EON Resources Partners With Virtus on $300M Permian Drilling Program
EON Resources Inc. (NYSE American:EONR) has entered into a farmout agreement with Virtus Energy Partners, granting Virtus the right to develop its San Andres formation in the Grayburg Jackson Field (GJF) of the Permian Basin, a move expected to unlock more than $300 million in cumulative investment.
Under the agreement, Virtus paid EON $5 million to acquire a 65% working interest in the San Andres leasehold, while EON retains 35% as a non-operator along with full ownership of other productive formations. Virtus will operate the project, targeting as many as 90 horizontal drilling locations.
The drilling program is projected to deliver between 10 and 20 new wells per year, with initial output of 300–500 barrels of oil per day (BOPD) per well. Over the program’s life, gross production could exceed 20,000 BOPD, of which 7,000 BOPD would be net to EON’s retained interest. Virtus will fully fund the first three wells, expected online by mid-2026.
Virtus brings an established track record as one of the leading horizontal San Andres developers in the Permian, having previously scaled output to more than 30,000 boe/d across Texas and New Mexico. The company’s expertise in applying modern drilling techniques to mature reservoirs is seen as key to maximizing the field’s potential.
EON’s management highlighted the deal as both a strategic de-risking and a growth opportunity. CEO Dante Caravaggio noted that early production from the first wells could finance a significant portion of subsequent drilling, potentially making the development program self-sustaining once 10 wells are in production.
The agreement also coincided with the settlement of seller obligations and retirement of senior debt, strengthening EON’s balance sheet as it pivots toward growth. Virtus estimates that the project could yield reserves net to EON exceeding 10 million barrels of oil and 6 Bcf of gas, with a net present value (NPV-10) of more than $95 million.
The Grayburg Jackson Field, spanning 13,700 acres in Eddy County, New Mexico, currently produces from the Seven Rivers formation and holds estimated proven reserves of 14 million barrels of oil and 2.8 Bcf of gas. Horizontal development of the San Andres could add another 40 million barrels of recoverable reserves.