EON Resources subsidiary LH Operating LLC has started drilling the first of 92 planned horizontal wells in the Grayburg-Jackson Field in Eddy County, New Mexico. The program follows a farmout deal with Virtus Energy Partners and builds on vertical well tests that beat the company's expectations.
EON Resources Inc announced that the first of three carried horizontal wells was spudded on August 24, kicking off a 92-well horizontal drilling program in the Grayburg-Jackson Field. According to Rigzone, EON CEO Dante Caravaggio said the three wells "makes all the difference in the world to us."
Farmout deal sets up the program
EON's subsidiary, LH Operating LLC, entered a farmout agreement with Virtus Energy Partners LLC on September 9, 2025 to develop the San Andres interval through new horizontal wells. Virtus acquired the right to develop as many as 90 horizontal drilling locations across the field and will operate the program.
The Grayburg-Jackson Field spans roughly 13,700 contiguous acres with mapped original oil-in-place of nearly one billion barrels, according to a company deck. Recompletions of three vertical wells between May and July tested and refined the horizontal drilling intervals, producing initial output of 140 barrels of oil per day, results EON said were better than expected.
Drilling timeline and financial split
Each horizontal well takes about 10 days to reach objective depth and roughly 60 days to complete, including fracing and surface facility installation. EON expects proceeds from oil sales to begin in October, with production and revenue arriving in October or November because of the two-month drill-to-completion window.
An additional 12 horizontal wells are due to start in December 2026, followed by 10 to 20 wells a year in 2027 and beyond until the program is complete. LHO retains a 35% non-operated working interest in the horizontal wells and keeps its full working interest in the field's other formations, including its Seven Rivers waterflood operations.
Gross crude oil production from the program is expected to reach and exceed 20,000 barrels of oil per day, with 7,000 barrels per day attributable to LHO's working interest. EON said the carried wells' net contribution equates to $1 million in net free cash flow per month once online.
Source: Rigzone
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