LONDON (Alliance News) - AIM-listed Magnolia Petroleum PLC Tuesday said it has secured a new USD6.0 million credit facility to replace its existing USD5.0 million facility, which will help fund future drilling activity alongside established operators, as well as the acquisition of additional leases in proven US onshore formations.
In a statement, the US onshore-focused oil and gas explorer and producer said the two-year revolving line of credit was agreed on improved terms to its previous arrangement.
No warrants or equity will be issued as part of the facility, Magnolia Petroleum said.
"This new and improved credit facility demonstrates how US banks not only recognize the reserve values placed on our producing wells, but also the relatively low risk attached to upgrading behind pipe and proven undeveloped reserves to developed producing reserves via drilling, as we have successfully done over the past six months," Chief Operating Officer Rita Whittington said in a statement.
"With two thirds of our proven reserves of USD31.8 million categorised as behind pipes and proven undeveloped reserves, the potential to add to our USD9.0 million of proven developed producing reserves is clear. In addition, we have 74 new wells at various stages of development and we continue to receive multiple proposals to participate in drilling alongside leading operators such as Devon Energy," the COO added.
Magnolia Petroleum shares were Tuesday up 2.0% at 1.55 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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