LONDON (Alliance News) - Magnolia Petroleum PLC Friday reported a pretax profit in 2014 as it recovered from a loss in 2013 and revenue rose by more than half, and said it has a strong platform for growth in the years ahead.
The oil and gas company said it made a pretax profit of USD1.7 million in 2014, having reported a pretax loss of USD281,817 in 2013, as revenue rose to USD3.9 million from USD2.4 million.
It said the number of wells in which it has an interest is up 25% year-on-year, while its proven oil reserves grew 37% to 985,000 barrels of oil and proven gas reserves rose 39% to 2.91 million cubic feet of gas. Daily production stood at 150 barrels of oil equivalent per day as at April 1, 2014, 257 boepd as at July 1, and 281 boepd by the end of the year.
Magnolia added that while its overall drilling activity is expected to be lower during 2015, it will not break the sequence of consecutive years of reserves growth. So far in 2015, Magnolia has elected to participate in the drilling of nine wells in Oklahoma.
"In the three years since AIM admission, we have successfully built a low cost, highly revenue generative US onshore focused oil and gas company. We believe there is a lot more to come. Thanks to having a diverse portfolio of leases with multiple drilling opportunities that are profitable below current oil prices, we have a strong platform for growth in the years ahead," Chief Executive Steven Snead said in a statement.
Separately, Magnolia said it has raised GBP1 million via the issue of 142.9 million shares at a price of 0.7 pence each. Shares in Magnolia were down 3% to 0.8 pence on Friday morning.
It said the net proceeds from its raising will be used to further expedite its existing growth and investment strategy, including the drilling of operated vertical wells targeting the Mississippi Lime, Skinner and Red Fork formations in Oklahoma.
"We intend to deploy the funds that we have successfully raised today targeting significant returns for the company. Specifically, we are delighted to be picking up the drill bit again for our own operated wells. In the second half of this year, we plan to drill two low cost vertical wells in which we have a 94% interest. Together with the low risk nature of the conventional formations we are targeting, the new wells have the potential to significantly add to our existing production and our net proven reserves," Chief Operating Officer Rita Whittington said in a statement.
Magnolia added that it has appointed Sanlam Securities UK Ltd and Cornhill Capital Ltd as joint brokers to the company.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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