) the price of such Dilutive Offering divided by (b) $ 10.00.

 From time to time and
on any date following the Trade Date (any such date, an "OET Date") and subject to the terms and conditions in the Forward
Purchase Agreement, FPA Seller may, in its absolute discretion, terminate the Transaction in whole or in part by providing written notice
to Counterparty (the "OET Notice"), by the later of (a) the fifth Local Business Day following the OET Date and (b) no later
than the next Payment Date following the OET Date, (which shall specify the quantity by which the Number of Shares shall be reduced (such
quantity, the "Terminated Shares")). The effect of an OET Notice shall be to reduce the Number of Shares by the number of
Terminated Shares specified in such OET Notice with effect as of the related OET Date. As of each OET Date, Counterparty shall be entitled
to an amount from FPA Seller, and the FPA Seller shall pay to Counterparty an amount, equal to the product of (x) the number of Terminated
Shares and (y) the Reset Price in respect of such OET Date. The payment date may be changed within a quarter at the mutual agreement of
the parties.

 The "Valuation
Date" will be the earlier to occur of (a) the date that is three (3) years after the date of the closing of the Purchase & Sale
(the date of the closing of the Purchase & Sale, the "Closing Date") pursuant to the A&R MIPA, (b) the date specified
by FPA Seller in a written notice to be delivered to Counterparty at FPA Seller's discretion (which Valuation Date shall not be
earlier than the day such notice is effective) after the occurrence of any of (w) a VWAP Trigger Event, (x) a Delisting Event, (y) a Registration
Failure or (z) unless otherwise specified therein, upon any Additional Termination Event, and (c) the date specified by FPA Seller in
a written notice to be delivered to Counterparty at FPA Seller's sole discretion (which Valuation Date shall not be earlier than
the day such notice is effective). The Valuation Date notice will become effective immediately upon its delivery from FPA Seller to Counterparty
in accordance with the Forward Share Purchase Agreement.

 On the "Cash Settlement
Payment Date," which is the tenth Local Business Day immediately following the last day of the Valuation Period, the FPA Seller
will remit to the Counterparty an amount equal to the Settlement Amount and will not otherwise be required to return to the Counterparty
any of the Prepayment Amount and the Counterparty shall remit to the FPA Seller the Settlement Amount Adjustment; provided, that if the
Settlement Amount less the Settlement Amount Adjustment is a negative number and either clause (x) of Settlement Amount Adjustment applies
or the Counterparty has elected pursuant to clause (y) of Settlement Amount Adjustment to pay the Settlement Amount Adjustment in cash,
then neither the FPA Seller nor the Counterparty shall be liable to the other party for any payment under the Cash Settlement Payment
Date section of the Forward Purchase Agreement.

 The FPA Seller has agreed
to waive any redemption rights with respect to any Recycled Shares in connection with the Closing, as well as any redemption rights under
the Company's certificate of incorporation that would require redemption by the Company.

 Pursuant to the Forward
Purchase Agreement, the FPA Seller obtained 50,070 shares ("Recycled Shares") and such purchase price of $ 545,356, or $ 10.95 per
share, was funded by the use of HNRA trust account proceeds as a partial prepayment ("Prepayment Amount"), and the FPA
Seller may purchase an additional 504,425 additional shares under the Forward Purchase Agreement, for the Forward Purchase Agreement redemption 3 years
from the date of the Acquisition ("Maturity Date").

 F- 25

 The FPA Seller received
an additional $ 1,004,736 in cash from the Trust Account related to reimbursement for 90,000 shares of Class A Common stock purchased by
the FPA Seller in connection with the transactions at the redemption price of $ 10.95 per share and transaction fees.

 The Maturity Date may
be accelerated, at the FPA Sellers' discretion, if the Company share price trades below $ 3.00 per share for any 10 trading
days during a 30 -day consecutive trading-day period or the Company is delisted. The Company's common stock traded below minimum
trading price during the period from November 15, 2023 to December 31, 2023, but no acceleration of the Maturity Date has been executed
by the FPA Seller to date.

 The fair value of the
prepayment was $ 14,257,648 at inception of the agreement, $ 6,066,324 as of the Closing date and was $ 6,067,094 as of December 31, 2023,
and is included as a reduction of additional paid-in capital on the consolidated statement of stockholders' equity. The estimated
fair value of the Maturity Consideration is $ 1,704,416. The Company recognized a gain from the change in fair value of the Forward Purchase
Agreement of $ 561,099 during the year ended December 31, 2024. The Company recognized a gain from the change in fair value of the Forward
Purchase Agreement of $ 3,268,581 during the period from November 15, 2023 to December 31, 2023.

 On November 15, 2024, the Company entered into
a Confidential Rescission, Settlement, and Release Agreement with the FPA Seller whereby the parties mutually agreed to rescind the Forward
Purchase Agreement and related agreements between the parties, which as a result, any transactions, notices or other obligations thereunder
are void ab initio. The parties also agreed to release each other of all claims related to the Forward Purchase Agreement, and
in exchange for such release, the Company agreed to issue to the FPA Seller 450,000 restricted Class A Common shares which had a fair
value of $ 450,000 based on the closing price of the Company's common stock at the agreement date. The Company recognized a gain
on settlement of the FPA liability of $ 82,998, which is included in Gain on Extinguishment of Liabilities on the Company's consolidated
statement of operations for the year ended December 31, 2024.

 NOTE 7 — STOCKHOLDERS'
EQUITY

 As of December 31, 2024, there were 10,323,205
Class A common shares and 500,000 Class B common shares outstanding.

 On November 15, 2023, as contemplated by the MIPA,
HNRA filed the Second A&R Charter with the Secretary of State of the State of Delaware, pursuant to which the number of authorized
shares of HNRA's capital stock, par value $ 0.0001 per share, was increased to 121,000,000 shares, consisting of (i) 100,000,000
shares of Class A common stock, par value $ 0.0001 per share (the "Class A Common Stock"), (ii) 20,000,000 shares of Class
B common stock, par value $ 0.0001 per share (the "Class B Common Stock"), and (iii) 1,000,000 shares of preferred stock, par
value $ 0.0001 per share.

 As part of the Closing
on November 15, 2023, all previously issued and outstanding shares of HNRA common stock were converted into Class A common shares. Prior
to the Closing, there were 3,006,250 shares of non-redeemable common stock and 4,509,403 shares of redeemable common stock outstanding.
In connection with the Business Combination, holders of 3,323,707 shares of common stock properly exercised their right to have their
public shares redeemed for a pro rata portion of the Trust Account. The holders received $ 36,383,179 of cash proceeds from the Trust Account.

 As part of the consideration
to effect the Acquisition, the Company issued 2,000,000 Class B common shares to the Sellers. Immediately upon the Closing, EON Royalty
exercised the OpCo Exchange Right as it relates to 200,000 OpCo Class B units (and 200,000 shares of Class B Common Stock) and received
 200,000 shares of Class A common stock.

 During the year ended
December 31, 2024, EON Royalty exercised its OpCo Exchange Right related to 1,300,000 shares of Class B units and received 1,300,000 shares
of Class A Common stock. As a result of the exchange, a total of $ 8,801,000 was reclassified from noncontrolling interest to additional
paid in capital.

