Freedom Oil launches $18 million Eagle Ford drilling program

By Patrick C. Miller | August 28, 2018

Freedom Oil & Gas Ltd. of Houston has begun drilling its Eagle Ford shale acreage in Dimmit County, Texas, after successfully completing six test wells with better-than-expected initial results.

The company said it’s moving forward with further horizontal well development by implementing a continuous drilling program with a dedicated rig. Freedom has a 100 percent working interest and a 75 percent net revenue interest in its acreage.

Freedom has executed a six-month contract for a fit-for-purpose rig with Orion Drilling Co. and has the option to extend that contract for an additional six months. The first well in the ongoing program began drilling this week on the Wilson pad, the same location where the company drilled its first two wells in 2017.

Freedom plans to drill three horizontal wells on the Wilson pad, targeting the lower Eagle Ford formation, with expected lateral lengths of about 7,500 feet. These wells are the Vega 1, 2 and 3. For safety reasons, the two original Wilson wells will be shut in during drilling operations. The rig will move to another location and continue drilling after the three Vega wells are finalized.

“This new continuous pace of development should allow us to improve our operating efficiency, reduce operating costs and drive growth in production, reserves and cash flow,” said Michael Yeager, Freedom chairman and CEO. “Over the last year, we have obtained a substantial amount of information about the optimum drilling and completion techniques on our acreage, constructed substantial field infrastructure and established valuable relationships with quality service providers. We believe we are now well positioned to apply the knowledge we gained to carry out this continuous program.”

The drilling and development program is being funded with proceeds of a recent $18 million placement of common shares, cash on hand and operating cash flow from producing wells. In addition, Freedom is finalizing the establishment of a reserves-based lending agreement with Wells Fargo, which the company expects to be in place by September.

According to Yeager, the initial 30-day production average from each of the four horizontal wells drilled on the Hovencamp pad averaged 1,128 barrels of oil equivalent per day, while being choked to optimize reservoir pressure. He said the wells are flowing at strong pressures on their own at 500 psi average wellhead pressure. The four wells were drilled with an average lateral length of 7,500 feet and were hydraulically stimulated using Schlumberger’s services with a 30-stage application and a higher volume of water.

“Throughout the process of drilling our initial six wells, we greatly improved on the number of days to drill and complete the wells, thereby reducing costs, and established a high intensity completion design which will be applied going forward,” Yeager said. “Our confidence in our future success is supported by the excellent production performance of our initial six wells.”