In a statement posted on its website this week, EON Resources Inc announced that a 92 horizontal well drilling program had commenced in the Grayburg-Jackson Field (GJF), which is located in Eddy County, New Mexico.
“The first three of 92 horizontal wells now being drilled makes all the difference in the world to us,” EON CEO Dante Caravaggio said in the statement.
“These three wells will make our operations profitable, completely changing our financials – and it’s happening right now,” he added.
“Our confidence is high because of the successful vertical well recompletions and tests just completed in June and July which created our best wells in the Grayburg-Jackson Field – and we plan to drill 89 more wells,” he continued.
EON highlighted in its statement that, on September 9, 2025, the company’s subsidiary, LH Operating LLC (LHO), entered into a Joint Development Agreement, or farmout, to develop the San Andres interval in GJF through new horizontal wells to be drilled and completed.
In a statement posted on its website on September 11 announcing the farmout, EON Resources said it was entering into a farmout deal with a subsidiary of Virtus Energy Partners LLC. Under the farmout, Virtus acquired the right to develop the company’s San Andres formation within the GJF “where it believes as many as 90 horizontal drilling locations are prospective”, EON noted in that statement, adding that Virtus would be the designated operator and lead the development efforts.
In a GJF horizontal drilling program deck published by EON back in October last year, EON noted that the GJF is part of the expansive Artesia-Vacuum Trend that consists of multiple stacked conventional plays dominated by carbonate reservoirs.
The deck outlines that the property is a “large, contiguous leasehold consisting of ~13,700 acres” and points out that it has Mapped Original Oil-In-Place (OOIP) of “nearly one billion barrels”.
Noting the current status and highlights of the development program in its latest statement, EON said recompletions of three vertical wells in the San Andres interval were performed in May to July. These wells were used to test and refine horizontal well drilling intervals, according to the statement, which said the results “were far better than expected with initial production of 140 barrels of oil per day from the recompleted wells”.
LHO is being carried under the farmout for the drilling of the first three horizontal wells, the statement pointed out, adding that no bank loan, no bank financing fees, no stock sales, and no incremental G&A’s have been incurred for carried wells. The statement did note, however, that a “modest” operating cost is expected to pump the carried wells, without specifying a figure.
EON highlighted in its statement that the spudding, or the official start of the drilling process, of the first carried well started on August 24. It revealed that the drilling of each horizontal well will take approximately 10 days to reach the objective depth.
“Once spudding occurs, a horizontal well requires approximately 60 days to complete, including drilling, the fracing process, installation of surface facilities, and testing,” EON pointed out.
“Proceeds from oil sales from these horizontal wells are expected to start being received beginning in October,” it added.
“The drilling of an additional 12 horizontal wells is expected to start in December of 2026. An additional 10 to 20 wells are expected to be drilled in 2027 and each year thereafter until the development program is completed,” it continued.
EON highlighted in the statement that the farmout provides that horizontal wells drilled after the carried wells will see EON pay a 35 percent working interest share, estimated to be $1.2 million per well, to participate as a consenting party. The company plans to primarily debt finance these development costs of its subsidiary, according to the statement.
Under the farmout, LHO retains a 35 percent non-operated working interest in horizontal wells in the development program as to the San Andres interval, the statement noted. LHO retained its 100 percent working interest in the remaining formations throughout the GJF, which includes its waterflood operations principally in the Seven Rivers formation, it added.
Gross oil production is expected to reach and exceed 20,000 barrels of oil per day during the development program with 35 percent, or 7,000 barrels of oil per day, attributable to LHO’s working interest, the statement said. The net barrel of oil per day contribution to EON by LHO from the carried wells is expected to be 500 barrels of oil per day, which the statement said equates to $1 million in net free cash flow per month.
“Due to the two months required to drill, complete and bring these wells online, oil production and revenues from sales will not materialize until October or November,” EON revealed in the statement.
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