The Freedom Oil and Gas Ltd (ASX: FDM) share price plunged 23% today, making it the worst performer on the All Ordinaries index. This came after the company announced that high-pressure frac water inhibited the drilling of one of its wells, Noroma 1. The affected wellbore was determined to be largely unsalvageable.
The news sparked a huge sell-off, causing the Freedom share price to drop to $0.115, only half a cent above its hit a 52-week low.
Freedom commenced its Eagle Ford shale drilling program in August 2018 and has since successfully drilled fourteen Eagle Ford wells. Today's announcement of the incident with Noroma 1, the fifteenth well, has sufficiently panicked investors.
In response to the issue, Freedom has made the decision to begin production from the newly-drilled wells in the area while waiting sixty days to resume drilling operations.
The pause in drilling and production from nearby wells will aid in reducing reservoir pressure, decreasing the risk of another similar incident occurring. Additionally, the break in drilling will give Freedom time to decide its best path forward. Freedom will lease its drilling rig for the sixty-day hiatus.
It's not the first time Freedom has encountered a problem like this. In July 2018, two wells were temporarily shut-in due to the impact of fracturing fluid from nearby wells.
The past twelve months have been a rough ride for the oil and gas company, with shares down 60% from a year ago.