 F- 26

 Class A Common Stock Issuances

 In consideration for entering into the Backstop
agreement, the Company issues the Founders an aggregate of 134,500 shares of Class A Common Stock, with a fair value of $ 910,565 based
on the closing price of the Company's Class A Common Stock on November 15, 2023 of $ 6.77 per share. Also, in connection with the
Closing, the Company issued 20,000 shares of common stock with a fair value of $ 135,400 to two consultants for due diligence costs. The
stock based compensation expense related to these issuances is included in general and administrative expenses on the Successor consolidated
statement of operations. The Company also issued 89,000 shares of common stock to a company controlled by the Company's CEO in satisfaction
of $ 900,000 of the finder's fee. See Note 9.

issued 27,963 shares of Class A common stock to officers and employees for shares pledged as collateral on the Company's Senior
Secured Term Loan, which vest immediately. The Company estimated the fair value of the shares using the closing stock price on the date
of the grant of $ 2.01 and recognized stock-based compensation expense of $ 56,708.

issued 75,000 shares of Class A common stock to a consultant, which vest annually over three years. The Company estimated the fair value
of the shares using the closing stock price on the date of the grant of $ 2.06 per share. The Company recognized $ 30,042 of stock-based
compensation expense related to this award and expense to recognize an additional $ 124,458 over the next 2.5 years.

issued 60,000 shares of Class A common stock to the Company's former CEO pursuant to his termination agreement, which vested immediately.
The Company estimated the fair value of the shares using the closing stock price on the date of the grant of $ 1.80 per share and recognized
stock-based compensation expense of $ 108,000.

 During the year ended December 31, 2024, the Company issued 260,000 Class A Common shares to settle outstanding accrued payables of $ 260,000 and recognized a loss of approximately $ 76,000
for the difference in the fair value of the shares issued and the payables balance. The Company also issued 34,000 shares to consultants
with a fair value of $ 32,200 for services rendered to the Company.

 On October 18, 2024, the Company entered into
a consulting agreement with a third party for financing services on a month to month basis. As compensation for services the Company
will pay the consultant a fee of $ 20,000 per month consisting of $ 5,000 in cash and $ 15,000 in Class A common shares based on the average
closing price for the last five trading days of the prior calendar month. The consultant earned 43,800 shares for services through December
31, 2024, which have not yet been issued, and the Company recognized stock-based compensation expense of $ 36,200.

 Restricted Stock Awards

 On March 4, 2024, the Compensation Committee of
the Board of Directors approved awards of restricted stock units ("RSU's") to various employees, non-employee directors
and consultants. Non-employee directors received an aggregate of 224,500 RSU's, with 112,000 RSU's vesting over 3 years beginning
November 15, 2024, and 112,500 RSU's fully vesting at November 15, 2024. Employees received a total of 225,000 RSU's, including
 50,000 RSU's each to the Company's CEO, CFO and General Counsel pursuant to their employment agreements. A total of 35,000
RSU's of the employee RSU's vest immediately, with the remainder over 3 years beginning November 15, 2024. The awards also
included 60,000 RSU's pursuant to the agreement with RMH, Ltd., and 30,000 RSU's to the Company's former President.
These consultant awards vest on November 15, 2024. The Company estimated the fair value of the RSU's using the stock price of $ 1.97
per share on the date of grant.

 On December 16, 2024, the Compensation Committee
of the Board of Directors approved 30,000 awards of restricted stock units ("RSU's") to various employees. The Company
estimated the fair value of the RSU's using the stock price of $ 0.593 per share on the date of grant. The RSU's vest over
 3 years beginning December 16, 2025.

 As of December 31, 2024, 213,167 shares of restricted
common stock have vested with the remaining 266,333 restricted shares to vest. In connection with the vesting of RSU's, an aggregate
of 13,394 shares were withheld and cancelled for withholdings taxes.

 F- 27

 Class A Common Stock Options

 During the year ended December 31, 2024, the Compensation
Committee of the Board of Directors approved common stock options to purchase 235,000 shares of Class A common stock to various employees
including 75,000 to the Company's CEO and 50,000 to the CFO. The options have a term of 10 years and an exercise price of $ 2.02
per share, which options vest in 3 equal annual installments.

 The following table reflects the weighted average
assumptions used to estimate the fair value of stock options granted during the year ended December 31, 2024:

 2024

 Volatility

 110.42
 %

 Expected life (years)

 6.0

 Risk-free interest rate

 4.26
 %

 Dividend rate

 —

 %

 The following table summarizes the stock option
activity for the years ended December 31, 2024 and 2023:

 Options

 Weighted-

 Per Share

 Outstanding, December 31, 2023

 -

 $
 -

 Granted

 235,000

 $
 2.02

 Exercised

 -

 $
 -

 Forfeited

 -

 $
 -

 Expired

 -

 $
 -

 Outstanding and expected to vest, December 31, 2024

 235,000

 $
 2.02

 The following table discloses information regarding
outstanding and exercisable options at December 31, 2024:

 Outstanding

 Exercisable

 Exercise Price Range

 Weighted Average
 Remaining
 Life (Years)

 Exercise

Price

 $
 2.02

 235,000

 $
 2.02

 9.19

 -

 $
 -

 235,000

 $
 2.02

 9.19

 -

 $
 -

 Aggregate intrinsic value is calculated as the
difference between the exercise price of the underlying stock option and the fair value of the Company's common stock for stock
options that were in-the-money at period end. As of December 31, 2024, the intrinsic value for the options vested and outstanding was
$ 0.

 Class A Common Stock Warrants

issued 1,200,000 common stock warrants to a vendor as an incentive to settle outstanding payable amounts owed. The warrant has a term
of 2 years, an exercise price of $ 0.75 and is exercisable immediately. Upon exercise, the vendor will reduce the payable amount owed based
on the exercised amount in lieu of paying cash to the Company.

 The following table reflects the weighted average
assumptions used to estimate the fair value of stock warrants granted during the year ended December 31, 2024:

 2024

 Volatility

 79.42
 %

 Expected life (years)

 Risk-free interest rate

 3.95
 %

 Dividend rate

 —

 %

 F- 28

 The warrants had an estimated fair value of $ 981,826
which was recognized as stock-based compensation expense during the year ended December 31, 2024.

 The following table summarizes the stock warrant
activity for the years ended December 31, 2024 and 2023:

 Warrants

 Weighted-

 Per Share

 Outstanding and exercisable, January 1, 2023

 -

 $
 -

 Granted

 14,564,000

 $
 11.50

 Exercised

 -

 $
 -

 Forfeited

 -

 $
 -

 Expired

 -

 $
 -

 Outstanding, December 31, 2023

 14,564,000

 $
 11.50

 Granted

 1,650,000

 $
 2.82

 Exercised

 $
 -

 Forfeited

 ( 300,000
)

 $
 11.50

 Expired

 -

 $
 -

 Outstanding and expected to vest, December 31, 2024

 15,914,000

 $
 10.69

 The following table discloses information regarding
outstanding and exercisable warrants at December 31, 2024:

 Outstanding

 Exercisable

 Exercise Price Range

 Warrant

 Weighted Average
 Remaining
 Life (Years)

 Warrant

 $
 0.75

 1,200,000

 $
 0.75

 1.80

 1,200,000

 $
 0.75

 $
 11.50

 14,714,000

 $
 11.50

 3.77

 14,714,000

 $
 11.50

 15,914,000

 10.69

 3.62

 15,914,000

 3.62

 Aggregate intrinsic value is calculated as the
difference between the exercise price of the underlying stock option and the fair value of the Company's common stock for stock
options that were in-the-money at period end. As of December 31, 2024, the intrinsic value for the warrants vested and outstanding was
$ 62,820.

