LONDON (Alliance News) - Magnolia Petroleum PLC Tuesday said now operators have begun drilling on four of its sites as it secures a USD5 million three year credit facility.
The AIM-listed company that buys up leases on oil- and gas-rich lands in the US and then small stakes in the operators that drill them, said it is participating in four new sites on its Oklahoma land at a net aggregate cost of USD952,702, with the operators Devon Energy and Orca Operating maintaining the sites.
The company also announced that the initial production rate at its Murl#1 well in Oklahoma has increased to 87 barrels of oil equivalent per day from 60 barrels of oil per day reported on September 30.
Magnolia said the JoAnn1H-18 well in Oklahoma is holding a gross initial production rate of 1,170 barrels of oil equivalent per day.
The company also said it has secured a USD5 million three year credit facility in which an initial borrowing base limit of USD1.6 million has been set which will be reassessed on a six monthly basis and adjusted in line with the company's proven developed producing reserves.
Magnolia, which listed on AIM in November 2011, currently has small percentage interests in 121 producing wells and is taking advantage of the hydraulic fracturing boom in order to profit from companies focused on drilling for proven reserves. Working in sparsely populated areas means it faces less resistance to fracking on its lands.
The company's Chief Executive Stephen Snead told Alliance News in September that he is targeting a near-fivefold increase in the amount of oil the company's existing assets produce over the next four years, driving up revenues and profits as the company seeks to take advantage of the fracking boom sweeping the US.
Magnolia Petroleum shares were up 5.6% to 2.64 pence Tuesday.
An exclusive interview with Stephen Snead can be found at the URL below:
http://allapp.alliancenews.com/article?u=c26fbd13353a44cdbc0680f496df6f3b&a=1379083337962253000
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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