On 18 January 2019, Freedom Oil & Gas Limited (ASX: FDM) has published an update on its Eagle Ford operations, and it also includes a change to its near-term drilling plans.
Freedom Oil & Gas Limited is an American based Oil and gas company. Currently, the company manages over 9,000 acres, and this land is undeveloped leasehold land. The company is listed on both ASX and OTCQX. The company is listed on OTCQX under the ticker name of “FDMQF”. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
The company reported that in August 2018 they had started the continuous drilling program and since then the company has successfully drilled fourteen lower Eagle Ford wells and now company is focusing on fifteenth well. The drilling of the fifteenth Noroma 1 well was impacted by high-pressure frac water which has entered the wellbore and due to that the company had to delay its ability to drill the well to the planned total depth. The company also conducted the recovery attempts for several days, but still, the company did not get any positive return. Due to that, the company had decided that they will temporarily abandon the wellbore.
The high-pressure fluids in the Noroma 1 well were the result of offset hydraulic fracturing of their recently drilled Persimmon wells. The company has decided that they will not resume the drilling operations and willing to wait till the reservoir pressure is settled. For the time being this strategy is more suitable for the company and it will also decrease the likelihood of similar drilling issues going forward.
An offset operator has approached the company who desired to use FDM’s drilling rig for approx. 60 days and the company has agreed to the offer. This decision was made due to the current movement in the oil prices and the company is also waiting for the reservoir pressure to go down. Due to this pause, the company will get additional time for evaluating oil prices, the performance of well, and production timing before resuming drilling.
Whenever reservoir pressure goes down the company will resume the drilling and company is also anticipating that they will add four wells for drilling which will result in a total of 13 new wells and all the drilling will be done during the six months.
The company is also evaluating the potential for additional upper Eagle Ford and Austin Chalk locations on their Dimmit County leasehold. The company is willing to extend the drilling rig contract beyond the first six-month term if required, and that decision will be made in March or early April 2019.
Stock performance: The shares of Freedom Oil and Gas Limited closed the day’s session at A$0.115 (18 January 2019), down by 23.333%. The market capitalization of the company stands at circa $161.55 Million with 1.08 billion outstanding shares. In the time span of the previous six months, the stock delivered the return of -45.45%. During the last one month, FDM delivered the positive return of 7.14%.
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