EON Kicks Off 92-Well Horizontal Drilling Program in New Mexico
Drilling has begun on a 92-well horizontal drilling program in Eddy County, New Mexico, with the first well spudded August 24, Rigzone reports.
EON Resources Inc, through subsidiary LH Operating LLC, is developing the San Andres interval in the Grayburg-Jackson Field under a farmout agreement signed September 9, 2025, with a subsidiary of Virtus Energy Partners LLC. Virtus will operate and lead development of what EON has identified as up to 90 prospective horizontal drilling locations.
Market Impact
EON CEO Dante Caravaggio said the first three wells “will make our operations profitable, completely changing our financials, and it’s happening right now.” Confidence in the program comes from vertical well recompletions and tests completed in May through July, which produced initial rates of 140 barrels of oil per day, described by the company as its best wells in the field.
Each horizontal well takes roughly 10 days of drilling to reach objective depth, with a full cycle of drilling, fracing, surface facility installation and testing running about 60 days per well, according to EON’s statement. LHO is carried for the first three wells at no cost to EON, meaning no bank financing or stock sales were required for that initial phase. After the carried wells, EON will pay a 35% working interest share, estimated at $1.2 million per well, financed primarily through debt. The company expects an additional 12 horizontal wells to start drilling in December 2026, followed by 10 to 20 wells per year in 2027 and beyond until the program is complete. Gross production across the development is projected to exceed 20,000 barrels of oil per day, with 7,000 bopd attributable to LHO’s working interest.
What It Means for Subcontractors
- Drilling and completion crews working the Delaware Basin’s Artesia-Vacuum Trend should expect a multi-year workload: EON’s schedule calls for 12 wells starting December 2026 and 10 to 20 wells annually in 2027 and each year after until all 92 wells are drilled.
- Fracing, surface facility installation and testing crews have a defined 60-day cycle per well to plan around, on top of the roughly 10-day drilling phase, useful for scheduling crew rotations and equipment mobilization in Eddy County.
- Because EON plans to debt-finance its 35% working interest share (estimated at $1.2 million per well) once the carried wells are complete, subcontractors should watch for procurement activity tied to Virtus Energy Partners, the designated operator, as the program scales past the initial three wells.
- Oilfield service companies supporting waterflood operations in the Seven Rivers formation should note LHO retains 100% working interest there, separate from the San Andres horizontal program, meaning that work stream continues independent of the new drilling schedule.
- First oil sales revenue isn’t expected until October or November 2026, a timeline worth tracking for companies invoicing on production-linked payment terms tied to this specific program.
