Magnolia Petroleum's oil production in US operations grows

Magnolia Petroleum's oil and gas production rate has grown ahead of expectations, the company said in an operational update Tuesday.

Magnolia Petroleum's oil and gas production rate has grown ahead of expectations, the company said in an operational update Tuesday.

The AIM listed US business reported increased activity in onshore formations including the Bakken/Three Forks Sanish in North Dakota and the Mississippi Lime and Woodford/Hunton formations in Oklahoma.

Initial production at the Bowen 2-29 and Bowen 3-29 vertical wells in the Wilcox formation in Oklahoma also exceeded outlooks.

A gross initial production rate of 65 barrels of oil equivalent per day (boepd) was achieved at Bowen 2-29 while the Bowen 3-29 extracted 30 boepd.

The wells are expected to recover drilling costs of $13,612 each in less than 12 months, the company said.

The Bowen wells are two direct offsets to the Henry 2-29 vertical well that is producing from the Wilcox formation in Oklahoma.

Following the success of the Henry well, the Bowen wells were drilled to optimise the recovery of all the reserves.

The gross initial production rate for the Paul Gillham & Co operated SPS 6-26 vertical well in the Hunton formation in Oklahoma surpassed targets at 108 boepd. The SPS well recovered costs in less than five months as a result.

The company is working on a further six wells, with a share of aggregate drill costs totalling $183,000.

"The initial production rates reported for the two vertical Bowen wells, combined with the quick payout achieved by the SPS vertical well provide ready-made examples of the attractive economics behind drilling the proven reservoirs in Oklahoma," Chief Operating Officer Rita Whittington said.

"Magnolia's interests in the Bakken, Three Forks Sanish, Mississippi Lime and Hunton formations continue to provide attractive opportunities, as demonstrated by the participation in six new wells mentioned today."

Shares fell 0.72% to 3.45p at 11:15 Tuesday despite a positive production update.

RD

Recommended

Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021
Royal Mail will deliver for investors – here's how to play it
Trading

Royal Mail will deliver for investors – here's how to play it

Royal Mail Group has found its feet in the past 18 months and looks cheap. Matthew Partridge looks at how to trade the shares.
14 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021