Magnolia Petroleum expands presence in Montana

AIM-listed oil and gas group Magnolia Petroleum is to buy 985 net mineral acres in the Bakken/Three Forks Sanish Formation, Montana, for over half a million dollars.

The US-focused producer said on Friday morning that this transaction will raise its total acreage acquired in the district to 7,866 net mineral acres.

The total cost of the purchase is $546,000 and will be funded by the firm's existing cash balances.

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"Following on from our expansion in November 2012 into Daniels County, Montana, we are pleased to further extend our interest in the area with the acquisition of a further 985 net mineral acres," said Magnolia's Chief Operating Officer Rita Whittington.

"We believe the area has the potential to become a significant extension for production from the Bakken/Three Forks Sanish formations and a number of companies have drilling programmes in the area planned for 2013."

Magnolia has interest in over 60 producer properties and significant acreage in two major project areas, Bakken and Woodford and Hunton formations in Oklahoma. As of the close of trade on Thursday, the company has a market capitalisation of £32.96m.