EON enters into farm-out of San Andres horizontal drilling program

EON Resources entered into a farm-out agreement with a subsidiary of Virtus Energy to develop the company’s San Andres formation within the Grayburg Jackson Field (GJF), where it believes as many as 90 horizontal drilling locations are prospective. Virtus will be the designated operator and lead the development efforts.

The annual drilling program is expected to range from 10 to 20 new horizontal wells per year with initial production rates of 300 to 500 barrels of oil per day (bopd). The first three wells are anticipated to be completed by mid-year 2026.

The GJF is primarily a waterflood property located on the Northwest Shelf of the Permian Basin in Eddy County, New Mexico. It comprises 13,700 contiguous leasehold acres with 342 producing wells, 207 injection wells and one water source well for a total of 550 wells. Leasehold rights include the Seven Rivers, Queen, Grayburg and San Andres intervals that range from as shallow as 1,500 ft to 4,000 ft in depth.