Grayburg-Jackson Field
Our first acquisition in November 2023 was the Grayburg-Jackson field (“GJF”) which is an oil and gas property and is operated by the EON subsidiary LH Operating, LLC (“LHO”).
GJF is located on the Northwest Shelf of the Permian Basin in Eddy County, New Mexico. According to the United States Geological Survey, the Northwest Shelf contains the largest recoverable reserves among all the unconventional basins in the United States. The Company’s holdings comprise 13,700 contiguous leasehold acres on 20 federal and 3 state leases (Click the button for land and ownership overview). All field production of the Company is being sold under long-term contracts to various customers in the USA.
The oil field has several large reservoir structures that range from as shallow as 1,500 feet deep to 4,000 feet deep in the Seven Rivers, Queen, Grayburg and San Andres intervals. The Company is transitioning to a two operating model approach on the GJF where there is sufficient vertical separation to allow for concurrent development.
Waterflood operating model: EON will continue to operate the existing waterflood recovery which is primarily in the Seven Rivers interval, but includes the legacy wells that are in place (“Seven Rivers Waterflood”).
Horizontal Drilling Program:
EON has farmed out its interest in the San Andres formation to an experienced team to pursue development in a horizontal drilling program ("Horizontal Drilling Program") retaining a carried interest in the first three wells and retaining a 35% working interest in all horizontal wells to be drilled.
| Period | Epoch | Formation | Approx. Regional Thickness (ft) | |
|---|---|---|---|---|
| Permian | Ochoan | Dewey Lake | 200-400 | |
| Rustler | 100 | |||
| Salado | 1,000 | |||
| Guadalupian | Tansil | 200 | ||
| Yates | 200 | |||
| Seven Rivers | 500 | |||
| Queen | 200-500 | |||
| Grayburg | 300 | |||
| San Andres | 1,500 | |||
| Leonardian | Glorieta | 100 | ||
| Yeso | Paddock | 1,500 | ||
| Blinebry | ||||
| Tubb | ||||
| Drinkard | ||||
| Wolfcampian | Wolfcamp | 0-1,500 | ||
Waterflood Operations
The existing Seven Rivers Waterflood consists of 342 producing wells, 207 injection wells and 1 water source well for a total of 550 wells. The attainable proven reserves are approximately 19 million barrels of crude oil and 4 billion cubic feet of natural gas. Click the button for the latest published reserve report by Haas and Cobb Petroleum Consultants, LLC (“Hass & Cobb”) a 3rd party engineering firm.
LHO was a privately owned company that acquired the property in late 2019 and in early 2020, elevated the efforts for the implementation of Seven Rivers waterflooding. The Company is continuing to stimulate oil production and perform workovers in the Seven Rivers, which will expand the existing waterflood patterns field-wide over the next few years.
Horizontal Operations
Under a farmout agreement with EON, a subsidiary of Virtus Energy Partners, LLC (“Virtus”) will be the horizontal well operator to develop the San Andres formation through a horizontal drilling program. Virtus has had a lot of success, and has best-in-class expertise, in horizontal San Andres development. In the agreement, Virtus owns a 65% working interest in the San Andres formation, and EON has 35%.
Unlike the Seven Rivers formation, the San Andres formation is more heterogenous and more suitable to horizontal drilling; meaning the reservoir is not uniform in its properties throughout the field, making waterflooding ineffective and vertical drilling inefficient. There is sufficient vertical separation between the Seven Rivers waterflood and the horizontal targets to allow for concurrent development.
The initial 3-well pilot of horizontal wells is expected to commence in Q2 of 2026. The San Andres formation in the GJF has a potential of up to 92 total wells in a multi-year development program. For more information click on the button for the San Andres Horizontal program.