 The Company recognized total stock-based compensation
expense of $ 2,778,991 relates to class A common shares issued, RSU vesting, common stock option vesting, and warrants issued during the
year ended December 31, 2024 and expects to recognize an additional $ 750,947 through December 31, 2027 assuming all awards vest.

 Non-Redemption Agreement

 On November 13, 2023,
the Company entered into an agreement with (i) Meteora Capital Partners, LP ("MCP"), (ii) Meteora Select Trading Opportunities
Master, LP ("MSTO"), and (iii) Meteora Strategic Capital, LLC ("MSC" and, collectively with MCP and MSTO, "Backstop
Investor") (the "Non-Redemption Agreement") pursuant to which Backstop Investor agreed to reverse the redemption of
 600,000 shares of common stock, par value $ 0.0001 per share, of HNRA ("Common Stock"). Immediately upon consummation of the
closing of the transactions contemplated by the MIPA (the "Closing"), HNRA paid the Backstop Investor, in respect of the Backstop
Investor Shares, an amount in cash equal to (x) the Backstop Investor Shares, multiplied by (y) the Redemption Price (as defined in HNRA's
amended and restated certificate of incorporation) minus $ 5.00, or $ 3,567,960. The Company paid the BackStop Investor a total of $ 6,017,960
in cash related to the Non-Redemption Agreement from proceeds of the Trust Account.

 F- 29

 Common Stock Purchase Agreement

 On October 17, 2022, the Company entered into
a common stock purchase agreement (as amended, the "Common Stock Purchase Agreement") and a related registration rights agreement
(the "White Lion RRA") with White Lion Capital, LLC, a Nevada limited liability company ("White Lion"). On March
7, 2024, we entered into an Amendment No. 1 to the Common Stock Purchase Agreement. Pursuant to the Common Stock Purchase Agreement, the
Company has the right, but not the obligation to require White Lion to purchase, from time to time, up to $ 150,000,000 in aggregate gross
purchase price of newly issued shares of the Company's common stock, par value $ 0.0001 per share, subject to certain limitations
and conditions set forth in the Common Stock Purchase Agreement. Capitalized terms used but not otherwise defined herein shall have the
meaning given to such terms by the Common Stock Purchase Agreement.

 Subject to the satisfaction of certain customary
conditions including, without limitation, the effectiveness of a registration statement registering the shares issuable pursuant to the
Common Stock Purchase Agreement, the Company's right to sell shares to White Lion will commence on the effective date of the registration
statement and extend until December 31, 2026. During such term, subject to the terms and conditions of the Common Stock Purchase Agreement,
the Company may notify White Lion when the Company exercises its right to sell shares (the effective date of such notice, a "Notice
Date"). The number of shares sold pursuant to any such notice may not exceed (i) the lower of (a) $ 2,000,000 and (b) the dollar
amount equal to the product of (1) the Effective Daily Trading Volume (2) the closing price of common stock on the Effective Date (3)
 400 % and (4) 30 %, divided by the closing price of common stock on NYSE American preceding the Notice Date and (ii) a number of shares
of common stock equal to the Average Daily Trading Volume multiplied by the Percentage Limit.

 The purchase price to be paid by White Lion for
any such shares will equal 96 % of the lowest daily volume-weighted average price of common stock during a period of two consecutive trading
days following the applicable Notice Date.

 The Company will have the right to terminate the
Common Stock Purchase Agreement at any time after Commencement, at no cost or penalty, upon three trading days' prior written notice.
Additionally, White Lion will have the right to terminate the Common Stock Purchase Agreement upon three days ' prior written notice
to the Company if (i) there is a Fundamental Transaction, (ii) the Company is in breach or default in any material respect of the White
Lion RRA, (iii) there is a lapse of the effectiveness, or unavailability of, the Registration Statement for a period of 45 consecutive
trading days or for more than an aggregate of 90 trading days in any 365-day period, (iv) the suspension of trading of the common stock
for a period of five consecutive trading days, (v) the material breach of the Common Stock Purchase Agreement by the Company, which breach
is not cured within the applicable cure period or (vi) a Material Adverse Effect has occurred and is continuing. No termination of the
Common Stock Purchase Agreement will affect the registration rights provisions contained in the White Lion RRA.

 In consideration for the commitments of White Lion, as described above,
during the period from November 16, 2023 to December 31, 2023 (Successor) the Company issued 138,122 shares of Class A common stock to
White Lion in satisfaction of a $ 1,500,000 commitment fee pursuant to the terms of the Common stock Purchase Agreement at a price of $ 10.86
per share, which is include in general and administrative expenses on the consolidated statement of operations of the Successor as a result
of the uncertainty at the issuance date regarding the ability to utilize the Common Stock Purchase Agreement until an effective registration
statement was in place.

 On March 7, 2024, the Company entered into an Amendment No. 1 to Common
Stock Purchase Agreement (the "Amendment") with White Lion. Pursuant to the Amendment, the Company and White Lion agreed to
an aggregate fixed number of Commitment Shares equal to 440,000 shares of common stock to be issued to White Lion in consideration for
commitments of White Lion under the Common Stock Purchase Agreement, which the Company agreed to include all of the Commitment Shares
on the Initial Registration Statement filed by the Company. The Company recognized share-based compensation expense of $ 573,568 related
to the Amendment due to uncertainty at the issuance date regarding the ability to utilize the Common Stock Purchase Agreement until an
effective registration statement was in place and issued the additional 301,878 shares of Class A Common stock in June 2024.

 Finally, pursuant to
the Amendment, the Company's right to sell shares of common stock to White Lion will
now extend until December 31, 2026.

 F- 30

 On June 17, 2024, the
Company entered into an Amendment No. 2 to Common Stock Purchase Agreement (the "2nd Amendment") with White Lion. Pursuant
to the 2nd Amendment, the Company and White Lion agreed to amend the process of a Rapid Purchase, whereby the parties will close on the
Rapid Purchase on the trading day the notice of the applicable Rapid Purchase is given. The 2nd Amendment, among other things, also removed
the maximum number of shares required to be purchased upon notice of a Rapid Purchase, added a limit of 100,000 shares of Common
Stock per individual request, and revised the purchase price of a Rapid Purchase to equal the lowest traded price of Common Stock during
the one hour following White Lion's acceptance of the Rapid Purchase for each request. In addition, White Lion agreed that, on any
single business day, it shall not publicly resell an aggregate amount of Commitment Shares in an amount that exceeds 7 % of the daily
trading volume of the Common Stock for such business day, excluding any trades before or after regular trading hours and any block trades.

 In addition, the Company
may, from time to time while a purchase notice is active, issue a Rapid Purchase Notice to White Lion for the purchase of shares (not
to exceed 100,000 shares per individual request) at a purchase price equal to the lowest traded price of Common Stock during
the one hour following White Lion's acceptance of the Rapid Purchase for each request, and which the parties will close on the Rapid
Purchase on the trading day the notice of the applicable Rapid Purchase is given within two Business Days of the applicable Rapid Purchase
Date. Furthermore, White Lion agreed that, on any single Business Day, it shall not publicly resell an aggregate amount of Commitment
Shares in an amount that exceeds 7 % of the daily trading volume of our Class A Common Stock for the such preceding Business Day,
excluding any trades before or after regular trading hours and any block trades.

