LONDON (Alliance News) - Magnolia Petroleum PLC Wednesday said it expects a range of new wells to come into production during the second quarter after adding 29 new wells to its portfolio during its first quarter.
The US-focused onshore oil and gas production company, which takes small stakes in multiple wells in highly prospective shale plays, said included in the new wells coming into production for the second quarter are several sites with which the company has higher-than-average interests including the Palmley 1-1WH well.
Magnolia said it expects to participate in further new wells and infill drilling with leading operators moving forward and will be releasing an updated reserves report in the second quarter, which will cover 5,500 net acres of its proven formations and include estimates on average production rates and reserves.
The company said that during the first quarter it added 29 new wells to its operations and increased its number of producing wells by 11 to 151.
Magnolia said it received a significant increase in infill well proposals on its leases during the quarter and received its first proposal to drill eight wells on one spacing unit in Oklahoma.
The company said that its borrowing base limit for its Credit Facility was raised to USD2.1 million from USD1.6 million to accelerate drilling activity and prove up reserves on leases as a result of strong trading performance and increase in new well proposals.
Magnolia also reiterated that it expects more than a three-fold increase in full year revenues for its full year 2013 to roughly USD2.4 million, in line with market expectations. It also said its full year earnings before interest, taxation, depreciation and amortisation is expected to be ahead of market expectations.
Market expectations for the company's EBITDA, adjusted for any foreign exchange gains or losses, provided Magnolia Petroleum's broker Northland Capital Partners Ltd, is expected to rise to a positive USD500,000 from a loss of USD400,000 in 2012.
Magnolia shares were down 1.1% to 2.05 pence Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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