The company has achieved a 30% reduction in corporate overheads and operating costs, as part of management’s focus on adjusting to the lower oil price environment.
Meanwhile, eight new wells started production in the first quarter, bringing the number gushing out the black stuff up to 184 at the end of March, with a further 33 wells at various stages of development.
New wells are due to start producing in the current quarter, while the company is planning to drill at least one well as an operator by the end of the year, with a second well a possibility, depending on product and services costs.
“Both wells have low break-even oil prices and the potential to materially add to our existing production and reserves,” stated Rita Whittington, chief operating officer of Magnolia.
“With the US rig count close to a three year low, we are taking advantage of current market conditions to secure significant savings in drilling and service costs, which will enhance each well's already attractive payback credentials,” she added.
“Thanks to the steps we have taken and the asset backing provided by the US$26.6 million value assigned to our P1 reserves in January 2015, not only will Magnolia ride out the oil price storm, but will also continue to deliver on its objective to prove up the reserves on its US onshore leases and generate value for shareholders," Whittington asserted.