EON Resources has announced that its subsidiary EON Energy, LLC has signed an agreement to acquire a 94% working interest in the South Justis field, located in Lea County in the Central Permian Basin. This acquisition represents a strategic move that could double or even triple oil production in the area over the next year.
South Justis field assets
The deal involves 5,360 leasehold acres with a total of 208 wells, of which 19 are currently active. The region, close to the Grayburg-Jackson field operated by another EON subsidiary, offers logistical and operational synergies. The South Justis field is in one of the areas with the longest producing history in the United States.
[post_relacionado]The transaction is on a no cash, no debt basis: EON will deliver one million shares of Class A common stock to the sellers WPP NM, LLC and Northwest Central, LLC. The field has 210 million barrels of original oil in place (OOIP), of which an estimated 15 million barrels may be recoverable through well recompletion and selective drilling.
The acquisition aligns with EON’s strategy of focusing on under-exploited assets with high reactivation potential. In recent months, the sellers reactivated 6 wells with an incremental 50 barrels per day using specialized equipment. EON plans to replicate this model to reactivate at least 30 additional wells during the year.
EON will apply to South Justis the same well stimulation techniques already proven at Grayburg-Jackson. The initial operation will continue under the supervision of the current operator, while field personnel will transition to EON. In addition, an external study is expected to be contracted to optimize reservoir development.
The field currently produces 108 barrels of oil per day, generating approximately US$1.2 million per year in net cash flow. The company estimates that, with the planned reactivation, it could raise production to a range between 250 and 400 barrels per day, keeping overhead costs low.
With this acquisition, EON Resources consolidates its presence in the Permian Basin. Permian Basinwith a growth strategy based on the recovery of assets with a productive history and high volume of crude oil in place.
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Source and photo: EON Resources