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UPDATE - Magnolia Petroleum adds more production



Magnolia Petroleum (LON:MAGP) revealed that four more wells have been brought into production in North Dakota and Oklahoma.

It has interests of between 0.799% to 4.67% in the four wells, which together add almost 14 barrels of oil per day and 5,530 cubic feet of gas to the group’s production profile.

Additionally the company has decided to participate in two more wells, with net revenue interests of 7.5% and 5% respectively, for a total cost of US$349,369

Magnolia now has interests in 129 producing wells and 51 wells that are in development.

“We are well placed to significantly grow this total in the near term,” said chief operating officer Rita Whittington.

“Furthermore, as the Voise and Nevada wells demonstrate, we are not only continuing to replenish our pipeline of new drilling activity alongside leading operators such as Devon Energy, but with interests of 7.5% and 5.0% respectively, we are also increasing the average size of our net revenue interests.

“As a result, the strong growth seen to date in Magnolia's daily production and the value of our proven (P1) reserves, which as at 1 August 2013 stood at 214 boepd and US$40.721m respectively, is set to continue, as we focus on our goal to build shareholder value."

City broker Northland Capital said the update indicates there are significant wells to come in Magnolia’s ongoing drill programme.

“The company is awaiting a number of above average spuds in its inventory of 51 well elections at various stages of development,” analyst Andrew McGeary said in a note.

“Fulfilment of these should bring about a significant increase in production and booked reserves. Magnolia remains well positioned to execute its strategy following the recent addition of reserves-based lending.”

Quick facts: Magnolia Petroleum PLC

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Market: AIM
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