A subsidiary of Frisco-based Virtus Energy Partners said recently it reached a farmout agreement with EON Resources to develop EON’s assets in Grayburg Jackson Field in San Andres. EON said as many as 90 horizontal drilling locations are expected to be drilled in the field. Virtus will lead the development as operator.
EON has 20,000 leasehold acres in Permian Basin with a total of 750 producing and injection wells producing more than 1,000 barrels of oil per day.
Virtus created value in the stateline area of Texas and New Mexico – growing from zero to more than 30,000 gross operated boed from about 200 horizontal wells in San Andres. Virtus paid $5 million to EON for the acquisition of a 65 percent working interest of the leasehold rights in San Andres. The annual drilling program is expected to range from 10 to 20 new horizontal wells with initial production rates of 300 to 500 b/d of oil.
Lance Tayor, CEO of Virtus, said Sept. 11, “The subsurface characteristics are very similar to – and in many ways better than – our incredibly successful horizontal San Andres efforts along the Texas and New Mexico state line.” Dante Caravaggio, president and CEO of EON, added, “We expect that once 10 horizontal wells are drilled and producing that the future drilling capex becomes self-sustaining.”
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