LONDON (Alliance News) - US oil company Magnolia Petroleum PLC Wednesday said it continued to increase the number of producing wells on its acreage in the final quarter of 2015 and said further wells are currently being developed.
Magnolia, which has interests in producing assets lying over the Bakken/Three Forks Sanish, Woodford and Mississippi Lime onshore formations in the US, said its eight new wells began producing during the last quarter of 2015, pushing the total amount of producing wells up to 210.
"Magnolia now has interests in 210 producing wells in proven US onshore formations such as the Bakken in North Dakota and the Woodford and Mississippi Lime in Oklahoma," said Rita Whittington, chief operating officer of the company.
"In the face of persistently low oil prices, we continue to maintain strict control of our cost base to ensure as much of our internally generated revenues as possible are reinvested into new wells, specifically those where the economics of drilling remain attractive in the current market environment," she added.
Magnolia said a further nine wells are currently at various stages of development, and the company shows no signs of slowing down the amount of new wells being drilled.
Those nine wells currently being developed are part of the 10-well drilling programme which started in the last quarter of 2015 with partner Continental Resources, targeting gas in the South-Central Oklahoma oil province.
Magnolia said 3.2 billion barrels of conventional oil has already been extracted from the South-Central Oklahoma oil province from 60 reservoirs, making the area "prolific" and a good place to search for gas.
All ten of those wells are lower risk, "increased density wells" aimed at maximising the recovery of the reserves, Magnolia said, and the programme is part of Magnolia's plan to level its product mix, which stood at 70% oil and 30% gas in January.
Magnolia is aiming to produce more gas and less oil due to the fall in oil prices, as gas markets have local supply and demand dynamics, which tend to be independent of global oil prices.
The nine wells being drilled by Continental are expected to begin producing before the end of the first quarter of 2016.
Magnolia has agreed to participate in more new wells in the future, electing to participate in an additional 12 wells during the fourth quarter of 2015. That pushed the total number of wells waiting to be drilled to 23.
Magnolia said it will continue to participate in new wells and infill drilling on its acreage if its is commercial at lower oil prices.
Magnolia shares were up 1.1% to 0.187 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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