 In addition, pursuant
to the Amendment, the Company may, from time to time while a Purchase Notice is active, issue a Rapid Purchase Notice to White Lion which
the parties will close on the Rapid Purchase within two Business Days of the applicable Rapid Purchase Date. Furthermore, White Lion agreed
that, on any single Business Day, it shall not publicly resell an aggregate amount of Commitment Shares in an amount that exceeds 7 % of
the daily trading volume of the Common Stock for the preceding Business Day.

issued 2,230,000 shares under the Common Stock Purchase Agreement for $ 2,628,334 in net cash proceeds.

 Registration Rights Agreement (White Lion)

 Concurrently with the execution of the Common
Stock Purchase Agreement, the Company entered into the White Lion RRA with the White Lion in which the Company has agreed to register
the shares of common stock purchased by White Lion with the SEC for resale within 30 days of the consummation of a business combination.
The White Lion RRA also contains usual and customary damages provisions for failure to file and failure to have the registration statement
declared effective by the SEC within the time periods specified.

 The Common Stock Purchase Agreement and the White
Lion RRA contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations,
warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely
for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

 NOTE 8 — FAIR VALUE OF FINANCIAL
INSTRUMENTS:

 The fair value of the Company's assets and
liabilities, which qualify as financial instruments under FASB ASC 820, "Fair Value Measurement", approximates the carrying
amounts represented on the balance sheet.

 The Fair value is defined
as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market
participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

 Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

 Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

 Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 F- 31

 In some circumstances,
the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the
fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant
to the fair value measurement.

 Recurring Basis

 Assets and liabilities
measured at fair value on a recurring basis are as follows:

 Derivatives

 The Company's commodity
price derivatives primarily represent crude oil collar contracts (some with long calls), fixed price swap contracts and differential swap
contracts. The asset and liability measurements for the Company's commodity price derivative contracts are determined using Level
2 inputs. The asset and liability values attributable to the Company's commodity price derivatives were determined based on inputs
that include, but not limited to, the contractual price of the underlying position, current market prices, crude oil forward curves, discount
rates, and volatility factors. The Company had a net derivative asset of $ 106,397 and $ 467,687 as of December 31, 2024 and 2023, respectively.

 Convertible Note Liability

 Certain of the Company's
convertible note agreements contain features that contain conversion terms that may require the debt to be settled with a variable number
of shares based on discounted pricing to market of the Company's Class A Common Stock. Under ASC 480, the instrument is accounted
for at fair value, which are determined using level 3 inputs.

 The following table represents
the weighted average inputs used in calculating the fair value of the conversion features of the convertible notes on the date of issuance
and December 31, 2024:

 2024

 Issuance

 Date

 Term, in years

 2.92

 Expected volatility

 83.2
 %

 82.40
 %

 Risk-free interest rate

 4.27
 %

 4.25
 %

 Expected dividend yield

 —

 %

 —

 %

 The Company estimated
the present value of the convertible notes using an estimated 15 % discount rate and the three -year maturity period. The Company estimated
the aggregate fair value at issuance to be $ 698,620, and estimated the fair value at December 31, 2024 to be $ 891,364, resulting in a
loss on change in fair value of $ 192,744 for the year ended December 31, 2024.

 Forward Purchase Agreement

 The fair value upon issuance of the Forward Purchase
Agreement (both the FPA Put Option liability and Fixed Maturity Consideration) and the change in fair value is included in other expense,
net in the consolidated statements of operations and comprehensive loss. The fair value of the FPA was estimated using a Monte-Carlo Simulation
in a risk-neutral framework. Specifically, the future stock price is simulated assuming a Geometric Brownian Motion ("GBM").
For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted back to present.
Finally, the value of the forward is calculated as the average present value over all simulated paths. The Maturity Consideration was
also valued as part of this model as the timing of the payment of the Maturity Consideration may be accelerated if the Maturity Date is
accelerated. The model also considered the likelihood of a dilutive offering of common stock.

 F- 32

 On November 15, 2024, the Company entered into
a Confidential Rescission, Settlement, and Release Agreement with the FPA Seller whereby the parties mutually agreed to rescind the Forward
Purchase Agreement and related agreements between the parties, which as a result, any transactions, notices or other obligations thereunder
are void ab initio. The parties also agreed to release each other of all claims related to the Forward Purchase Agreement, and
in exchange for such release, the Company agreed to issue to the FPA Seller 450,000 restricted Class A Common shares with a fair value
of $ 450,000 based on the closing price of the Company's Class A common stock at the agreement date

 The following table represents the weighted average
inputs used in calculating the fair value of the prepaid forward contract and the Maturity Consideration as of November 15, 2024, the
date of settlement, and December 31, 2023:

 2024

 2023

 Stock price

 $
 1.00

 $
 2.03

 Term (in years)

 2.00

 2.88

 Expected volatility

 75.0
 %

 40.7
 %

 Risk-free interest rate

 4.22
 %

 3.96
 %

 Expected dividend yield

 —

 %

 —

 %

 The Company estimated
the likelihood of a Dilutive Offering at a price of $ 5.00 per share to be 50 % within nine months of December 31, 2023. The FPA estimated
fair value is considered a level 3 fair value measurement.

 Warrant Liability

 Based on the redemption right present in the warrants
issued in connection with promissory notes, the warrants are accounted for as a liability in accordance with ASC 480 and ASC 815, with
the changes in fair value of the warrants recognize in the statement of operations.

 The Company valued the warrants using the trading
prices of the Public Warrants, which mirror the terms of the note payable warrants. The Company also estimated the fair value of the redemption
put using a present value calculation for the time from the Closing Date of the MIPA through the 18-month redemption date and an estimated
discount rate of 15 %. The initial fair value of the warrant liabilities for warrants issued during was $ 409,334 and $ 4,506,312 for the
years ended December 31, 2024 and 2023, respectively and was recognized as debt discount. The estimated fair value of the warrants and
redemption put was $ 5,681,849 and $ 4,777,971 as of December 31, 2024 and 2023, respectively, and the Company recognized a change in fair
value of the warrant liability of a loss of $ 804,004 for the year ended December 31, 2024 and a gain of $ 187,704 during the period from
November 15, 2023 to December 31, 2023. The warrant liability estimated fair value is considered a level 3 fair value measurement.

 Nonrecurring Basis

 The carrying value of
the Company's financial instruments, consisting of cash, accounts receivable, accounts payable and accrued expenses, approximates
their fair value due to the short maturity of such instruments. Financial instruments also consist of debt for which fair value approximates
carrying values as the debt bears interest at fixed or variable rates which are reflective of current rates otherwise available to the
Company. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

 F- 33

 NOTE 9 — RELATED PARTY TRANSACTIONS

 On May 5, 2022, the Company entered into a Referral
Fee and Consulting Agreement (the "Consulting Agreement") with Alexandria VMA Capital, LLC ("Alexandria"), an
entity controlled by Mr. Caravaggio, who became the Company's CEO on December 17, 2023. Pursuant to the Consulting Agreement, Alexandria
provided information and contacts with suitable investments and acquisition candidates for the Company's initial business combination.
In addition, Alexandria provided due diligence, purchasing and negotiating strategy advice, organizational and operational advice, and
such other services as requested by the Company. In consideration of the services provided by Alexandria, the Company paid to Alexandria
Capital a referral fee of $ 1,800,000 equal to 2 % of the total value of the Company's business combination, with half being paid
by the issuance of 89,000 shares of the Company's Class A Common Stock. No gain was recognized on the issuance of these shares for
the difference in the fair value of the shares and the $ 900,000 payable due to the related party nature of the transaction. The remaining
$ 900,000 was reflected as accounts payable. As of December 31, 2024 and 2023, the Company owes $ 403,000 and $ 762,000 of the fee, respectively.

