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Magnolia Petroleum to invest in 12 new US wells

The new wells demonstrate the significant pickup in activity the company is seeing in the US
Oil workers on a well
All twelve wells are awaiting spud

Magnolia Petroleum PLC (LON:MAGP) has told investors it will take stakes in twelve new wells in the United States.

It will invest a total of US$270,300 in the well programme which will take place in the Woodford play and the Mississippi Woodford, both in Oklahoma, as well as the Bakken in North Dakota. The company will hold between 0.12 and 1.4% in the new drilling ventures.

All twelve new wells are awaiting spud, the company said.

Magnolia chief executive Rita Whittington said: “These 12 new wells demonstrate the significant pickup in activity we are seeing across the proven US onshore formations where we are focused. 

“A number of these are located in the prolific SCOOP and STACK plays in Oklahoma where wells drilled are not only low cost, but the production and recovery rates being achieved are among the best in the region.”

She added: “half of these new wells are increased density wells on leases where production has already been established. 

“They therefore offer a low risk route to increasing production and upgrading reserves to the proven developed producing (PDP) category. 

“As a result, we anticipate further growth in our PDP reserves which were recently assigned a value of US$4 million, almost double our current market capitalisation.”

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