Freedom Oil and Gas has signed a contract with US-based Patterson-UTI Drilling Company for the drilling of two wells in the Eagle Ford Shale.
The wells will be drilled on Freedom's newly acquired 8,000 acres located in Dimmit County in south Texas.
Freedom said that its acreage is in one of the most active areas of the Eagle Ford Shale surrounded by over 300 offset wells.
The Patterson rig, which is currently drilling nearly 50 miles from the company's acreage, is expected to mobilize to the first Freedom drilling location in April.
In addition to purchasing 3D seismic data over the planned drilling area, Freedom has obtained cores from five surrounding wells that give a foot by foot understanding of the reservoir.
The company plans to locate the two wells immediately adjacent to offset operator's producing locations.
Freedom chairman and chief executive officer Michael Yeager said: “"We targeted this area of the Eagle Ford Shale based on expectations of low cost and attractive returns at today's oil and gas prices.
“The Eagle Ford formation is the thickest at nearly 400 feet in our acreage and many successful wells have been drilled at three separate intervals adjacent to us.
“The well depths in this area are only about 6,500 feet to the center of the Eagle Ford Shale, which results in wells that can be drilled quickly and at a relatively low cost.”
Freedom expects the initial well cost of about $5m to fall to around $4m per well once a full development program is underway.
Its current 8,000- acre position is expected to increase 10,000 acres after the acquisition of several new leases in the next few weeks.