 On January 20, 2023, January 27, 2023, and February
14, 2023, Mr. Caravaggio entered into Private Notes Payable with the Company. Pursuant to the Private Notes Payable, Mr. Caravaggio paid
an aggregate amount of $ 179,000 and received promissory notes in the aggregate principal amount of $ 179,000, accruing interest at a rate
of 15 % per annum, and common stock warrants to purchase an aggregate of 179,000 shares of Class A Common Stock of the Company at an exercise
price of $ 11.50 per share. The warrants issued to Mr. Caravaggio are identical to the Public Warrants that are publicly traded on the
NYSE American under the symbol "EONR.WS" in all material respects, except that the warrants were not transferable, assignable
or salable until 30 days after the Company's initial business combination. The warrants are exercisable on the same basis as the
Public Warrants.

 On November 13, 2023, pursuant to an Exchange
Agreement, the Company agreed with Dante Caravaggio to exchange, in consideration of the surrender and forgiveness of an aggregate amount
(including principal and interest accrued thereon) of $ 100,198 due under the Private Notes Payable, for 20,040 shares of Class A Common
Stock at a price per share equal to $ 5.00 per share. The Company recognized a loss extinguishment of $ 101,204 in connection with this
transaction.

 Pursuant to the Founder Pledge Agreement, upon
the Closing, the Company issued 30,000 shares of Class A Common Stock to Dante Caravaggio, LLC, an entity controlled by Mr. Caravaggio
with a fair value of $ 203,100.

 On February 14, 2023, the Company entered into
a consulting agreement with Donald Orr, the Company's former President, which became effective upon the closing of the MIPA for
a term of three years. Under the agreement, the Company will pay Mr. Orr an initial cash amount of $ 25,000, an initial award of 60,000
shares of common stock, a monthly payment of $ 8,000 for the first year of the agreement and $ 12,000 per month for the remaining two years,
and two grants, each consisting of restricted stock units ("RSUs") calculated by dividing $ 150,000 by the stock price on the
one year and two year anniversary of the initial Business Combination. Each of the RSU awards will vest upon the one year and two-year
anniversary of the grants. In the event of termination of Mr. Orr without cause, Mr. Orr will be entitled to 12 months of the monthly
payment in effect at that time, and the RSU awards issued to Mr. Orr shall fully vest. The 60,000 RSU's were approved by the Board
and issued in March of 2024.

 On February 15, 2023, the Company entered into
a consulting agreement with Rh ne Merchant House, Ltd. ("RMH Ltd"), a company controlled by the Company's former
Chairman and CEO Donald H. Goree, which became effective upon the closing of the MIPA for a term of three years. Under the agreement,
the Company paid RMH Ltd an initial cash amount of $ 50,000, an initial award of 60,000 shares of common stock, a monthly payment
of $ 22,000, and two grants, each consisting of RSUs calculated by dividing $ 250,000 by the stock price on the one year and two-year anniversary
of the initial Business Combination. Each of the RSU awards will vest upon the one year and two-year anniversary of the grants. In the
event of termination of RMH Ltd. without cause, RMH Ltd. would be entitled to $ 264,000, and the RSU awards issued to RMH Ltd. would fully
vest.

 Effective May 6, 2024, the Company and RMH Ltd.
entered into a settlement and mutual release agreement pursuant to which the Company paid $ 100,000 in cash, with $ 50,000 paid
on or before execution and the remaining $ 50,000 by July 24, 2024. The Company also agreed to issue 150,000 shares of Class
A Common Stock subject to a contractual lockup as final consideration under the Consulting Agreement, which was deemed terminated effective
May 6, 2024. RMH Ltd's 60,000 RSU's were forfeited as part of the agreement. The Company recognized $ 360,000 of stock-based
compensation expense related to the Class A Common Shares.

 F- 34

 NOTE 10 — COMMITMENTS AND CONTINGENCIES

 Registration Rights Agreement (Founder Shares)

 The holders of the Founder Shares and the Private
Placement Units and warrants that may be issued upon conversion of Private Notes Payable (and any shares of common stock issuable
upon the exercise of the Private Placement Units or warrants issued upon conversion of the working capital loans) will be entitled
to registration rights pursuant to a registration rights agreement to be signed on or before the date of the prospectus for the Initial
Public Offering. The holders of these securities are entitled to make up to three demands in the case of the founder shares, excluding
short form registration demands, and one demand in the case of the private placement warrants, the working capital loan warrants and,
in each case, the underlying shares that the Company register such securities for sale under the Securities Act. In addition, these holders
will have "piggy-back" registration rights to include their securities in other registration statements filed by the Company.
In the case of the private placement warrants, representative shares issued to EF Hutton, the demand registration rights provided will
not be exercisable for longer than five years from the effective date of the registration statement in compliance with FINRA Rule 5110(f)(2)(G)(iv) and
the piggyback registration right provided will not be exercisable for longer than seven years from the effective date of the registration
statement in compliance with FINRA Rule 5110(f)(2)(G)(v). The Company will bear the expenses incurred in connection with the filing
of any such registration statements.

 Contingencies

 The Company is a party to various legal actions
arising in the ordinary course of its businesses. In accordance with ASC 450, Contingencies, the Company accrues reserves for outstanding
lawsuits, claims and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount
of loss contingencies using current available information from legal proceedings, advice from legal counsel and available insurance coverage.
Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued
or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. Thus,
the Company's exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued.

 Environmental

 From time to time, and in the ordinary course
of business, the Company may be subject to certain environmental liabilities. Environmental expenditures that relate to an existing condition
caused by past operations and have no future economic benefits are expensed. Environmental expenditures that extend the life of the related
property or mitigate or prevent future environmental contamination are capitalized. Liabilities for expenditures that will not qualify
for capitalization are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated.
Such liabilities are undiscounted unless the timing of cash payments for the liability is fixed or reliably determinable. Environmental
liabilities normally involve estimates that are subject to revision until settlement or remediation occurs.

 As of December 31, 2024 and 2023, the Company
has an environmental remediation liability of $ 675,000 recognized on its consolidated balance sheet relating to an oil spill at one of
the Predecessor's producing sites in fiscal year 2017 which is recorded in other liabilities in the consolidated balance sheets.
The producing site was subsequently sold in 2019 and the Predecessor indemnified the purchaser for the remediation costs. Management based
the remediation liability on the undiscounted cost received from third- party quotes to remediate the spill. As of December 31, 2024,
the Company does not believe it is likely remediation will be required in the next five years.

