Magnolia Petroleum surges on US well potential

Magnolia Petroleum's shares surged Monday after the oil and gas company said initial production rates from its US onshore wells exceeded expectations.

Magnolia Petroleum's shares surged Monday after the oil and gas company said initial production rates from its US onshore wells exceeded expectations.

The company reported robust results from four of its wells at formations including Bakken in North Dakota, Woodford in Oklahoma and Cotton Valley in Texas.

Chief Operating Officer, Rita Whittington, said the wells had beat forecasts and highlighted the positive impact horizontal drilling and fracture stimulation can have on recovery rates in proven onshore US.

"The prolific Bakken play has been at the forefront of this revolution, and is largely responsible for a more than seven fold increase in daily oil production in North Dakota to over 700,000 boepd [barrels of oil per day] in just six years," she said.

"With 14 wells at various stages of drilling or stimulation and another 15 waiting to spud, we expect further growth in our net production in due course, as we continue with our strategy of drilling wells on our leases to prove up our reserves and, in the process, create value for shareholders."

RD

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