Houston-based small-cap Freedom Oil & Gas Ltd., focused on the Eagle Ford Shale in South Texas, has begun developing acreage in Dimmit County after successfully testing six wells with better-than-expected results.
The first well of the ongoing program is being drilled on the Wilson pad, where Freedom drilled its first two wells in 2017. Three horizontal wells, Vega 1, 2 and 3, are targeting the lower Eagle Ford formation, with expected lateral lengths of about 7,500 feet.
“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,” CEO J. Michael Yeager said. “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.”
Yeager in 2013 took over as CEO and executive chairman of Maverick Drilling & Exploration, which changed its name to Freedom Oil & Gas in late 2016. Yeager was CEO of BHP Billiton Petroleum from 2006 until 2013, when he retired.
During his tenure at BHP, Yeager oversaw the Australian-based conglomerate’s Lower 48 portfolio, which included extensive Eagle Ford and Permian Basin acreage. (BHP in July agreed to sell the U.S. onshore acreage to BP plc for $10.5 billion.) Yeager also has held executive roles at ExxonMobil Corp., including as vice president of ExxonMobil Development Co. and as CEO of Canadian affiliate Imperial Oil Resources.
Yeager expressed optimism about Freedom’s initial results in the Eagle Ford patch.
“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…”
Initial 30-day production averages from each of four recently completed horizontal wells drilled on Freedom’s Hovencamp pad averaged 1,128 boe/d, choked back to optimize reservoir pressure. The four Hovencamp wells were drilled with an average lateral length of 7,500 feet with 30 fracture stages.
The company last year initiated a horizontal drilling program across its 9,400 net acreage position in the Eagle Ford, and the first two wells ramped up in November. Year-end proved reserves increased 109% over 2016 to 13.4 million boe. Liquids output at the end of 2017 represented 78% of proved reserves, 55% weighted to crude oil.
The company has identified at least 325 drilling locations in its South Texas position, assuming three vertical intervals are developed. To move forward with its latest development the independent executed a six-month rig contract with Orion Drilling Co. for a fit-for-purpose rig, with a six-month optional extension.
Funding for the drilling and development program is coming via $18 million in proceeds from placing some common shares, as well as cash on hand. The company also expects to finalize in September a reserves-based lending agreement with Wells Fargo Securities LLC.