 F- 35

 NOTE 11 — INCOME TAXES

 As of December 31, 2024 and 2023, the Company's
net deferred tax assets were as follows:

 2024

 2023

 Deferred tax assets

 Federal net operating loss

 $
 1,913,959

 $
 454,225

 Transaction costs

 1,515,401

 1,441,904

 Other debt costs

 -

 885,890

 Accrued expenses

 1,202,259

 -

 Deferred compensation

 446,113

 -

 Derivative liability

 228,732

 -

 Stock-based compensation

 648,697

 268,405

 Other

 45,322

 3,611

 Total deferred tax assets

 6,000,483

 3,054,035

 Deferred tax liabilities

 Oil and natural gas properties

 ( 8,665,914
)

 ( 9,097,162
)

 Unrealized gain on derivatives

 ( 27,302
)

 ( 120,013
)

 Total deferred tax assets

 ( 8,693,216
)

 ( 9,217,175
)

 Net deferred tax liabilities

 ( 2,692,733
)

 ( 6,163,140
)

 Valuation allowance for deferred tax assets

 -

 -

 Net Deferred tax liability, net of allowance

 $
 ( 2,692,733
)

 $
 ( 6,163,140
)

 The income tax provision consists of the following:

 period from

 2024

 2023

 Current income tax (benefit) expense

 Federal

 $
 -

 $
 ( 22,007
)

 State

 -

 -

 Total current income tax benefit

 -

 ( 22,007
)

 Deferred tax (benefit) expense:

 Federal

 ( 2,840,051
)

 ( 1,467,862
)

 State

 ( 630,356
)

 ( 325,795
)

 Valuation allowance

 -

 ( 571,975
)

 Total deferred income tax (benefit) expense

 ( 3,470,407
)

 ( 2,365,632
)

 Total income tax (benefit) expense

 $
 ( 3,470,407
)

 $
 ( 2,387,639
)

 As of December 31, 2024, the Company had $ 7,458,627 of
estimated U.S. federal net operating loss carryovers, which do not expire, and no state net operating loss carryovers available to offset
future taxable income.

 In assessing the realization of the deferred tax
assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which
temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of
the information available, management believes that significant uncertainty exists with respect to future realization of the deferred
tax assets and has therefore established a full valuation allowance.

 Under the Tax Cuts and Jobs Act, net operating
losses incurred after December 31, 2017 can only offset 80 % of taxable income. However, these net operating losses may be carried forward
indefinitely instead of limited to twenty years under previous tax law. Carryback of these losses is no longer permitted. The CARES Act
temporarily removed the 80 % of taxable income limitation to allow NOL carryforwards to fully offset income. For tax years beginning after
2021, the Company can take: (1) a 100 % deduction of NOLs arising in tax years prior to 2018, and (2) a deduction limited to 80 % of modified
taxable income for NOLs arising in tax years after 2017.

 F- 36

 A reconciliation of the federal income tax rate
to the Company's effective tax rate is as follows:

 period from

 period from

 November 15, 2023 to December 31, 2023

 November 15, 2023 to December 31, 2023

 Statutory federal income tax rate

 21.00
 %

 21.00
 %

 State Taxes (Net of Federal Benefit)

 5.02
 %

 2.86
 %

 Permanent Differences

 ( 1.60
)%

 ( 8.11
)%

 Exchange of Class B units for Class A common stock

 3.24
 %

 -
 %

 Change in valuation allowance

 -
 %

 5.02
 %

 Other

 ( 0.01
)%

 0.19
 %

 Income tax provision

 27.65
 %

 20. 97
 %

 The effective income tax rate differs from the
U.S. statutory rate of 21 percent primarily due to permanent differences between GAAP income and taxable income. Periods prior to November
15, 2023 are not shown because the Predecessors were treated as partnerships for U.S. federal income tax purposes and therefore do not
record a provision for U.S. federal income tax because the partners of the Predecessors report their share of the Predecessors'
income or loss on their respective income tax returns. The Predecessors are required to file tax returns on Form 1065 with the IRS. The
2021 through 2024 tax years remain open to examination.

 The Company files income tax returns in the U.S.
federal jurisdiction, Texas and New Mexico, and is subject to examination by the various taxing authorities. The Company's tax returns
since inception remain open to examination by the taxing authorities. Significant differences may exist between the results of operations
reported in these consolidated financial statements and those determined for income tax purposes primarily due to the use of different
asset valuation methods for tax purposes.

 NOTE 12 — SUBSEQUENT EVENTS

 The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the consolidated financial statements were issued.

 On January 10, 2025, the Company issued a total
of 60,500 Class A common shares to a consultant pursuant to the terms of the consulting agreement described in Note 8, including 43,800
owed as of December 31, 2024.

 On January 13, 2025, the Company entered into
a settlement agreement with its former President, Donald Orr, whereby the Company agreed to pay Mr Orr. $ 75,000 in cash and issue 200,000
class A common shares for the termination of his prior consulting agreement.

 On January 14, 2025, the Company entered into
an agreement with a consultant whereby the Company agreed to issue the consultant 45,050 Class A common shares for the settlement of $ 45,050
in outstanding services.

 On February 10, 2025, the Company entered into
a Purchase, Sale, Termination and Exchange Agreement (the "Agreement"), by and among the Company, OpCo, SPAC Subsidiary, HNRA
Royalties, EON Royalty, CIC, DenCo, EON Management, and 4400. The closing of the transactions contemplated by the Agreement (the "Closing")
is subject to the satisfaction of various conditions, including the Company obtaining financing.

 F- 37

 Pursuant to the Agreement, the Company agreed
to purchase the ORRI from EON Royalty for $ 14,000,000, payable in cash at the Closing. In addition, at the Closing, EON Royalty agreed
to waive all outstanding interest accrued under the Seller Note, reduce the outstanding principal amount of the Seller Note to $ 8,000,000
and settle and discharge the Seller Note in exchange for the payment of $ 8,000,000 in cash. EON Royalty further agreed to assign and transfer
the OpCo Preferred Units to OpCo in exchange for the issuance by the Company of 3,000,000 shares of Class A Common Stock at
the Closing. On February 11, 2025, EON Royalty Exchanged the remaining 500,000 OpCo Class B Units for 500,000 shares of Class A Common
Stock. As a result, there are no remaining Class B Common shares outstanding as of this filing.

 As consideration for entering into the Agreement,
the Company agreed to release the Escrow Shares to EON Royalty and to promptly process any exchange notice delivered by EON Royalty to
exchange the Escrow Share for shares of Class A Common Stock, and EON Royalty agreed to deliver such exchange notice within two days of
the date of the Agreement. The Agreement contains customary representations, warranties, indemnification provisions closing conditions,
and covenants.

 The Closing is contingent upon the occurrence
of certain conditions, including (i) the availability of financing to the Company, (ii) the receipt by EON Royalty of a consent of First
International Bank & Trust to the Agreement and a written termination agreement, executed by the Company and First International Bank
& Trust, terminating that certain Subordination Agreement, dated as of November 15, 2023, by and among First International Bank &
Trust, the Company and EON Royalty, (iii) the receipt by the Company of any required stockholder consents, (iv) the respective representations
and warranties of the parties being true and correct, subject to certain materiality exceptions and (v) the performance by the parties
in all material respects of their respective obligations under the Agreement.

 The Agreement may be terminated at any time by
mutual consent of the parties thereto or by any one party if the counterparty is in material breach of the Agreement. If the Closing does
not occur prior to 1:00 p.m. Central Time on June 3, 2025, the Agreement will automatically terminate.

 Subsequent to December 31, 2024, the Company and
16 of the Investors (the "Exchange Investors") entered into exchange agreements (the "Exchange Agreements") whereby
the Exchange Investors exchanged their Old Notes and Old Warrants for convertible promissory notes (the "Convertible Notes").
The principal amounts of the Convertible Notes were determined by adding the original principal amount of the Old Notes and the number
of Old Warrants. In connection with the Exchange Agreements, the Company issued Convertible Notes in the aggregate principal amount of
$ 1,566,500 in exchange for Old Notes in the aggregate principal amount of $ 682,500 and 1,634,000 Old Warrants.

