LONDON (Alliance News) - Magnolia Petroleum PLC saw its shares jump 24% Friday, after it said net daily production increased in the three months to July 1, as a number of its wells commenced production.
The AIM-quoted US onshore focused oil and gas exploration and production company said net production stood at 257 barrels of oil equivalent per day as at July 1, compared to 150 barrels of oil equivalent per day on April 1, as wells in which it holds a larger-than-average interest have come into production.
Magnolia said that thanks to the combination of growing revenues from production and its USD5 million credit facility, it is well placed to deliver on its objective to prove up the reserves on its leases.
Total net proved and probable reserves currently stand at 749 million barrels of oil and condensate, and 2,554 million cubic feet of gas.
"At USD31.83 million, the value of our proven reserves provides Magnolia with considerable asset backing, particularly when compared to our market valuation. From current levels, our reserves are set to grow strongly. Not only do we have interests in 79 wells at various stages of development but we continue to receive multiple drilling proposals," said Chief Operating Officer Rita Whittington in a statement.
The company said a growing proportion of the drilling proposals are targeting the Woodford formation in Oklahoma, which it said is increasingly viewed as the more "productive formation".
Magnolia Petroleum shares were trading at 1.30 pence Friday morning, up 24%.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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