 The Convertible Notes mature on January 31, 2028
and accrue interest at a rate of 7.5 % per annum. The Convertible Notes may be prepaid by the Company at any time, in whole or in part,
without any premium or penalty. The Convertible Notes may be converted by the holders at any time after issuance into shares of Class
A Common Stock at a conversion price equal to the greater of (a) $ 0.25 per share or (b) 90 % multiplied by the average of the three lowest
VWAPs of the Class A Common Stock over the ten trading days prior to conversion (the "Conversion Price"). If, at any time
the Convertible Notes are outstanding, the Company issues or sells Class A Common Stock for no consideration or at a price lower than
the then-current Conversion Price, then the Conversion Price of the Convertible Notes will be automatically reduced to the amount of consideration
per share received by the Company in such sale or offering. In addition, so long as any Convertible Notes are outstanding, if the Company
issues any security on terms more favorable than the Convertible Notes, then the Company must notify the holder and such more favorable
term shall become a part of the Convertible Note, at the holder's option

 Subsequent to year end, the Company issued 1,954,514
shares of class A common stock for the conversion of $ 1,368,000 in convertible notes principal and $ 10,888 of accrued interest pursuant
to the terms of the convertible notes.

 Subsequent to December 31, 2024, the Company issued
 4,770,000 shares under the Common Stock Purchase Agreement in exchange for cash proceeds of $ 4,364,572.

 Subsequent to year end, an additional 9,357 shares
were issued to an employee related to vesting of RSU awards,

 F- 38

 NOTE 13 — SUPPLEMENTAL DISCLOSURE
OF OIL AND NATURAL GAS OPERATIONS (UNAUDITED)

 The Company has only
 one reportable operating segment, which is oil and natural gas development, exploration, and production in the United States. See
the Company's accompanying consolidated statements of operations for information about results of operations for oil and gas producing
activities.

 Capitalized Costs
Related to Crude Oil and Natural Gas Producing Activities

 Aggregate capitalized
costs related to crude oil and natural gas exploration and production activities with applicable accumulated depreciation, depletion,
and amortization are presented below as of the dates indicated:

 As of December 31,

 2024

 2023

 Oil and natural gas properties

 Proved

 $
 100,285,138

 $
 94,189,372

 Less: accumulated depreciation, depletion, and amortization

 ( 2,759,226
)

 ( 352,127
)

 Net oil and natural gas properties capitalized costs

 $
 97,525,912

 $
 93,837,245

 Costs Incurred for Oil and Natural Gas
Producing Activities

 Costs incurred in crude oil and natural gas
exploration and development for the periods presented:

 For the Year Ended December 31,
 2024

 November 15, 2023 to
 2023

 November 14,
 2023

 Exploration costs

 $
 -

 $
 -

 $
 -

 Development costs

 6,095,765

 238,499

 6,769,557

 Total

 $
 6,095,765

 $
 238,499

 $
 6,769,557

 Reserve Quantity Information

 The following information
represents estimates of the Company's proved reserves as of December 31, 2024 and 2023, which have been prepared by an independent
third party and they are presented in accordance with SEC rules. These rules require SEC reporting companies to prepare their reserve
estimates using specified reserve definitions and pricing based on a 12-month unweighted average of the first-day-of-the-month pricing.
The pricing that was used for estimates of the Company's reserves as of December 31, 2024 and 2023 was based on an unweighted
average 12-month average U.S. Energy Information Administration WTI posted price per Bbl for oil and Henry Hub prices for natural
gas price per Mcf for natural gas, adjusted for transportation, quality and basis differentials.

 Subject to limited exceptions,
proved undeveloped reserves may only be booked if they relate to wells scheduled to be drilled within five years of the date of booking.
This requirement has limited and may continue to limit, the Company's potential to record additional proved undeveloped reserves
as it pursues its drilling program. Moreover, the Company may be required to write down its proved undeveloped reserves if it does not
drill on those reserves within the required five-year timeframe. The Company does not have any proved undeveloped reserves which have
remained undeveloped for five years or more. The Company's proved oil and natural gas reserves are located in the United States
in the Permian Basin of southeast New Mexico. Proved reserves were estimated in accordance with the guidelines established by the SEC
and the FASB. Oil and natural gas reserve quantity estimates are subject to numerous uncertainties inherent in the estimation of
quantities of proved reserves and in the projection of future rates of production and the timing of development expenditures. The accuracy
of such estimates is a function of the quality of available data and of engineering and geological interpretation and judgment. Results
of subsequent drilling, testing and production may cause either upward or downward revision of previous estimates. Further, the volumes
considered to be commercially recoverable fluctuate with changes in prices and operating costs. The Company emphasizes that reserve estimates
are inherently imprecise and that estimates of new discoveries are more imprecise than those of currently producing oil and natural gas
properties. Accordingly, these estimates are expected to change as additional information becomes available in the future.

 F- 39

 The following table and
subsequent narrative disclosure provides a roll forward of the total proved reserves for the years ended December 31, 2024 and
2024 as well as proved developed and proved undeveloped reserves at the beginning and end of each respective year:

 For the years ended December 31,

 2024

 2023

 Oil
 (MBbls)

 Natural
 Gas
 (MMcf)

 Total
 (MBoe)

 Oil
 (MBbls)

 Natural
 Gas
 (MMcf)

 Total
 (MBoe)

 Proved Reserves:

 Beginning of period

 15,414

 3,525

 16,001

 17,577

 4,572

 18,339

 Extensions and discoveries

 -

 -

 -

 1,817

 1,900

 Dispositions

 -

 -

 -

 ( 1,758
)

 ( 457
)

 ( 1,834
)

 Revisions to previous estimates

 ( 1,140
)

 ( 471
)

 ( 1,219
)

 ( 1,758
)

 ( 729
)

 ( 1,995
)

 Production

 ( 256
)

 ( 213
)

 ( 291
)

 ( 349
)

 ( 356
)

 ( 409
)

 End of period

 14,018

 2,840

 14,492

 15,414

 3,525

 16,001

 Proved Developed Reserves:

 Beginning of period

 11,277

 2,674

 11,723

 13,014

 3,572

 13,609

 End of period

 9,803

 2,056

 10,145

 11,277

 2,674

 11,723

 Proved Undeveloped Reserves:

 Beginning of period

 4,137

 4,279

 4,564

 1,000

 4,730

 End of period

 4,215

 4,346

 4,137

 4,279

 Extensions and discoveries. For
the year ended December 31, 2024 and 2023, extensions and discoveries contributed to the increase of 0 MBoe and 1,900 MBoe, respectively,
in the Company's proved reserves. The increase of extensions and discoveries in 2024 and 2023 is due to the Company's development
of the Seven Rivers waterflood.

 Dispositions: For
the year ended December 31, 2023, dispositions represent the removal of reserves attributed to the sale of an undivided royalty interest
equal in amount to ten percent ( 10 %) by the Predecessor to EON Royalty of the Predecessor's all oil, gas and minerals in, under
and produced from each lease.

 Revisions of previous
estimates. For the year ended December 31, 2024, revisions of previous estimates resulted in the decrease of reserves with
a negative revision of 1,219 MBoe in the Company's proved reserves. For the year ended December 31, 2023, revisions of previous
estimates resulted in the decrease of reserves with a negative revision of 1,995 MBoe in the Company's proved reserves. The negative
revisions in 2024 and 2023 is primarily attributable to the decrease in year-end SEC commodity prices for oil and natural gas.

 Standardized Measure
of Discounted Future Net Cash Flows

 The standardized measure
of discounted future net cash flows does not purport to be, nor should it be interpreted to present, the fair value of the oil and natural
gas reserves of a property. An estimate of fair value would take into account, among other things, the recovery of reserves not presently
classified as proved, the value of unproved properties and consideration of expected future economic and operating conditions.

 F- 40

 The estimates of future
cash flows and future production and development costs as of December 31, 2023 and 2022 are based on the unweighted arithmetic average
first-day-of-the-month price for the preceding 12-month period. Estimated future production of proved reserves and estimated future production
and development costs of proved reserves are based on current costs and economic conditions. All wellhead prices are held flat over the
forecast period for all reserve categories. The estimated future net cash flows are then discounted at a rate of 10 %.

 The standardized measure
of discounted future net cash flows relating to proved oil and natural gas reserves is as follows:

 For the year ended

 2024

 2023

 (in thousands)

 Future cash inflows

 $
 1,086,436

 $
 1,216,840

 Future production costs

 ( 453,384
)

 ( 438,653
)

 Future development costs

 ( 94,156
)

 ( 94,156
)

 Future net cash flows

 538,896

 684,031

 10 % annual discount for estimated timing of cash flows

 ( 331,634
)

 ( 403,413
)

 Standardized measure of discounted future net cash flows

 $
 207,262

 $
 280,618

 In the foregoing determination
of future cash inflows, sales prices used for oil and natural gas for December 31, 2024 and 2023 were estimated using the average
price during the 12-month period, determined as the unweighted arithmetic average of the first-day-of-the-month price for each month.
Prices were adjusted by lease for quality, transportation fees and regional price differentials. Future costs of developing and producing
the proved gas and oil reserves reported at the end of each year shown were based on costs determined at each such year-end, assuming
the continuation of existing economic conditions. Furthermore, future development costs include abandonment costs.

 It is not intended that
the FASB's standardized measure of discounted future net cash flows represent the fair market value of the Company's proved
reserves. The Company cautions that the disclosures shown are based on estimates of proved reserve quantities and future production schedules
which are inherently imprecise and subject to revision and the 10 % discount rate is arbitrary. In addition, costs and prices as of the
measurement date are used in the determinations and no value may be assigned to probable or possible reserves.

 Changes in the standardized
measure of discounted future net cash flows relating to proved oil and natural gas reserves are as follows:

 For the year ended

 2024

 2023

 (in thousands)

 Balance, beginning of period (Successor for 2024, Predecessor for 2023)

 $
 280,618

 $
 519,547

 Net change in sales and transfer prices and in production (lifting) costs related to future production

 ( 32,505
)

 ( 95,981
)

 Sales and transfers of oil and natural gas produced during the period

 ( 9,504
)

 ( 22,914
)

 Changes in estimated future development costs

 1,550

 ( 2,313
)

 Previously estimated development incurred during the period

 5,628

 7,008

 Net purchases (divestitures) of reserves in place

 -

 ( 138,893
)

 Net change due to revisions in quantity estimates

 ( 20,516
)

 ( 45,534
)

 Net change due to extensions and discoveries, and improved recovery

 —

 —

 Accretion of discount

 28,062

 51,955

 Timing and other differences

 ( 46,070
)

 ( 446
)

 Standardized measure of discounted future net cash flows (Successor for 2024, Predecessor for 2023)

 $
 207,262

 $
 280,618

 F- 41

 NOTE 14 — RESTATEMENT OF PREVIOUSLY
ISSUED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 In connection with the preparation of the Company's
Consolidated Financial Statements as of and for the fiscal year ended December 31, 2024, the Company discovered that as of and for the
three and nine months ended September 30, 2024 it had not appropriately accounted for the fair value of its forward purchase agreement.
The error resulted in an overstatement of the loss on change in fair value of its forward purchase agreement of $ 5,190,631 for the
three and nine months ended September 30, 2024 and an overstatement of the forward purchase agreement liability by this amount as of September
30, 2024. There was no deferred tax impact of the error.

 The misstatements were material to the previously
issued condensed consolidated financial statements of the Company and as a result, the Company has restated its condensed consolidated
balance sheet, condensed consolidated statements of operations, condensed consolidated statements of changes in stockholder's equity,
and condensed consolidated statements of cash flows as of and for the three and nine months ended September 30, 2024 presented herein.
The restatement includes adjustments to forward purchase agreement liability, change in fair value of forward purchase agreement, accumulated
deficit, net loss before income taxes, net loss, net loss attributable to EON Resources, Inc., and net loss per share.

 The impact of the correction of the error is summarized
below:

 Condensed Consolidated Statement of Operations

 Three Months Ended September 30, 2024 (Successor)

 As Reported

 Adjustment

 As Restated

 Change in fair value of FPA liability

 $
 ( 4,209,294
)

 $

 $
 981,337

 Total Other Income (expense)

 ( 6,681,902
)

 ( 1,491,271
)

 Loss before income taxes

 ( 4,697,096
)

 493,535

 ( 3,841,171
)

 1,349,460

 Net income (loss) attributable to EON Resources, Inc.

 ( 3,841,171
)

 1,349,460

 Net income (loss) per share of common stock – basic and diluted

 $
 ( 0.67
)

 $
 0.91

 $
 0.24

 Condensed Consolidated Statement of Operations

 Nine Months Ended September 30, 2024 (Successor)

 As Reported

 Adjustment

 As Restated

 Change in fair value of FPA liability

 $
 ( 4,534,766
)

 $

 $
 655,865

 Total Other Income (expense)

 ( 10,969,550
)

 ( 5,778,919
)

 Loss before income taxes

 ( 11,577,447
)

 ( 6,386,816
)

 ( 9,172,468
)

 ( 3,981,837
)

 Net income (loss) attributable to EON Resources, Inc.

 ( 9,172,468
)

 ( 3,981,837
)

 Net income (loss) per share of common stock – basic and diluted

 $
 ( 1.67
)

 $
 0.95

 $
 ( 0.73
)

 Condensed Consolidated Balance Sheet

 As of September 30, 2024 (Successor)

 As Reported

 Adjustment

 As Restated

 Forward purchase agreement liability

 $
 5,628,863

 $

 $
 438,232

 Total current liabilities

 44,782,226

 39,591,595

 Total liabilities

 79,043,688

 73,853,057

 Accumulated deficit

 ( 28,291,213
)

 ( 23,100,582
)

 Total stockholders' deficit attributable to EON Resources, Inc.

 ( 6,425,818
)

 ( 1,235,187
)

 Total stockholders' equity

 24,134,996

 29,325,627

 Total liabilities and stockholders' equity

 $
 103,178,684

 $

 $
 108,369,315

 Condensed Consolidated Statement of Cash Flows

 Nine Months Ended September 30, 2024 (Successor)

 As Reported

 Adjustment

 As Restated

 $
 ( 9,172,468
)

 $

 $
 ( 3,981,837
)

 Change in fair value of FPA liability

 ( 4,534,766
)

 655,865

 Net cash provided by operating activities

 $
 3,346,362

 $
 -

 $
 3,346,362

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